##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    February 4, 2007.o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number
    001-13927
  CSK AUTO CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

86-0765798(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)645 E. Missouri
    Ave.
    Suite 400
    Phoenix, Arizona(Address of principal
    executive offices)

85012(Zip Code)   Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which Registered:Common Stock, $.01 par value

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  o þ
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ




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##### 



TABLE OF
    CONTENTS
  
  PagePART IItem 1.

Business


7Item 1A.

Risk
    Factors


17Item 1B.

Unresolved Staff
    Comments


24Item 2.

Properties


25Item 3.

Legal
    Proceedings


26Item 4.

Submission of
    Matters to a Vote of Security Holders


28PART IIItem 5.

Market for
    Registrants Common Equity and Related Stockholder
    Matters


28Item 6.

Selected Financial
    Data


30Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


32Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk


54Item 8.

Financial
    Statements and Supplementary Data


56Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


106Item 9A.

Controls and
    Procedures


106Item 9B.

Other
    Information


115PART IIIItem 10.

Directors,
    Executive Officers and Corporate Governance


115Item 11.

Executive
    Compensation


117Item 12.

Security Ownership
    of Certain Beneficial Owners and Management


142Item 13.

Certain
    Relationships and Related Transactions, and Director
    Independence


145Item 14.

Principal
    Accountant Fees and Services


146PART IVItem 15.

Exhibits and
    Financial Statement Schedules


147EX-21.1EX-31.1EX-31.2EX-32.1      Form 10-K Form 10-Q Form 8-K www.cskauto.com
  Explanatory
    Note
  Form 10-K 10-K), Form 10-Q, Form 10-Q.
 2




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10-K. 10-K Form 10-K Form 10-Q 10-K
  Form 10-Q
  Note
    Concerning Forward-Looking Information
    and/or Sarbanes-Oxley
   3




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##### Table of Contents



PART I  Significant
    Events
  10-K
  Audit
    Committee Investigation and Restatement of Consolidated
    Financial Statements
  Overview
  10-K,
    
    recording of improper accounting entries as directed by certain
    personnel;
    inappropriate override of, or interference with, existing
    policies, procedures and internal controls;
    withholding of information from, and providing of improper
    explanations and supporting documentation to, the Companys
    Audit Committee and Board of Directors, as well as its internal
    auditors and independent registered public accountants; and
    discouraging employees from raising accounting related concerns
    and suppressing accounting related inquiries that were made.      Background
  Form 10-K 10-K), 10-K.
 4




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Form 10-Qs
    follow-up follow-up 10-K.
     5




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co-chaired
  10-K
  Management
    Changes
        Securities
    Class Action Litigation, Shareholder Derivative Litigation
    and SEC Investigation
   6




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##### Table of Contents



Debt
    Refinancing
  3 8 3 8 3 8 5 8 5 8 3 8 5 8
  3 8 3 8 5 8 5 8 3 4 2005 10-K
      Item 1.
    Business  General
   7




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
    Checker Auto Parts, founded in 1969, with 467 stores in the
    Southwestern, Rocky Mountain and Northern Plains states and
    Hawaii;
    Schucks Auto Supply, founded in 1917, with 228 stores in
    the Pacific Northwest states and Alaska;
    Kragen Auto Parts, founded in 1947, with 506 stores primarily in
    California; and
    Murrays Discount Auto Stores, founded in 1972, with 126
    stores in the Midwest.      same-day same-day next-day
   8




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e-commerce e-commerce
  Industry
    Overview
    
    the number and age of automotive vehicles in use;
    the number of miles driven annually per vehicle;
    the number of licensed drivers;
    the percentage of the total light vehicle fleet represented by
    light trucks (including SUVs), which generate higher average
    aftermarket product purchases versus such purchases generated
    per car; and
    the existence of $52 billion per year of unperformed and
    underperformed maintenance by U.S. vehicle owners,
    according to the Automotive Aftermarket Suppliers Association.    Competitive
    Strengths and Strategies
    Leading Market Position in the Western United States.
   9




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Focus on Customer Service.
  
    Greet the customer
    Respond to the customers needs
    Expedite the customers transaction
    Ask the customer if we can be of further assistance
    Thank the customer    Efficient Store-Level Information and Distribution
    Systems.
    Drive Customer Traffic and Increase Sales
    Base.
 10




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##### Table of Contents



Store
    Operations
      MurraysChecker


Schucks


Kragen


Discount


CompanyAuto Parts


Auto Supply


Auto Parts


Auto Parts


TotalCalifornia


1



2



487







490Washington






147











147Arizona


121















121Colorado


82















82Minnesota


57















57Michigan














54



55Utah


53















53Oregon






45











45Illinois














55



54Nevada


25







19







44Idaho


9



24











33New Mexico


31















31Wisconsin


27















27Texas


17















17Ohio














14



14Alaska






10











10Hawaii


11















11Montana


10















10Wyoming


11















11North Dakota


7















7South Dakota


5















5Indiana














3



3Sub-total


467



228



506



126



1,327Pay N Save (Arizona)


















5Total


467



228



506



126



1,332    11




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Store
    Formats
      Number ofStore Size

Stores10,000 sq. ft. or greater


1908,000 
    9,999 sq. ft.


2446,000 
    7,999 sq. ft.


6195,000 
    5,999 sq. ft.


202Less than
    5,000 sq. ft.


771,332       Growth
    and Expansion Strategy
    
    opening new stores;
    relocating under-performing stores with expiring leases to
    better locations;
    expanding selected stores; and
    acquiring existing stores in new markets.   12




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Fiscal Year2006


2005


2004Beginning stores


1,277



1,134



1,114New stores (excluding relocated
    stores)


64



36



28Acquired stores






110



Relocated stores


8



8



9Closed stores (including relocated
    stores)


(17
)


(11
)


(17
)Ending stores


1,332



1,277



1,134Total new, acquired and relocated
    stores


72



154



37     Store
    Merchandising
    Purchasing
    E-3 E-3
  Commercial
    Sales Program
   13




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Advertising
  In-store ®
  
    http://www.cskauto.com;
    http://www.cskautoparts.com;
    http://www.checkerauto.com;
    http://www.schucks.com;
    http://www.kragen.com;
    and
    http://www.murraysdiscount.com.  Associates
      Competition
   14




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Trade
    Names, Service Marks and Trademarks
    Warehouse
    and Distribution
    Seasonality
    Environmental
    Matters
   15




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Name

Age

PositionMaynard Jenkins


64


Chairman, Chief Executive Officer
    and DirectorDale Ward


57


Executive Vice PresidentLarry Buresh


63


Senior Vice President and Chief
    Information OfficerLarry Ellis


52


Senior Vice President 
    LogisticsRandi V. Morrison


42


Senior Vice President, General
    Counsel and SecretaryJames B. Riley


55


Senior Vice President and Chief
    Financial OfficerJohn Saar


56


Senior Vice President of
    Commercial Sales   Dale Ward
 16




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Larry Buresh
  Larry Ellis
  Randi V. Morrison
  James B. Riley
  John Saar
     Item 1A.
    Risk
    Factors    Risks
    Related to Our Internal Controls
  We
    have identified material weaknesses in our internal control over
    financial reporting, which could continue to impact our ability
    to report our results of operations and financial condition
    accurately and in a timely manner.
   17




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We
    have extensive work remaining to remedy the material weaknesses
    in our internal control over financial reporting.
    The
    continuing existence of material weaknesses in our internal
    control over financial reporting and the frequency of our
    restatements of our financial statements may make it more
    difficult and expensive to refinance our capital
    structure.
    Risks
    Related to Our Restatement of Financial Statements and Audit
    Committee-led Investigation
  Pending
    and future governmental inquiries may adversely affect us, the
    trading prices of our securities and our ability to access the
    capital markets.
   18




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We
    have been named as a defendant in a class action and other
    lawsuits that may adversely affect our financial condition,
    results of operations and cash flows.
    Continuing
    negative publicity may adversely affect our
    business.
    Potential
    indemnification obligations and limitations of our director and
    officer liability insurance could adversely affect
    us.
    Risks
    Related to our Industry and Business
  Our
    industry is highly competitive and we may not have the resources
    to compete effectively.
      
    national and regional retail automotive parts chains;
    wholesalers or jobber stores (some of which are associated with
    national parts distributors or associations);
    automobile dealers; and
    mass merchandisers and discounters that carry automotive
    replacement parts, maintenance items and accessories. 19




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We may
    not be able to grow our number of stores in a profitable manner
    or achieve the synergies anticipated when acquisitions are
    made.
      
    locate and obtain acceptable store sites;
    negotiate favorable lease terms;
    complete the construction of new and relocated stores in a
    timely manner;
    hire, train and retain competent managers and associates;
    integrate new and acquired stores into our systems and
    operations; and
    achieve the anticipated synergies and operating results that are
    often built into the purchase price when existing stores or
    chains are acquired.      A
    decrease in vehicle miles driven, higher gasoline prices and
    mild summer or winter temperatures may negatively affect our
    revenues.
    
    weather conditions;
    increases in gasoline prices;
    changes in the economy; and
    changes in travel patterns.    A
    decrease in the demand for products we offer for sale could
    adversely affect our financial condition and results of
    operations.
    
    Improving or declining economic conditions  During
    periods of good economic conditions, more of our DIY customers
    may pay others to repair and maintain their cars instead of
    working on their own cars or consumers may opt to purchase new
    vehicles rather than service the vehicles they currently own.
    During 20




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periods of declining economic conditions, both DIY and DIFM
    customers may defer vehicle maintenance or repair.  
    Declining vehicle ages and numbers and improving parts
    quality  A decline in the average age of vehicles, in
    the number of cars on the road or the continued increase in the
    quality of auto parts could result in a reduction in the demand
    for our product offerings.    A
    decrease in the ability and willingness of our suppliers to
    supply products to us on favorable terms may have a negative
    impact on our business.
      Our
    operations are concentrated in the Western United States, and
    therefore our business is subject to fluctuations when adverse
    conditions occur in that region.
    War or
    acts of terrorism or the threat of either may have a negative
    impact on our financial condition, results of operations and
    cash flows.
   21




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Because
    we are involved in litigation from time to time, and are subject
    to numerous governmental laws and regulations, we could incur
    substantial judgments, fines, legal fees and other
    costs.
      We are
    subject to environmental laws and the cost of compliance with
    these laws could negatively impact our financial condition,
    results of operations and cash flows.
    Risks
    Related to Our Financial Condition
  3 4 5 8 3 4
  Our
    failure to file our SEC reports by the deadlines contained in
    our Debt Agreements could have a material adverse effect on our
    financial condition and our ability to meet our debt
    obligations.
  3 4 3 4 3 4 3 4
 22




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3 4
  Our
    substantial debt and increased interest payment obligations
    could adversely affect our financial health, undermine our
    ability to grow and operate profitably and prevent us from
    fulfilling our obligations under the Debt
    Agreements.
    
    it may be more difficult meeting our payment and other
    obligations;
    our ability to obtain additional financing for working capital,
    capital expenditures, acquisitions or general corporate purposes
    may be impaired in the future;
    a substantial portion of our cash flow from operations must be
    dedicated to the payment of principal and interest on our
    indebtedness, thereby reducing the funds available for other
    purposes;
    the majority of our indebtedness, including our Senior Credit
    Facility and Term Loan Facility, carries variable rates of
    interest, and our interest expense could increase if interest
    rates in general increase;
    we are substantially more leveraged than some of our
    competitors, which might place us at a competitive disadvantage
    to those competitors who have lower debt service obligations and
    significantly greater operating and financial flexibility than
    we do;
    we may not be able to adjust rapidly to changing market
    conditions;
    we may be more vulnerable in the event of a downturn in general
    economic conditions or in our business; and
    our failure to comply with the financial and other restrictive
    covenants governing our other Debt Agreements, which, among
    other things, require us to maintain certain financial ratios
    and limit our ability to incur additional debt and sell assets,
    could result in an event of default that, if not cured or
    waived, could have a material adverse effect on our business or
    our prospects. See Item 7, Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations, under the heading Factors Affecting
    Liquidity and Capital Resources  Debt Covenants.    Our
    Debt Agreements restrict or prohibit our ability to engage in or
    enter into some operating and financing arrangements, which may
    limit our ability to operate our business.
    
    incurring or guaranteeing additional indebtedness;
    making investments; 23




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
    creating liens on our assets;
    transferring or selling assets currently held by us;
    paying dividends;
    engaging in mergers, consolidations, or acquisitions; or
    engaging in other business activities.    3 4 3 4
  The
    market price for our common stock may be volatile.
    
    actual or anticipated fluctuations in our operating results;
    actual or anticipated changes in our growth rates or our
    competitors growth rates;
    changes in stock market analyst recommendations regarding our
    common stock, the common stock of companies that investors deems
    comparable to us or our industry generally;
    uncertainties created by our inability to timely file our
    periodic reports with the SEC;
    operating and stock price performance of other companies that
    investors deem comparable to us;
    changes in governmental regulations;
    geopolitical conditions, such as acts or threats of terrorism or
    military conflicts; and
    concentration of the ownership of our common stock and possible
    speculation as to our future as a stand-alone organization.     Item 1B.
    Unresolved
    Staff Comments   24




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Item 2.
    Properties    Number ofSquare


StoresFacility

Location

Area Served

Footage


ServedDistribution Centers:Distribution center(1)

Dixon, CA

California, Nevada, Washington,
    Oregon, Idaho, Alaska, Hawaii


325,500



545Distribution center(2)

Phoenix, AZ

Arizona, California, Colorado,
    Idaho, Montana, Nevada, New Mexico, Oregon, South Dakota, Texas,
    Utah, Wyoming


353,504



565Office, warehouse and distribution
    center

Mendota Heights, MN

Michigan, Minnesota, North Dakota,
    South Dakota, Wisconsin


124,783



94Office, warehouse and distribution
    center(3)

Belleville, MI

Illinois, Indiana, Michigan, Ohio


352,009



130Warehouse(4)

Phoenix, AZ

Arizona


69,388



2Corporate Facilities:Corporate office

Phoenix, AZ

All


127,810



Corporate warehouse and mail center

Phoenix, AZ

Arizona, Colorado, Washington


52,087



Regional Distribution
    Centers:Regional distribution center(5)

Auburn, WA

Washington, Oregon, Idaho, Alaska


160,087



200Regional distribution center

Aurora, CO

Colorado, Wyoming, South Dakota


34,800



85Regional distribution center

Clearfield, UT

Colorado, Utah, Idaho, Wyoming,
    Montana, Oregon


60,000



97Regional distribution center

Commerce, CA

California


75,000



206Return Centers:Returns center

Phoenix, AZ

Arizona, California, Colorado,
    Idaho, Montana, Nevada, New Mexico, Oregon, South Dakota, Texas,
    Utah, Wyoming


69,796



565Returns center

West Sacramento, CA

California, Nevada, Washington,
    Oregon, Idaho, Alaska, Hawaii


65,400



545     (1)
    
    Subject to time period and other restrictions, we have the
    ability to expand the Dixon distribution center by
    161,000 square feet should the need arise.(2)
    
    We recently completed an approximately 80,000 square foot
    expansion of our Phoenix, Arizona distribution center (included
    in the square footage noted above).(3)
    
    The distribution center in Belleville is approximately
    285,000 square feet and currently services 126 stores. This
    distribution facility has the capacity to service approximately
    400 stores. 25




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(4)
    
    The lease on this warehouse was terminated in November 2006.(5)
    
    The lease on this regional distribution center expires in
    December 2007. This facility will relocate in January 2008 to a
    new 81,761 square foot facility also located in Auburn, WA.    Number ofYears

Stores2007  2008


452009  2010


652011  2012


442013  2020


4312021  2030


6092031  thereafter


1371,331     Item 3.
    Legal
    Proceedings  Securities
    Class Action Litigation
  Communications Workers of America Plan for Employees Pensions
    and Death Benefits v. CSK Auto Corporation, et al. 06-1503 (Communications Workers) Wilfred
    Fortier v. CSK Auto Corporation, et al. 06-1580 Communications Workers Rule 10b-5,
  Shareholder
    Derivative Litigation
   26




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SEC
    Investigation
  Committee-led
  Other
    Litigation
       27




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Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Price
      Price Range ofCommon StockHigh


LowFiscal 2006:First Quarter

$
16.84


$
12.23Second Quarter


13.29



10.71Third Quarter


15.90



10.62Fourth Quarter


17.27



15.17Fiscal 2005:First Quarter

$
17.65


$
15.26Second Quarter


18.85



15.31Third Quarter


19.20



13.96Fourth Quarter


15.95



14.11  28




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Performance
    Graph
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among CSK Auto, Inc., The S & P 500 Index,
    The S & P SmallCap Specialty Stores And The
    S & P MidCap Specialty Stores
  
  *
    
    $100 invested on 2/3/02 in stock or on 1/31/02 in
    index-including reinvestment of dividends. Indexes calculated on
    month-end basis.  Source: Research Data Group, Inc.
  2/3/02


2/2/03


2/1/04


1/30/05


1/29/06


2/4/07CSK Auto, Inc.


$
100.00



$
108.04



$
212.07



$
167.17



$
172.83



$
178.91S & P 500


$
100.00



$
76.98



$
103.60



$
110.05



$
121.47



$
139.11S & P SmallCap Specialty
    Stores


$
100.00



$
103.24



$
183.21



$
195.24



$
211.22



$
219.45S & P MidCap Specialty
    Stores


$
100.00



$
81.13



$
131.82



$
165.96



$
181.41



$
192.75   Dividends
    3 4
 29




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##### Table of Contents



Item 6.
    Selected
    Financial Data    Fiscal Year(1)2006


2005


2004


2003


2002(In thousands, except per share amounts and selected store
    data)Statement of Operations
    DataNet sales

$
1,907,776


$
1,651,285


$
1,604,991


$
1,606,731


$
1,532,176Cost of sales(2)


1,011,712



864,674



839,564



904,090



890,339Gross profit


896,064



786,611



765,427



702,641



641,837Operating and administrative(2)


788,400



653,471



629,309



624,557



591,090Investigation and restatement
    costs(3)


25,739















Store closing costs(4)


1,487



2,903



2,229



12,522



5,026Operating profit


80,438



130,237



133,889



65,562



45,721Interest expense


48,767



33,599



33,851



52,754



63,666Loss on debt retirement(5)


19,450



1,600



1,026



49,494



6,008Income (loss) before income taxes
    and cumulative effect of change in accounting principle


12,221



95,038



99,012



(36,686
)


(23,953
)Income tax expense (benefit)


4,991



37,248



39,450



(14,738
)


(10,460
)Income (loss) before cumulative
    effect of change in accounting principle


7,230



57,790



59,562



(21,948
)


(13,493
)Cumulative effect of change in
    accounting principle, net of tax(6)


966















Net income (loss)

$
6,264


$
57,790


$
59,562


$
(21,948
)

$
(13,493
)Basic earnings (loss) per share:Income (loss) before cumulative
    effect of change in accounting principle

$
0.16


$
1.30


$
1.30


$
(0.48
)

$
(0.33
)Cumulative effect of change in
    accounting principle(6)


0.02















Net income (loss) per share

$
0.14


$
1.30


$
1.30


$
(0.48
)

$
(0.33
)Diluted earnings (loss) per share:Income (loss) before cumulative
    effect of change in accounting principle

$
0.16


$
1.29


$
1.29


$
(0.48
)

$
(0.33
)Cumulative effect of change in
    accounting principle(6)


0.02















Net income (loss) per share

$
0.14


$
1.29


$
1.29


$
(0.48
)

$
(0.33
)Shares used in computing basic per
    share amounts


43,877



44,465



45,713



45,658



40,635Shares used in computing diluted
    per share amounts


44,129



44,812



46,002



45,658



40,752Other DataCommercial sales(7)

$
320,188


$
296,159


$
270,812


$
271,397


$
272,208Selected Store DataNumber of stores (end of period)


1,332



1,277



1,134



1,114



1,109Percentage increase (decrease) in
    comparable store net sales(8)


(1
)%



%


(1
)%


6
%


7
%Balance Sheet Data (end of
    period)Cash and cash equivalents

$
20,169


$
17,964


$
56,229


$
36,982


$
15,273Total assets


1,151,762



1,140,034



957,151



969,588



941,691Total debt (including current
    maturities)


531,501



577,594



508,877



534,654



536,332Stockholders equity


171,510



156,157



120,139



81,497



84,759  30




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##### Table of Contents



(1)
    
    Our fiscal year consists of 52 or 53 weeks, ends on the
    Sunday nearest to January 31 and is named for the calendar year
    just ended. All fiscal years presented had 52 weeks except
    fiscal 2006, which contained 53 weeks.(2)
    
    In March 2003, the Emerging Issues Task Force (EITF)
    of the Financial Accounting Standards Board (FASB)
    reached consensus on certain matters discussed in EITF
    No. 02-16,
    Accounting by a Customer (including a Reseller) for Certain
    Consideration Received from a Vendor.EITF
    No. 02-16 states
    that allowances provided by vendors are presumed to be a
    reduction in the costs of purchasing inventories (to be
    recognized in inventory and cost of sales), except for that
    portion that is a reimbursement for costs incurred to sell the
    vendors products. In order to qualify as a reimbursement,
    the costs must be specific, identifiable and incremental, to be
    recognized as a reduction to operating and administrative
    expenses. Under previous accounting guidance, we accounted for
    all non-performance based vendor allowances as a reduction of
    inventory cost and allocated performance-based vendor allowances
    as a reduction of advertising expense or cost of goods sold, as
    appropriate, in the period the expense was incurred. During the
    first quarter of fiscal 2003, we adopted the provisions of EITF
    No. 02-16
    and implemented a policy of recognizing all cooperative
    advertising arrangements and other vendor allowances as
    reductions of product costs, unless we are specifically required
    to substantiate costs incurred to the vendor and do so in the
    normal course of business. For fiscal 2002, vendor allowances
    totaling approximately $19.2 million were classified as a
    reduction to advertising expense (in operating and
    administrative expense) rather than as a reduction to cost of
    sales as currently required by EITF
    No. 02-16.(3)
    
    As further discussed in Note 16 to our consolidated
    financial statements, we restated our consolidated financial
    information for certain annual periods prior to fiscal 2005. The
    Audit Committee-led investigation and restatement process took
    us more than one year to complete, and we incurred approximately
    $25.7 million in legal, accounting consultant and audit
    fees in fiscal 2006 related to these matters.(4)
    
    Amounts relate to costs incurred in connection with the closure
    of existing stores. During fiscal 2003, we incurred
    $12.2 million associated with the reversal of the reserve
    established under EITF
    94-3 and the
    establishment of a new closed store reserve on the basis of our
    change in exit strategy in accordance with Statement of
    Financial Accounting Standards (SFAS) No. 146,
    Accounting for Costs Associated with Exit or Disposal
    Activities. See discussion under Store Closures in
    Item 7, Managements Discussion and Analysis of
    Financial Condition and Results of Operations.(5)
    
    In fiscal 2006, we purchased all of our 7% senior
    subordinated notes, repaid our
    33/8%
    exchangeable notes and made a payment on termination of an
    interest rate swap related to our 7% senior subordinated
    notes, which resulted in an aggregate loss on debt retirement of
    $19.5 million. The $1.6 million loss on debt
    retirement in fiscal 2005 resulted from the write-off of certain
    deferred financing fees associated with our former credit
    facility, which was repaid. See Item 7,
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and
    Capital Resources. During fiscal 2004, we recorded a loss
    on debt retirement of $1.0 million as a result of the
    redemption of the $15.0 million remaining balance of our
    12% senior notes. During fiscal 2003, we recorded a loss on
    debt retirement of $49.5 million primarily due to the early
    redemption of 94% of our 12% senior notes. During fiscal
    2002, we sold shares of our common stock in an underwritten
    public offering and used proceeds from the sale of those shares
    to retire approximately $71.7 million of our
    11% senior subordinated notes, resulting in a loss on debt
    retirement of $6.0 million.(6)
    
    In December 2004, the FASB issued SFAS No. 123R,
    Share-Based Payment.SFAS No. 123R sets
    accounting requirements for share-based compensation
    to employees and requires companies to recognize the grant-date
    fair value of stock options and other equity-based compensation
    in the income statement. The Company adopted
    SFAS No. 123R during fiscal 2006 using the modified
    prospective method. In addition to stock options and restricted
    stock, the Company granted incentive units in fiscal 2005 under
    a long-term incentive plan (the LTIP) for its senior
    executive officers, which are classified as liability awards,
    and as such, the transition rule under SFAS 123R requires
    that for an outstanding instrument that previously was
    classified as a liability and measured at intrinsic value, an
    entity should recognize the liability that would have been
    recorded under the fair value method at the date of adoption,
    net of any related tax effect, as the cumulative effect of a
    change in accounting principle. As of January 30, 2006, we
    recognized a cumulative effect of a change in accounting
    principle of approximately $1.0 million, net of
    $0.6 million tax benefit, associated with the LTIP.(7)
    
    Represents sales to commercial accounts, including sales from
    stores without commercial sales centers. 31




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##### Table of Contents



(8)
    
    Comparable store net sales data is calculated based on the
    change in net sales commencing after the time a new store has
    been open 12 months or an acquired store has been owned by
    the Company and open for 12 months. Therefore, sales for
    the first 12 months a new store is open or an acquired
    store has been owned and open are not included in the comparable
    store calculation. Relocations are included in comparable store
    net sales from the date of opening.   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis of financial condition
    and results of operations should be read in conjunction with
    Selected Financial Data, our consolidated historical
    financial statements and the notes to those statements that
    appear elsewhere in this report. Our discussion contains
    forward-looking statements based upon current expectations that
    involve risks and uncertainties, such as our plans, objectives,
    expectations and intentions. Actual results and the timing of
    events could differ materially from those anticipated in these
    forward-looking statements as a result of a number of factors,
    including those set forth under Note Concerning Forward
    Looking Information and Risk Factors elsewhere
    in this report.
  General
          
    Fiscal 2006 means the 53 weeks ended February 4, 2007;
    Fiscal 2005 means the 52 weeks ended January 29,
    2006; and
    Fiscal 2004 means the 52 weeks ended January 30, 2005.    
    Checker Auto Parts, founded in 1969, with 467 stores in the
    Southwestern, Rocky Mountain and Northern Plains states and
    Hawaii;
    Schucks Auto Supply, founded in 1917, with 228 stores in
    the Pacific Northwest and Alaska;
    Kragen Auto Parts, founded in 1947, with 506 stores primarily in
    California; and
    Murrays Discount Auto Stores, founded in 1972, with 126
    stores in the Midwest. 32




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##### Table of Contents



Significant
    Events
    Audit
    Committee Investigation and Restatement of the Consolidated
    Financial Statements
  Overview
  10-K,
    
    recording of improper accounting entries as directed by certain
    personnel;
    inappropriate override of, or interference with, existing
    policies, procedures and internal controls;
    withholding of information from, and providing of improper
    explanations and supporting documentation to, the Companys
    Audit Committee and Board of Directors, as well as its internal
    auditors and independent registered public accountants; and
    discouraging employees from raising accounting related concerns
    and suppressing accounting related inquiries that were made.     33




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##### Table of Contents



Background
  10-K, 10-K.
  Form 10-Qs
    follow-up follow-up 10-K.
   34




---



##### Table of Contents



co-chaired
  10-K
  Debt
    Refinancing
  3 8 3 8 5 8 3 8 5 8
  3 8 3 8 5 8 5 8 5 8
   35




---



##### Table of Contents



Review of
    Operations
    Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005Net sales


100.0
%


100.0
%


100.0
%Cost of sales


53.0
%


52.4
%


52.3
%Gross profit


47.0
%


47.6
%


47.7
%Other costs and expenses:Operating and administrative


41.3
%


39.6
%


39.2
%Investigation and restatement costs


1.3
%


0.0
%


0.0
%Store closing costs


0.1
%


0.2
%


0.1
%Operating profit


4.3
%


7.9
%


8.3
%Interest expense


2.6
%


2.0
%


2.1
%Loss on debt retirement


1.0
%


0.1
%


0.1
%Income before income taxes and
    cumulative effect of change in accounting principle


0.7
%


5.8
%


6.2
%Income tax expense


0.3
%


2.3
%


2.5
%Income before cumulative effect of
    change in accounting principle


0.4
%


3.5
%


3.7
%Cumulative effect of change in
    accounting principle, net of tax


0.1
%


0.0
%


0.0
%Net income


0.3
%


3.5
%


3.7
%   Fiscal
    2006 Compared with Fiscal 2005; Fiscal 2005 Compared with Fiscal
    2004
  Net
    Sales (Fiscal 2004-2006; Preliminary Fiscal 2007 to
    Date)
    Net Sales and Sales DataFiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005Retail sales

$
1,587,588


$
1,355,126


$
1,328,312Commercial sales


320,188



296,159



270,812Other sales










5,867Total net sales

$
1,907,776


$
1,651,285


$
1,604,991Sales growth  retail
    sales


17.2
%


2.0
%


0.0
%Sales growth 
    commercial sales


8.1
%


9.4
%


0.0
%Sales growth 
    comparable retail stores


(3.4
)%


(1.6
)%


(1.2
)%Sales growth 
    comparable commercial stores


7.7
%


8.1
%


1.8
%Number of stores open (at end of
    fiscal year)


1,332



1,277



1,134  36




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##### Table of Contents



37




---



##### Table of Contents



Gross
    Profit
        Operating
    and Administrative Expenses
        Investigation
    and Restatement Costs
  10-K
 38




---



##### Table of Contents



Store
    Closing Costs
        Interest
    Expense
      Loss
    on Debt Retirement
        Income
    Tax Expense
      Cumulative
    Effect of Change in Accounting Principle
  Share-Based
    Payment.
 39




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##### Table of Contents



Liquidity
    and Capital Resources
    3 4 3 4 3 4
    3 8 5 8 3 8 5 8
  5 8 3 4 3 4 3 4 3 4
 40




---



##### Table of Contents



3 4
  Senior
    Credit Facility
      Form 10-Q 3 4
  Term
    Loan Facility
  3 8
 41




---



##### Table of Contents



Repurchase
    of 7% Notes and Termination of Interest Rate
    Swap
    Repayment
    of
    33/8% Notes
    and Settlement of Equity Contracts
  3 8 3 8 3 8
  Restructuring
    of
    45/8% Notes
  5 8 5 8 5 8 3 4 5 8 3 4 No. 06-6, Debtors Accounting for a Modification (or Exchange) of
    Convertible Debt Instruments 5 8 paid-in-capital
  3 4
 42




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##### Table of Contents



3 4 3 4
  Fiscal
    2005 Transactions
  3 8 5 8
  Issuance
    of
    33/8% Notes
  3 8 3 8 3 8 3 8 3 8 3 8 3 8
 43




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##### Table of Contents



3 8
  Terms


33/8% NotesInterest Rate


3.375% per year until August 15,
    2010; 3.125% thereafterExchange Rate


43.3125 shares per $1,000
    principal (equivalent to an initial exchange price of
    approximately $23.09 per share)Maximum CSK shares exchangeable


5,414,063 common shares, subject
    to adjustment in certain circumstancesMaturity date


August 15, 2025Guaranteed by


CSK Auto Corporation and all of
    Autos present and future domestic subsidiaries, jointly
    and severally, on a senior basisDates that the noteholders may
    require Auto to repurchase some or all for cash at a repurchase
    price equal to 100% of the principal amount of the notes being
    repurchased, plus any accrued and unpaid interest


August 15, 2010, August 15, 2015,
    and August 15, 2020 or following a fundamental change as
    described in the indentureIssuance costs being amortized
    over a
    5-year
    period, corresponding to the first date the noteholders could
    require repayment


$4.8 millionAuto will not be able to redeem
    notes


Prior to August 15, 2010Auto may redeem for cash some or
    all of the notes


On or after August 15, 2010, upon
    at least 35 calendar days noticeRedemption price


Equal to 100% of the principal
    amount plus any accrued and unpaid interest and additional
    interest, if any, to, but not including, the redemption date   Issuance
    of
    45/8% Notes
    (Now
    63/4%
    Notes)
  5 8 5 8
  5 8 5 8
 44




---



##### Table of Contents



5 8 3 4
  Terms


63/4% NotesInterest Rate


6.75% per year until December 15,
    2010; 6.50% thereafterExchange Rate


60.6061 shares per $1,000
    principal (equivalent to an initial exchange price of
    approximately $16.50 per share)Maximum CSK shares exchangeable


6,060,610 common shares, subject
    to adjustment in certain circumstancesMaturity date


December 15, 2025Guaranteed by


CSK Auto Corporation and all of
    Autos present and future domestic subsidiaries, jointly
    and severally, on a senior basisDates that the noteholders may
    require Auto to repurchase some or all for cash at a repurchase
    price equal to 100% of the principal amount of the notes being
    repurchased, plus any accrued and unpaid interest


December 15, 2010, December 15,
    2015, and December 15, 2020 or following a fundamental change as
    described in the indentureIssuance costs being amortized
    over a
    5-year
    period, corresponding to the first date the noteholders could
    require repayment


$3.7 millionAuto will not be able to redeem
    notes


Prior to December 15, 2010Auto may redeem for cash some or
    all of the notes


On or after December 15, 2010,
    upon at least 35 calendar days noticeRedemption price


Equal to 100% of the principal
    amount plus any accrued and unpaid interest and additional
    interest, if any, to, but not including, the redemption date     
    During any fiscal quarter (and only during that fiscal quarter)
    commencing after January 29, 2006, if the last reported
    sale price of our common stock is greater than or equal to 130%
    of the exchange price for at least 20 trading days in the period
    of 30 consecutive trading days ending on the last trading day of
    the preceding fiscal quarter;
    If these Notes have been called for redemption by Auto; or
    Upon the occurrence of specified corporate transactions, such as
    a change in control, as described in the indenture under which
    these Notes were issued.  5 8
  5 8
 45




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##### Table of Contents



Analysis
    of Cash Flows
  Operating
    Activities
      Investing
    Activities
      Financing
    Activities
  3 8
  As of





As ofJanuary 29,





February 4,2006

Borrowings

Payments

2007Total debt excluding capitalized
    leases

$
549,988


$
435,636


$
(478,159
)

$
507,465   3 8 5 8
 46




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##### Table of Contents



Off-Balance
    Sheet Arrangements and Contractual Obligations
        Payments Due by PeriodWithin


1-3


3-5


After 5Contractual Obligation

Total


1 Year


Years


Years


YearsLong-term debt

$
507,465


$
56,098


$
8,055


$
101,749


$
341,563Interest on long-term debt


216,065



42,014



83,696



71,011



19,344Capital lease obligations


27,500



10,330



12,657



4,067



446Operating lease obligations(1)


811,969



146,818



234,775



167,585



262,791Other(2)


58,648



18,735



37,470



870



1,573Total contractual obligations

$
1,621,647


$
273,995


$
376,653


$
345,282


$
625,717     (1)
    
    Operating lease obligations are not reduced to reflect sublease
    income.(2)
    
    Includes a service contract and other obligations.  Store
    Closures
    Accounting for Costs Associated with
    Exit or Disposal Activities.
 47




---



##### Table of Contents



Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005Balance, beginning of year

$
7,033


$
7,774


$
12,001Store closing costs:Provision for store closing costs


258



246



285Other revisions in estimates


112



1,505



604Accretion


306



420



552Operating expenses and other


811



732



788Total store closing costs


1,487



2,903



2,229Purchase accounting
    adjustments  Murrays Discount Auto Stores






324



Payments:Rent expense, net of sublease
    recoveries


(2,279
)


(2,227
)


(2,895
)Occupancy and other expenses


(915
)


(740
)


(787
)Sublease commissions and buyouts


(415
)


(1,001
)


(2,774
)Total payments


(3,609
)


(3,968
)


(6,456
)Balance, end of year

$
4,911


$
7,033


$
7,774        48




---



##### Table of Contents



Factors
    Affecting Liquidity and Capital Resources
  Sales
    Trends
    Inflation
    Debt
    Covenants
       49




---



##### Table of Contents



Form 10-Q 3 4 5 8 3 4 3 4 3 4 3 4 3 4
  3 4 3 4
  Credit
    Ratings
    Description of Debt

Moodys Rating


Standard & PoorsSenior Credit Facility






Term Loan Facility


Ba3



B
+63/4% Notes


Ba3



B
−       Interest
    Rates
   50




---



##### Table of Contents



3 8 5 8 5 8
    Critical
    Accounting Matters
  and/or
  Inventory
    Valuation
  First-in,
  
    We reduce the FIFO carrying value of our inventory for estimated
    loss due to shrinkage since the most recent physical inventory.
    Our store shrinkage estimates are determined by dividing the
    shrinkage loss based on the most recent physical inventory by
    the sales for that store since its previous physical inventory.
    That percentage is multiplied by sales since the last physical
    inventory through period end. Our shrinkage expense for fiscal
    2006, 2005 and 2004 was approximately $31.6 million,
    $28.8 million and $20.8 million, respectively. While
    the shrinkage accrual is based on recent experience, there is a
    risk that actual losses may be higher or lower than expected.
    In certain instances, we retain the right to return obsolete and
    excess merchandise inventory to our vendors. In situations where
    we do not have a right to return, we record an allowance
    representing an estimated loss for the difference between the
    cost of any obsolete or excess inventory and the estimated
    retail selling price. Inventory levels and margins earned on all
    products are monitored monthly. Quarterly, we make an assessment
    if we expect to sell any significant amount of inventory below
    cost and, if so, estimate the amount of allowance to record.  Vendor
    Allowances
  No. 02-16, Accounting by a Customer (including a Reseller) for Certain
    Consideration Received from a Vendor. No. 02-16,
 51




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##### Table of Contents



Warranty
      Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005Warranty reserves, beginning of
    period

$
2,580


$
2,918


$
3,269Provision for warranty


3,428



963



881Allowances from vendors


6,067



5,841



5,851Reserves utilized


(8,167
)


(7,142
)


(7,083
)Warranty reserves, end of period

$
3,908


$
2,580


$
2,918   Deferred
    Tax Assets
    Legal
    Matters
     52




---



##### Table of Contents



Self-Insurance
    Reserves
    Store
    Closing Costs
        Valuation
    of Long-lived Assets
    Goodwill
    Impairment
  Goodwill and Other Intangible
    Assets
 53




---



##### Table of Contents



Recent
    Accounting Pronouncements
  Accounting for Certain Hybrid Financial
    Instruments  an amendment of FASB Statements
    No. 133 and 140 Accounting for Derivative Instruments
    and Hedging Activities Application of Statement 133 to Beneficial
    Interests in Securitized Financial Assets Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of
    Liabilities  a Replacement of FASB Statement
    No. 125
  Accounting for Servicing of Financial Assets  an
    amendment of FASB Statement No. 140 Accounting for Transfers and Servicing of Financial Assets
    and Extinguishments of Liabilities
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes.
  Considering the Effects of Prior
    Year Misstatements when Quantifying Misstatements in Current
    Year Financial Statements
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
 54




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk        AverageInterest


Fixed orBalance


Rate


Variable(In U.S. dollars)Term loan facility 
    matures June 2011

$
349,125



7.35
%


VariableSenior credit facility 
    matures July 2010


52,000



5.85
%


Variable63/4% senior
    exchangeable notes  matures December 2025 
    $93,061 carrying value


100,000



6.75
%


FixedDiscount on
    63/4% senior
    exchangeable notes (EITF
    06-6
    accounting adjustment)


(6,939
)






FixedSeller financing arrangements


13,279



Various



FixedCapital leases


24,036



Various



FixedTotal debt

$
531,501    55




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Report of
    Independent Registered Public Accounting Firm
       Consolidated
    financial statements and financial statement
    schedules
      Internal
    control over financial reporting
  Internal Control  Integrated
    Framework
   56




---



##### Table of Contents



1) Control Environment:
    a) Accounting for Inventory
  b) Accounting for Vendor
    Allowances
 57




---



##### Table of Contents



c) Accounting for Certain Accrued
    Expenses
  d) Accounting for Store Fixtures and
    Supplies
  2) Resources, and Policies and Procedures to Ensure
    Proper and Consistent Application of
    GAAP
  a) Accounting for Leases
  b) Allowance for Sales Returns
  c) Accounting for Certain Accrued
    Expenses
   58




---



##### Table of Contents



Internal Control  Integrated Framework Internal Control 
    Integrated Framework
     59




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005(In thousands, except share and per share data)Net sales

$
1,907,776


$
1,651,285


$
1,604,991Cost of sales


1,011,712



864,674



839,564Gross profit


896,064



786,611



765,427Other costs and expenses:Operating and administrative


788,400



653,471



629,309Investigation and restatement costs


25,739







Store closing costs


1,487



2,903



2,229Operating profit


80,438



130,237



133,889Interest expense


48,767



33,599



33,851Loss on debt retirement


19,450



1,600



1,026Income before income taxes and
    cumulative effect of change in accounting principle


12,221



95,038



99,012Income tax expense


4,991



37,248



39,450Income before cumulative effect of
    change in accounting principle


7,230



57,790



59,562Cumulative effect of change in
    accounting principle, net of tax


966







Net income

$
6,264


$
57,790


$
59,562Basic earnings per share:Income before cumulative effect of
    change in accounting principle

$
0.16


$
1.30


$
1.30Cumulative effect of change in
    accounting principle


0.02







Net income per share

$
0.14


$
1.30


$
1.30Shares used in computing per share
    amounts


43,876,533



44,465,409



45,713,271Diluted earnings per share:Income before cumulative effect of
    change in accounting principle

$
0.16


$
1.29


$
1.29Cumulative effect of change in
    accounting principle


0.02







Net income per share

$
0.14


$
1.29


$
1.29Shares used in computing per share
    amounts


44,129,278



44,812,302



46,002,376    60




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  February 4,


January 29,2007


2006(In thousands,except share data)ASSETSCash and cash equivalents

$
20,169


$
17,964Receivables, net of allowances of
    $393 and $436, respectively


43,898



29,861Inventories


502,787



508,507Deferred income taxes


46,500



37,806Prepaid expenses and other current
    assets


31,585



20,047Total current assets


644,939



614,185Property and equipment, net


174,409



174,112Intangibles, net


67,507



71,807Goodwill


224,937



223,507Deferred income taxes


4,200



20,845Other assets, net


35,770



35,578Total assets

$
1,151,762


$
1,140,034LIABILITIES AND
    STOCKHOLDERS EQUITYAccounts payable

$
260,146


$
208,507Accrued payroll and related
    expenses


60,306



48,483Accrued expenses and other current
    liabilities


81,569



89,141Current maturities of long-term
    debt


56,098



42,465Current maturities of capital
    lease obligations


8,761



9,500Total current liabilities


466,880



398,096Long-term debt


451,367



507,523Obligations under capital leases


15,275



18,106Other liabilities


46,730



60,152Total non-current liabilities


513,372



585,781Commitments and contingenciesStockholders equity:Common stock, $0.01 par
    value, 90,000,000 shares authorized, 43,950,751 and
    43,830,322 shares issued and outstanding at
    February 4, 2007 and January 29, 2006, respectively


440



438Deferred compensation






(1,735
)Additional paid-in capital


433,912



426,560Accumulated deficit


(262,842
)


(269,106
)Total stockholders equity


171,510



156,157Total liabilities and
    stockholders equity

$
1,151,762


$
1,140,034    61




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005(In thousands)Cash flows provided by (used in)
    operating activities:Net income

$
6,264


$
57,790


$
59,562Adjustments:Depreciation and amortization on
    property and equipment


40,645



36,628



32,882Amortization of other items


7,585



4,231



4,209Amortization of debt discount and
    deferred financing costs


4,539



2,161



1,883Stock-based compensation expense


4,972



571



191Tax benefit relating to exercise of
    stock options






231



390Write downs on disposal of
    property, equipment and other assets


3,354



2,145



2,034Loss on debt retirement


8,496



1,600



131Deferred income taxes


3,771



36,008



38,078Changes in operating assets and
    liabilities:Receivables


(13,412
)


6,747



(3,557
)Inventories


3,652



(23,588
)


(11,710
)Prepaid expenses and other current
    assets


(11,538
)


7,616



5,286Accounts payable


51,639



17,329



(20,546
)Accrued payroll, accrued expenses,
    and other current liabilities


4,838



9,987



(4,222
)Other operating activities


(5,165
)


2,867



(1,154
)Net cash provided by operating
    activities


109,640



162,323



103,457Cash flows used in investing
    activities:Capital expenditures


(37,529
)


(36,775
)


(24,800
)Business acquisitions, net of cash
    acquired


(4,292
)


(177,658
)


Other investing activities


(1,778
)


(1,499
)


(3,424
)Net cash used in investing
    activities


(43,599
)


(215,932
)


(28,224
)Cash flows provided by (used in)
    financing activities:Borrowings under senior credit
    facility  term loan










20,600Payments under senior credit
    facility  term loan






(252,450
)


(23,150
)Borrowings under senior credit
    facility  line of credit


84,800



230,300



Payments under senior credit
    facility  line of credit


(126,800
)


(136,300
)


Borrowings under term loan facility


350,000







Payments under term loan facility


(875
)






Payment of debt issuance costs


(13,166
)


(9,612
)


(1,412
)Retirement of 12% senior notes










(14,910
)Proceeds from issuance of 4.625%
    exchangeable notes






100,000



Proceeds from issuance of 3.375%
    exchangeable notes






125,000



Retirement of 3.375% exchangeable
    notes


(125,000
)






Retirement of 7% senior notes


(225,000
)






Payments on capital lease
    obligations


(10,301
)


(10,893
)


(16,232
)Proceeds from seller financing
    arrangements


428



3,164



1,175Payments on seller financing
    arrangements


(484
)


(381
)


(214
)Proceeds from repayment of
    stockholder receivable






10



63Proceeds from exercise of stock
    options


1,196



1,130



2,074Purchase of common stock






(25,029
)


(23,726
)Net proceeds from termination of
    common stock call option and warrants


1,555







Premium on common stock call option






(26,992
)


Premium from common stock warrants






17,820



Other financing activities


(189
)


(423
)


(254
)Net cash (used in) provided by
    financing activities


(63,836
)


15,344



(55,986
)Net increase (decrease) in cash


2,205



(38,265
)


19,247Cash and cash equivalents,
    beginning of period


17,964



56,229



36,982Cash and cash equivalents, end of
    period

$
20,169


$
17,964


$
56,229    62




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 SUPPLEMENTAL
    DISCLOSURES
  Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005(In thousands)Supplemental Disclosures of
    Cash Flow InformationCash paid during the year for:Interest

$
40,066


$
25,351


$
31,688Income taxes


56



98



1,878Non-cash investing and financing
    activities:Fixed assets acquired under
    capital leases

$
6,731


$
3,905


$
4,770Consideration received in business
    disposition










7,114  63




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  AdditionalCommon Stock


Paid-in


Stockholder


Deferred


Accumulated


TotalShares


Amount


Capital


Receivable


Compensation


Deficit


Equity(In thousands, except share data)Balances at February 1,
    2004


46,497,936


$
465


$
467,563


$
(73
)

$



$
(386,458
)

$
81,497Repurchase and retirement of common
    stock


(1,574,956
)


(16
)


(23,710
)














(23,726
)Restricted stock


4,463







1,209







(1,164
)






45Amortization of deferred
    compensation


















146







146Recovery of stockholder receivable














63











63Exercise of options


188,858



2



2,072















2,074Tax benefit relating to stock
    option exercises










390















390Compensation expense, stock options










88















88Net income






















59,562



59,562Balances at January 30,
    2005


45,116,301



451



447,612



(10
)


(1,018
)


(326,896
)


120,139Repurchase and retirement of common
    stock


(1,409,300
)


(14
)


(25,015
)














(25,029
)Restricted stock


17,731







1,159







(1,288
)






(129
)Amortization of deferred
    compensation


















571







571Recovery of stockholder receivable














10











10Exercise of options


105,590



1



1,129















1,130Tax benefit relating to stock
    option exercises










231















231Compensation expense, stock options










7















7Warrants and call options, net of
    tax










1,437















1,437Net income






















57,790



57,790Balances at January 29,
    2006


43,830,322



438



426,560







(1,735
)


(269,106
)


156,157Restricted stock


28,466



1



(221
)














(220
)Adoption of SFAS No. 123R
    (Note 2)










(1,735
)






1,735







Exercise of options


91,963



1



1,195















1,196Compensation expense, stock-based
    awards










3,048















3,048Warrants and call options, net of
    tax










390















390Discount on senior exchangeable
    notes, net of tax










4,675















4,675Net income






















6,264



6,264Balances at February 4,
    2007


43,950,751


$
440


$
433,912


$



$



$
(262,842
)

$
171,510    64




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
        
    Checker Auto Parts, founded in 1969, with 467 stores in the
    Southwestern, Rocky Mountain and Northern Plains states and
    Hawaii;
    Schucks Auto Supply, founded in 1917, with 228 stores in
    the Pacific Northwest and Alaska;
    Kragen Auto Parts, founded in 1947, with 506 stores primarily in
    California; and
    Murrays Discount Auto Stores, founded in 1972, with 126
    stores in the Midwest.    Note 1 
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    
    Murrays Inc., an automotive parts and accessories
    retailer, from December 19, 2005 (the acquisition date)
    through February 4, 2007. The Murrays legal corporate
    entities were merged into Auto in fiscal 2006.
    Automotive Information Systems, Inc. (AIS), a
    provider of diagnostic vehicle repair information, for fiscal
    2004 through the date of the sale of all of our issued and
    outstanding capital stock of AIS on January 21, 2005 to
    Mobile Productivity, Inc., (MPI).    Basis
    of Presentation
   65




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Disclosures about Segments
    of Enterprises and Related Information
  Fiscal
    Year
    Cash
    Equivalents
    Fair
    Value of Financial Instruments
    Derivative
    Financial Instruments
  Accounting for
    Derivative Instruments and Hedging Activities
  Receivables
    Concentration
    of Credit Risk
     66




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Inventory
    Valuation
  First-in,
  
    We reduce the FIFO carrying value of our inventory for estimated
    loss due to shrinkage since the most recent physical inventory.
    Our store shrinkage estimates are determined by dividing the
    shrinkage loss based on the most recent physical inventory by
    the sales for that store since its previous physical inventory.
    That percentage is multiplied by sales since the last physical
    inventory through period end. Our shrinkage expense for fiscal
    2006, 2005 and 2004 was approximately $31.6 million,
    $28.8 million and $20.8 million, respectively. While
    the shrinkage accrual is based on recent experience, there is a
    risk that actual losses may be higher or lower than expected.
    In certain instances, we retain the right to return obsolete and
    excess merchandise inventory to our vendors. In situations where
    we do not have a right to return, we record an allowance
    representing an estimated loss for the difference between the
    cost of any obsolete or excess inventory and the estimated
    retail selling price. Inventory levels and margins earned on all
    products are monitored monthly. Quarterly, we make an assessment
    if we expect to sell any significant amount of inventory below
    cost and, if so, estimate the amount of allowance to record.    February 4,


January 29,2007


2006FIFO cost

$
562,405


$
559,359Administrative and overhead costs


28,725



31,679Vendor allowances


(69,469
)


(67,959
)Shrinkage


(18,116
)


(12,488
)Obsolescence


(758
)


(2,084
)Net inventory

$
502,787


$
508,507   Property
    and Equipment
    Internal
    Software Development Costs
   67




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
    and Other Intangible Assets
  Goodwill and Other
    Intangible Assets
  Impairment
    of Other Long-Lived Assets
    Lease
    Obligations
    Self-Insurance
    Reserves
    Revenue
    Recognition
   68




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Vendor
    Allowances and Cost of Sales
  No. 02-16, Accounting by a Customer (including a Reseller) for Certain
    Consideration Received from a Vendor. No. 02-16,
  Warranty
   69




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005Warranty reserves, beginning of
    period

$
2,580


$
2,918


$
3,269Provision for warranty


3,428



963



881Allowances from vendors


6,067



5,841



5,851Reserves utilized


(8,167
)


(7,142
)


(7,083
)Warranty reserves, end of period

$
3,908


$
2,580


$
2,918   Store
    Closing Costs
        Advertising
  No. 02-16,
  Preopening
    Costs
    Income
    Taxes
   70




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Earnings
    per Share
  Earnings Per Share
  Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005Numerator for basic and diluted
    earnings per share:Net income

$
6,264


$
57,790


$
59,562Denominator for basic earnings
    per share:Weighted average shares
    outstanding (basic)


43,877



44,465



45,713Denominator for diluted
    earnings per share:Weighted average shares
    outstanding (basic)


43,877



44,465



45,713Effect of dilutive securities


252



347



289Weighted average shares
    outstanding (diluted)


44,129



44,812



46,002Shares excluded as a result of
    anti-dilution:Stock options


2,029



790



482   3 4
  Use of
    Estimates
    Legal
    Matters
   71




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 2 
    Accounting
    Change for Share-Based Compensation  Share-Based Payment Accounting for Stock Issued to Employees
  Stock
    Options
    Accounting for Stock-Based
    Compensation Form S-8
 72




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year2006

2005

2004Dividend yield

0%

0%

0%Risk free interest rate

4.45%

3.86% - 4.40%

3.07% - 3.82%Expected life of options

4.5 years

6 years

6 yearsExpected volatility

38.03%

25% - 33%

27% - 36%   Dividend Yield
  Risk-Free Interest Rate
  Expected Life Share Based Payment
  Expected Volatility
    Restricted
    Stock
    Long-Term
    Incentive Plan
   73




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Stock Appreciation Rights and Other Variable
    Stock Option or Award Plans
     74




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year EndedJanuary 29,


January 30,2006


2005Net income  as reported

$
57,790


$
59,562Add: Stock-based employee
    compensation expense in reported net income, net of related
    income taxes


351



142Deduct: Total stock-based employee
    compensation expense determined under fair value based method
    for all awards, net of related income taxes


(4,535
)


(990
)Net income  pro forma

$
53,606


$
58,714Earnings per share 
    basic:As reported

$
1.30


$
1.30Pro forma

$
1.21


$
1.28Earnings per share 
    diluted:As reported

$
1.29


$
1.29Pro forma

$
1.20


$
1.28As reported sharesBasic


44,465



45,713Diluted


44,812



46,002Pro forma shares used in
    calculation:Basic


44,465



45,713Diluted


44,823



45,829     FAS 123R-3, Transition Election Related to Accounting for the Tax Effects
    of Share-Based Payment Awards
 75




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 3 
    Recent
    Accounting Pronouncements  Accounting for Certain Hybrid Financial
    Instruments  an amendment of FASB Statements
    No. 133 and 140 Accounting for Derivative Instruments
    and Hedging Activities Application of Statement 133 to Beneficial
    Interests in Securitized Financial Assets Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of
    Liabilities  a Replacement of FASB Statement
    No. 125
  Accounting for Servicing of Financial Assets  an
    amendment of FASB Statement No. 140 Accounting for Transfers and Servicing of Financial Assets
    and Extinguishments of Liabilities
  Accounting for Uncertainty in Income Taxes Accounting for Income Taxes.
  Considering the Effects of Prior
    Year Misstatements when Quantifying Misstatements in Current
    Year Financial Statements
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  Note 4 
    Business
    Acquisition   76




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3 4
  Business Combinations
    Cash and cash equivalents

$
480Receivables


2,963Inventories


51,363Deferred income taxes


3,628Prepaids and other assets


2,87261,306Property and equipment


20,041Trade name and trademarks


49,400Customer relationships


370Leasehold interests


9,324Goodwill


104,541Other long-term assets


65Total assets acquired


245,047Accounts payable and accrued
    liabilities


36,494Unfavorable leasehold interests


7,482Deferred income taxes


19,320Other liabilities


804Total liabilities assumed


64,100Fair value of net assets acquired

$
180,947    77




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 5 
    Receivables    February 4,


January 29,2007


2006Amounts due under vendor allowance
    programs and cooperative advertising arrangements

$
24,122


$
10,587Trade receivables from commercial
    and other customers


17,175



14,614Landlord, subtenant receivables,
    and other


2,994



5,096Gross receivables


44,291



30,297Allowance for doubtful accounts


(393
)


(436
)Net accounts receivable

$
43,898


$
29,861     Note 6 
    Property
    and Equipment    February 4,


January 29,2007


2006


Estimated Useful LifeLand

$
348


$
348Buildings


15,251



14,198


15 - 25 yearsLeasehold improvements


159,070



146,690


Shorter of lease term or useful
    lifeFurniture, fixtures and equipment


168,845



164,745


3 - 10 yearsProperty under capital leases


97,974



94,220


5 - 15 years or life of leasePurchased software


10,829



9,141


5 years452,317



429,342Less: accumulated depreciation and
    amortization


(277,908
)


(255,230
)Property and equipment, net

$
174,409


$
174,112      78




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 7 
    Goodwill
    and Other Intangible Assets           79




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Carrying











CarryingValue as of











Value as ofJanuary 29,











February 4,2006


Additions


Amortization


Adjustments


2007Amortized intangible
    assets:Leasehold interests

$
28,556


$



$



$
99


$
28,655Accumulated amortization


(10,111
)






(1,952
)


(99
)


(12,162
)18,445







(1,952
)






16,493License agreement


4,417















4,417Accumulated amortization


(631
)






(643
)






(1,274
)3,786







(643
)






3,143Tradenames and trademarks


49,400















49,400Accumulated amortization


(190
)






(1,668
)






(1,858
)49,210







(1,668
)






47,542Customer relationships


370















370Accumulated amortization


(4
)






(37
)






(41
)366







(37
)






329Amortized intangibles, net


71,807







(4,300
)






67,507Unamortized intangible
    assets:Goodwill


223,507



1,430











224,937Total intangible assets, net

$
295,314


$
1,430


$
(4,300
)

$



$
292,444     Fiscal 2007

$
4,204Fiscal 2008


4,127Fiscal 2009


4,050Fiscal 2010


3,993Fiscal 2011


3,947$
20,321  80




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 8 
    Long-Term
    Debt  Overview
    February 4,


January 29,2007


2006Term loan facility

$
349,125


$
Senior credit facility


52,000



94,00063/4% senior
    exchangeable notes, carrying balance decreased in fiscal 2006 by
    $6.9 million discount in accordance with EITF No.
    06-6


93,061



100,0007% senior subordinated notes,
    carrying balance decreased in fiscal 2005 by $6.7 million
    relating to SFAS No. 133 hedge accounting adjustment






218,27933/8% senior
    exchangeable notes






125,000Seller financing arrangements


13,279



12,709Total debt


507,465



549,988Less: Current portion of term loan
    facility


3,478



Senior credit facility(1)


52,000



42,000Current maturities of seller
    financing arrangements


620



465Total debt (non-current)

$
451,367


$
507,523     (1)
    
    This portion of the revolving line of credit represents the
    expected paydown in the following 12-month period.  Fiscal
    2006 Refinancing Transactions
  3 8 3 8 3 8 5 8 3 8
  Fiscal
    2005 Financing Transactions
  3 8 3 8 5 8 3 8 5 8
 81




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Term
    Loan Facility
  3 8
    Senior
    Credit Facility
       82




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    45/8% Notes
    (Now
    63/4% Notes)
  5 8 5 8 5 8 5 8 3 4 1 2 3 4 3 4 3 4 06-6, Debtors Accounting for a Modification (or Exchange) of
    Convertible Debt Instruments 3 4 paid-in-capital
 83




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3 4 3 4 3 4
  Terms


63/4% NotesInterest Rate


6.75% per year until December 15,
    2010; 6.50% thereafterExchange Rate


60.6061 shares per $1,000
    principal (equivalent to an initial exchange price of
    approximately $16.50 per share)Maximum CSK shares exchangeable


6,060,610 common shares, subject
    to adjustment in certain circumstancesMaturity date


December 15, 2025Guaranteed by


CSK Auto Corporation and all of
    Autos present and future domestic subsidiaries, jointly
    and severally, on a senior basisDates that the noteholders may
    require Auto to repurchase some or all for cash at a repurchase
    price equal to 100% of the principal amount of the notes being
    repurchased, plus any accrued and unpaid interest


December 15, 2010, December 15,
    2015, and December 15, 2020 or following a fundamental change as
    described in the indentureIssuance costs being amortized
    over a
    5-year
    period, corresponding to the first date the noteholders could
    require repayment


$3.7 millionAuto will not be able to redeem
    notes


Prior to December 15, 2010Auto may redeem for cash some or
    all of the notes


On or after December 15, 2010,
    upon at least 35 calendar days noticeRedemption price


Equal to 100% of the principal
    amount plus any accrued and unpaid interest and additional
    interest, if any, to, but not including, the redemption date   3 4
  
    During any fiscal quarter (and only during that fiscal quarter)
    commencing after January 29, 2006, if the last reported
    sale price of our common stock is greater than or equal to 130%
    of the exchange price for at least 20 trading days in the
    period of 30 consecutive trading days ending on the last trading
    day of the preceding fiscal quarter;
    If the
    63/4% Notes
    have been called for redemption by Auto; or
    Upon the occurrence of specified corporate transactions, such as
    a change in control, as described in the indenture under which
    the
    63/4% Notes
    were issued.  3 4
 84




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and potentially Settled in, a Companys Own Stock 3 4 No. 00-19 3 4
  3 4 3 4 3 4 3 4 3 4
  7%
    Notes
       85




---



##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  33/8% Notes
  3 8
  3 8 3 8 3 8
  Terms


33/8% NotesInterest Rate


3.375% per year until August 15,
    2010; 3.125% thereafterExchange Rate


43.3125 shares per $1,000
    principal (equivalent to an initial exchange price of
    approximately $23.09 per share)Maximum CSK shares exchangeable


5,414,063 common shares, subject
    to adjustment in certain circumstancesMaturity date


August 15, 2025Guaranteed by


CSK Auto Corporation and all of
    Autos present and future domestic subsidiaries, jointly
    and severally, on a senior basisDates that the noteholders may
    require Auto to repurchase some or all for cash at a repurchase
    price equal to 100% of the principal amount of the notes being
    repurchased, plus any accrued and unpaid interest


August 15, 2010, August 15, 2015,
    and August 15, 2020 or following a fundamental change as
    described in the indentureIssuance costs being amortized
    over a
    5-year
    period, corresponding to the first date the noteholders could
    require repayment


$4.8 millionAuto will not be able to redeem
    notes


Prior to August 15, 2010Auto may redeem for cash some or
    all of the notes


On or after August 15, 2010, upon
    at least 35 calendar days noticeRedemption price


Equal to 100% of the principal
    amount plus any accrued and unpaid interest and additional
    interest, if any, to, but not including, the redemption date  86




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3 8
  
    During any fiscal quarter (and only during that fiscal quarter)
    commencing after January 29, 2006, if the last reported
    sale price of our common stock was greater than or equal to 130%
    of the exchange price for at least 20 trading days in the period
    of 30 consecutive trading days ending on the last trading day of
    the preceding fiscal quarter;
    If the
    33/8% Notes
    had been called for redemption by Auto; or
    Upon the occurrence of specified corporate transactions, such as
    a change in control, as described in the indentures under which
    the
    33/8% Notes
    were issued.  3 8
  3 8 3 8 3 8 3 8 No. 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock.
  3 8 3 8 No. 00-19 3 8 3 8 3 8
  3 8 3 8 3 8 3 8 3 8
 87




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Seller
    Financing Arrangements
  No. 97-10, The Effect of Lessee Involvement in Asset Construction.
  Debt
    Covenants
        Form 10-Q 3 4
 88




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5 8 3 4 3 4 3 4 3 4 3 4
  3 4 3 4
  Restrictions
    on Paying Dividends and Movement of Funds
  3 8
  Long-Term
    Debt Maturities
    Fiscal 2007

$
56,098Fiscal 2008


3,997Fiscal 2009


4,058Fiscal 2010


97,295Fiscal 2011


4,454Thereafter


341,563$
507,465   Note 9 
    Derivative
    Financial Instruments   89




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 10 
    Leases
    and Other Commitments      Fiscal Year2006


2005


2004Minimum rentals

$
140,484


$
122,378


$
114,613Contingent rentals


802



1,068



1,125Sublease rentals


(7,955
)


(8,306
)


(8,907
)$
133,331


$
115,140


$
106,831     Capital


Operating


SubleaseLeases


Leases


RentalsFiscal 2007

$
10,330


$
146,818


$
(6,723
)Fiscal 2008


7,226



127,336



(4,041
)Fiscal 2009


5,431



107,439



(2,365
)Fiscal 2010


2,983



91,106



(1,630
)Fiscal 2011


1,084



76,479



(1,003
)Thereafter


446



262,791



(1,188
)27,500


$
811,969


$
(16,950
)Less: amounts representing interest


(3,464
)Present value of obligations


24,036Less: current portion


(8,761
)Long-term obligation

$
15,275  90




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 11 
    Employee
    Benefit Plans    Supplemental
    Retirement Plan Agreement
    Retirement
    Program
    management
    or highly compensated employees
 91




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Long-Term
    Incentive Plan
    2004
    Stock and Incentive Plan
       92




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Options
    Activity
    Weighted


Weighted





WeightedAverage


Average





Average


AggregateNumber of


Exercise


Fair


Options


Exercisable


IntrinsicShares


Price


Value


Exercisable


Price


ValueBalance at February 1, 2004


1,869,309


$
13.91







1,058,713


$
14.27Granted at market price


1,127,896



13.78



5.55Exercised


(188,858
)


10.97Cancelled


(161,515
)


16.22Balance at January 30, 2005


2,646,832



13.92







964,898


$
13.87


$
7,269,000Granted at market price


918,527



15.92



5.74Exercised


(105,590
)


10.70Cancelled


(252,360
)


17.94Balance at January 29, 2006


3,207,409



14.31







2,368,144


$
14.56


$
7,681,000Granted at market price


626,236



16.62



6.35Exercised


(91,963
)


13.05Cancelled


(461,161
)


19.02Balance at February 4, 2007


3,280,521


$
14.13







2,353,327


$
13.54


$
7,938,000     Options Outstanding


Options ExercisableWeighted








WeightedAverage


Weighted





Average


AggregateNumber


Remaining


Average





Exercisable


IntrinsicRange of Exercise Prices

Outstanding


Contractual Life


Exercise Price


Exercisable


Price


Value$ 2.75 - $12.86


766,062



1.86


$
10.26



765,895


$
10.26$12.88 - $13.32


765,603



4.55



13.32



520,438



13.32$13.40 - $16.33


355,782



3.26



14.46



296,109



14.42$16.35 - $16.35


663,716



4.67



16.35



663,716



16.35$16.42 - $19.83


729,358



6.27



16.86



107,169



18.31$ 2.75 - $19.83


3,280,521



4.19


$
14.13



2,353,327


$
13.54


$
6,873,000      93




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year2006


2005


2004Cash received

$
1,196


$
1,130


$
2,074Tax benefits

$



$
231


$
390   Restricted
    Stock Activity
      WeightedAverageNumber of


Grant DateShares


Fair ValueNon-vested at January 29, 2006


137,779


$
14.72Granted


71,147



16.62Forfeited


(43,909
)


14.70Cancelled


(36,708
)


14.46Non-vested at February 4, 2007


128,309


$
15.86   Note 12 
    Income
    Taxes    Fiscal Year2006


2005


2004CurrentFederal

$
596


$
1,156


$
1,362State






84



10596



1,240



1,372DeferredFederal


3,533



29,626



31,576State


862



6,382



6,5024,395



36,008



38,078Total

$
4,991


$
37,248


$
39,450  94




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year2006


2005


2004Income before income taxes

$
12,221


$
95,038


$
99,012Federal income tax rate


35
%


35
%


35
%Expected provision (benefit) for
    income taxes


4,277



33,263



34,654Permanent wage add-back for
    federal tax credits


127



151



185Non-deductible executive
    compensation










251Permanent effect of stock based
    compensation


42







Other permanent differences


30



33



135State taxes, net of federal benefit


550



4,114



4,263Changes to tax reserves






1,096



Tax credits and other


(35
)


(1,409
)


(38
)Actual provision for income taxes

$
4,991


$
37,248


$
39,450     February 4,


January 29,2007


2006Current deferred income taxes:Store closing costs

$
999


$
1,196Accrued employee benefits


15,809



16,101Credits and other benefits






369Property taxes


(2,146
)


(2,146
)Provision for bad debts


155



171Tax loss carryforwards


7,861



5,267Inventory valuation differences


21,456



12,485Other


3,156



4,992Valuation allowance


(790
)


(629
)Total current deferred income tax
    asset (liability)


46,500



37,806Non-current deferred income taxes:Store closing costs


951



1,580Accrued employee benefits


2,490



Capital lease expenditures


(1,712
)


(1,478
)Deferred rent and incentives


10,939



7,626Credits and other benefits


11,697



10,608Depreciation and amortization


(48,004
)


(45,708
)Tax loss carryforwards


32,216



40,306Call options for convertible debt






10,610Discount on senior exchangeable
    notes


(2,727
)


Other


(688
)


(1,576
)Valuation allowance


(962
)


(1,123
)Total non-current deferred income
    tax asset (liability)


4,200



20,845Net deferred tax asset

$
50,700


$
58,651  95




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 13 
    Store
    Closing Costs    Accounting for Costs Associated with
    Exit or Disposal Activities.
     96




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005Balance, beginning of year

$
7,033


$
7,774


$
12,001Store closing costs:Provision for store closing costs


258



246



285Other revisions in estimates


112



1,505



604Accretion


306



420



552Operating expenses and other


811



732



788Total store closing costs


1,487



2,903



2,229Purchase accounting
    adjustments  Murrays Discount Auto Stores






324



Payments:Rent expense, net of sublease
    recoveries


(2,279
)


(2,227
)


(2,895
)Occupancy and other expenses


(915
)


(740
)


(787
)Sublease commissions and buyouts


(415
)


(1,001
)


(2,774
)Total payments


(3,609
)


(3,968
)


(6,456
)Balance, end of year

$
4,911


$
7,033


$
7,774           Note 14 
    Stock
    Repurchase Program   97




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 15 
    Transactions
    and Relationships with Related Parties        Note 16 
    Legal
    Matters  Audit
    Committee Investigation and Restatement of the Consolidated
    Financial Statements
  Overview
  10-K,
    
    recording of improper accounting entries as directed by certain
    personnel;
    inappropriate override of, or interference with, existing
    policies, procedures and internal controls;
    withholding of information from, and providing of improper
    explanations and supporting documentation to, the Companys
    Audit Committee and Board of Directors, as well as its internal
    auditors and independent registered public accountants; and
    discouraging employees from raising accounting related concerns
    and suppressing accounting related inquiries that were made. 98




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Background
  Form 10-K 10-K), 10-K.
  Form 10-Qs
     99




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  follow-up follow-up 10-K.
      10-K
  Securities
    Class Action Litigation
  Communications Workers of America Plan for Employees Pensions
    and Death Benefits v. CSK Auto Corporation, et al. 06-1503 (Communications Workers) Wilfred
    Fortier v. CSK Auto Corporation, et al. 06-1580 Communications Workers Rule 10b-5,
 100




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Shareholder
    Derivative Litigation
    SEC
    Investigation
    Other
    Litigation
     101




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 17 
    Fair
    Value of Financial Instruments    February 4, 2007


January 29, 2006Carrying


Estimated


Carrying


EstimatedAmount


Fair Value


Amount


Fair ValueReceivables

$
43,898


$
43,898


$
29,861


$
29,861Amounts due under term loan
    facility

$
349,125


$
349,125


$



$
Amounts due under senior credit
    facility

$
52,000


$
52,000


$
94,000


$
94,000Obligations under
    63/4% senior
    exchangeable notes

$
93,061


$
124,211


$
100,000


$
105,325Obligations under 7% senior
    subordinated notes

$



$



$
218,279


$
183,403Obligations under
    33/8% senior
    exchangeable notes

$



$



$
125,000


$
118,281   Note 18 
    Guarantees  and/or
 102




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
        Note 19 
    Subsequent
    Events    form 10-Q 3 4 5 8 3 4 3 4 3 4
 103




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3 4
  Note 20 
    Quarterly
    Results (unaudited)      Fiscal Year 2006First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(1)(In thousands, except share and per share data)Results of operationsNet sales

$
463,768


$
488,742


$
483,075


$
472,191Gross profit

$
215,195


$
232,553


$
226,887


$
221,429Investigation and restatement costs

$
3,670


$
11,962


$
6,736


$
3,371Operating profit

$
29,213


$
20,463


$
18,731


$
12,031Interest expense

$
10,321


$
10,999


$
13,308


$
14,139Loss on debt retirement

$



$
19,336


$
90


$
24Income (loss) before cumulative
    effect of change in accounting principle

$
18,892


$
(9,872
)

$
5,333


$
(2,132
)Cumulative effect of change in
    accounting principle, net of tax

$
966


$



$



$
Net income (loss)

$
10,191


$
(5,817
)

$
3,359


$
(1,469
)Basic earnings (loss) per share:Income (loss) before cumulative
    effect of change in accounting principle

$
0.25


$
(0.13
)

$
0.08


$
(0.03
)Cumulative effect of change in
    accounting principle


0.02











Net income (loss) per share

$
0.23


$
(0.13
)

$
0.08


$
(0.03
)Diluted earnings (loss) per share:Income (loss) before cumulative
    effect of change in accounting principle

$
0.25


$
(0.13
)

$
0.08


$
(0.03
)Cumulative effect of change in
    accounting principle


0.02











Net income (loss) per share

$
0.23


$
(0.13
)

$
0.08


$
(0.03
)Shares used in computing per share
    amounts Basic


43,844



43,855



43,867



43,937Diluted


44,218



44,083



44,050



44,361  104




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fiscal Year 2005(1)First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(In thousands, except share and per share data)Results of operationsNet sales

$
405,277


$
426,604


$
415,919


$
403,485Gross profit

$
188,540


$
199,298


$
195,302


$
203,471Operating profit

$
30,202


$
37,584


$
33,258


$
29,193Interest expense

$
8,726


$
8,439


$
7,554


$
8,880Loss on debt retirement

$



$
1,600


$



$
Net income

$
13,058


$
16,749


$
15,664


$
12,319Basic earnings per share:

$
0.29


$
0.37


$
0.36


$
0.28Diluted earnings per share:

$
0.29


$
0.37


$
0.36


$
0.28Shares used in EPS calculation
    Basic


45,130



45,135



43,787



43,816Diluted


45,494



45,539



44,121



44,086     (1)
    
    Our fiscal year consists of 52 or 53 weeks, ends on Sunday
    nearest to January 31 and is named for the calendar year just
    ended. All fiscal years presented had 52 weeks except
    fiscal 2006, which contained 53 weeks. The additional week
    in fiscal 2006 is included in the fourth quarter. 105




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  AUDIT
    COMMITTEE INVESTIGATION AND RESTATEMENT OF THE CONSOLIDATED
    FINANCIAL STATEMENTS
  Overview
  10-K,
    
    recording of improper accounting entries as directed by certain
    personnel;
    inappropriate override of, or interference with, existing
    policies, procedures and internal controls;
    withholding information from, and providing of improper
    explanations and supporting documentation to, the Companys
    Audit Committee and Board of Directors, as well as its internal
    auditors and independent registered public accountants; and
    discouraging employees from raising accounting related concerns
    and suppressing accounting related inquiries that were made.      Background
  10-K, 10-K.
 106




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##### Table of Contents



Form 10-Qs
    follow-up follow-up 10-K.
      co-chaired
 107




---



##### Table of Contents



10-K
  DISCLOSURE
    CONTROLS AND PROCEDURES
  Rule 13a-15(e)
    MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Rules 13a-15(f) 15d-15(f)
         108




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##### Table of Contents



Control Environment:
    a) Accounting for Inventory
  b) Accounting for Vendor Allowances
 109




---



##### Table of Contents



c) Accounting for Certain Accrued Expenses
  d) Accounting for Store Fixtures and
    Supplies
  Resources, and Policies and Procedures to Ensure
    Proper and Consistent Application of GAAP:
  a) Accounting for Leases
  b) Allowance for Sales Returns
  c) Accounting for Certain Accrued
    Expenses
   110




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##### Table of Contents



PLAN FOR
    REMEDIATION OF MATERIAL WEAKNESSES
  Remediation
    Initiatives
      Control Environment:
  General
     111




---



##### Table of Contents



Accounting for Inventory
  Accounting for Vendor Allowances
  
    The Company has enhanced its review and approval processes to
    ensure review by appropriate members of management of critical
    information necessary to assess vendor allowance collections and
    the proper recognition of vendor allowances in the appropriate
    periods.
    The Company plans to reevaluate and enhance its contract review
    process, including training of merchandising, finance and legal
    staffs, as well as formalizing the communication process among
    the three groups, to better provide for timely identification of
    potential issues and accurate accounting treatment. The Company
    also plans to implement enhanced processes and procedures so
    that its merchandising, finance and legal staffs have adequate
    information to conduct their review and provide meaningful input
    and communication during the contract negotiation process to
    allow for accurate accounting treatment for both standard and
    non-standard contracts. 112




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##### Table of Contents




    The Company plans to conduct training for its merchandising,
    finance and legal staffs relative to vendor arrangements,
    including contract provisions and construction, the impact of
    amendments and side and ancillary agreements and accounting
    treatment of related vendor allowances.
    The Company has consolidated the oversight and accounting for
    all vendor allowance financial transactions under one senior
    accounting manager to provide for consistent application with
    respect to the accounting for vendor allowances.  Accounting for Certain Accrued Expenses
  Accounting for Store Fixtures and Supplies
  Resources and, Policies and Procedures to Ensure
    Proper and Consistent Application of GAAP:
  General
     113




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##### Table of Contents



Accounting for Leases
  Allowance for Sales Returns
  Interim
    Measures Pending Completion of Remediation
    Initiatives
    
    The fiscal 2006 year-end reporting processes was extended,
    allowing the Company to conduct additional analyses and
    procedures and make additional adjustments as necessary to
    ensure the accuracy of financial reporting through fiscal 2006.
    Where the Company identified the existence of a material
    weakness, the Company has performed extensive substantive
    procedures to ensure that affected amounts are fairly stated for
    all periods presented in this Annual Report.
    The Company retained, on an interim basis, numerous experienced
    accounting consultants, other than the Companys
    independent registered public accounting firm, with relevant
    accounting experience, skills and knowledge, working under the
    supervision and direction of the Companys management, to
    assist with the fiscal 2006 year-end reporting process.
    The Company conducted a detailed and extensive review of account
    reconciliations, non-routine transactions and agreements,
    financial statement classifications, spreadsheets, and journal
    entries and related substantiation for accuracy and conformance
    with GAAP.  Control
    deficiencies not constituting material weaknesses
    Managements
    conclusions
     114




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##### Table of Contents



CHANGES
    IN INTERNAL CONTROL OVER FINANCIAL REPORTING
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Directors
  10-K.
    Name

Age

PositionMaynard Jenkins


64


Chairman of the Board and Chief
    Executive OfficerJames G. Bazlen


57


DirectorMorton Godlas


84


DirectorTerilyn A. Henderson


50


DirectorCharles K. Marquis


64


DirectorCharles J. Philippin


57


DirectorWilliam A. Shutzer


60


Director   Maynard Jenkins
  James Bazlen
 115




---



##### Table of Contents



Morton Godlas
  Terilyn A. Henderson
  Charles K. Marquis
  Charles J. Philippin
  William A. Shutzer
    Audit
    Committee
  Rule 10A-3. Regulation S-K
 116




---



##### Table of Contents



Corporate
    Governance Guidelines and Committee Charters
    www.cskauto.com
  Communications
    with the Board of Directors
  e-mail boardofdirectors@cskauto.com. c/o Legal www.cskauto.com.
  Codes of
    Business Conduct and Ethics
  www.cskauto.com and/or
  Section 16(a)
    Beneficial Ownership Reporting Compliance
      Item 11.
    Executive
    Compensation  COMPENSATION
    OF DIRECTORS AND EXECUTIVE OFFICERS
  Compensation
    Discussion and Analysis
    
    an overview and design of the Companys executive
    compensation policies, programs and practices;
    the elements of our executive compensation program; 117




---



##### Table of Contents




    the Companys stock ownership guidelines; and
    the impact of regulatory requirements on executive compensation.  Overview
    and Design of our Compensation Program
        Elements
    of the Executive Compensation Program
    
    base salary;
    annual incentive awards payable in cash;
    long-term equity incentive awards in the form of stock options
    and restricted stock granted under the 2004 Stock Plan; and
    long-term incentive bonuses payable in cash and awarded under a
    Long Term Incentive Plan (LTIP) established pursuant
    to the 2004 Stock Plan.    Base
    Salary
   118




---



##### Table of Contents



Annual
    Cash Incentive Compensation
  and/or
  10-K
   119




---



##### Table of Contents



Long-Term
    Equity-Based Incentive Awards
        Grant DateEquity Grant



Percentage

Grant Date



Fair Marketas a

Total 2006

of Equity

Black-Scholes

Percentage of

Value ofPercentage of

Equity

Value

Value of

Equity Value

ExecutivesExecutive

Executive

Value at

Granted in

Executives

Granted in

RestrictedOfficers

Officers

Date of

Stock

Stock Option

Restricted

StockSalary

Salary

Grant

Options

Award

Stock

AwardExecutive Officers Title

($)

(%)

($)

(%)

($)

(%)

($)Executive Vice President


100,000



100
%


100,000



70
%


70,000



30
%


30,000Senior Vice President


100,000



85
%


85,000



70
%


59,500



30
%


25,500     Stock
    Option Grants
   120




---



##### Table of Contents



change-in-control
  Restricted
    Stock Grants
  change-in-control
  Long-term
    Incentive Bonuses
       121




---



##### Table of Contents



Other
    benefits
  401(k)
    Plan
    Deferred
    Compensation Plan
  management
    or highly compensated employees
  Perks and
    other personal benefits
  gross-up,
  Employment
    and post-employment arrangements
  Employment
    Agreement
  Change-in-Control
   122




---



##### Table of Contents



Supplemental
    Retirement Compensation
  and/or Change-in-Control
  Severance
    and Retention Agreements
       123




---



##### Table of Contents



Stock
    Ownership Guidelines
      Impact
    of Regulatory Requirements on Compensation
      Compensation
    Committee Report
  Regulation S-K
      
  Compensation
    Committee Processes and Procedures
   124




---



##### Table of Contents



www.cskauto.com
    
    annually review and approve corporate goals and objectives
    relevant to the compensation of the Chief Executive Officer;
    evaluate the Chief Executive Officers performance in light
    of these goals and objectives; and either as a committee or
    together with the other independent directors (as directed by
    the Board of Directors), determine and approve the Chief
    Executive Officers compensation level based on this
    evaluation;
    oversee the annual evaluation of the executive management of the
    Company and approve the executive officers annual base
    salary, and incentive, equity-based and other compensation;
    review and make recommendations to the Board of Directors at
    least annually with respect to non-CEO compensation and
    incentive and equity-based compensation plans;
    adopt, administer, approve and ratify awards under incentive
    compensation and equity-based plans, and review and monitor
    awards under such plans as may be required to comply with
    applicable tax laws and SEC rules; and
    annually review the form and amount of director compensation and
    make recommendations to the Board of Directors, as appropriate,
    in accordance with the Companys Corporate Governance
    Guidelines.      Compensation
    Committee Interlocks and Insider Participation
    Executive
    Compensation Tables
   125




---



##### Table of Contents



Summary
    Compensation Table
    Change inPensionValue andNonqualifiedDeferredStock

Option

Compensation

All OtherSalary

Bonus

Awards

Awards

Earnings

Compensation

TotalName and Principal Position

Year

($)

($)(1)

($)(2)

($)(3)

($)(4)

($)(5)

($)Maynard Jenkins 


2006



900,000











447,454



317,420



43,536



1,708,410Chairman and Chief Executive OfficerJames Riley 


2006



319,612



90,840



25,430



82,852







60,005



578,739Senior Vice President and
    Chief Financial OfficerDale Ward 


2006



337,365



105,000



51,530



89,991







21,960



605,846Executive Vice PresidentLarry Buresh 


2006



321,916



99,000



48,779



81,969







8,764



560,428Senior Vice President and
    Chief Information OfficerLarry Ellis 


2006



243,305



75,000



36,454



61,244







7,329



423,332Senior Vice President 
    LogisticsMartin Fraser 


2006



396,346







9,305



(43,482
)






814,028



1,176,197Former President and
    Chief Operating Officer(6)Don Watson 


2006



264,321







3,727



(19,900
)






498,289



746,437Former Senior Vice President and
    Chief Administrative Officer(7)     (1)
    
    Fiscal 2006 amounts represent discretionary bonuses paid in
    fiscal 2007. Bonuses for eligible associates under the 2006
    General and Administrative Staff Incentive Plan (the 2006
    G&A Plan) were calculated using a predetermined
    percentage of a participants annual base salary relative
    to specified target levels for the eligible associates
    level of individual performance and the Companys
    performance. In the case of the NEOs, other than our Chief
    Executive Officer, bonuses were awarded at the target level,
    equal to 30% of an officers year-end base salary
    (Mr. Rileys bonus was prorated due to an approved
    medical leave of absence during a portion of fiscal 2006). The
    Committee took this approach in view of the continued
    unavailability of financial statements for 2006 and earlier
    periods as well as the Board of Directors desire to keep
    intact the Companys management and administrative
    personnel notwithstanding the difficulties being faced by the
    Company.(2)
    
    The amounts included in the Stock Awards column
    represent the compensation cost recognized by the Company in
    fiscal 2006 related to non-option stock awards granted in 2004,
    2005 and 2006, in accordance with FAS 123(R).
    Messrs. Fraser and Watson forfeited 14,899 and 6,695
    restricted shares, respectively, upon their departures from the
    Company in September 2006. Compensation cost in fiscal 2006 for
    Messrs. Fraser and Watson was impacted by these forfeitures.All stock awards shown are based on the average of the high and
    low prices of the Companys common stock on the date of
    grant. For a discussion of valuation assumptions, see
    Note 2 to the Companys Consolidated Financial
    Statements above. Please also see the Grants of Plan Based
    Awards Table below for more information regarding the
    option awards the Company granted during fiscal year 2006. 126




---



##### Table of Contents



(3)
    
    The amounts included in the Option Awards column are
    the amounts of compensation cost recognized by the Company in
    fiscal 2006 related to stock option awards in 2004, 2005 and
    2006, in accordance with FAS 123(R). Mr. Fraser and
    Mr. Watson forfeited 56,566 and 25,890 stock options
    respectively upon their departures from the Company in September
    2006. Compensation cost in fiscal 2006 for Messrs. Fraser
    and Watson was impacted by these forfeitures.For a discussion of valuation assumptions, see Note 2 to
    the Companys Consolidated Financial Statements above.
    Please also see the Grants of Plan Based Awards
    Table below for more information regarding the option
    awards the Company granted during fiscal year 2006.(4)
    
    The amounts included in the Change in Pension Value and
    Nonqualified Deferred Compensation Earnings column are the
    changes in values of Mr. Jenkins Supplemental
    Executive Retirement Plan (SERP) during fiscal 2006.
    For additional information on the valuation assumptions used to
    calculate the pension value, refer to the Pension
    Benefits table below.(5)
    
    The amounts shown in the All Other Compensation
    column are attributable to the following:
    
    Mr. Jenkins: Matching contributions to
    Mr. Jenkins 401(k) Plan; life insurance premiums;
    actual incremental cost attributed to the personal use of a
    Company-provided vehicle; taxable cost of group-term life
    insurance; and $14,121 tax gross up in relation to personal use
    of Company-provided vehicle.
    
    Mr. Riley: Life insurance premiums; actual incremental cost
    attributed to the personal use of a Company-provided vehicle;
    taxable cost of group-term life insurance; relocation and living
    expenses paid by the Company; cost paid by the Company for a
    chartered flight relative to Mr. Rileys medical leave
    of absence; $273 tax gross up in relation to
    Mr. Rileys personal use of Company-provided vehicle;
    and $11,710 tax gross up in relation to Mr. Rileys
    commuting and interim living expenses.
    
    Mr. Ward: Matching contributions to Mr. Wards
    401(k) Plan; life insurance premiums; actual incremental cost
    attributed to the personal use of a Company-provided vehicle;
    taxable cost of group-term life insurance; and $5,267 tax gross
    up in relation to Mr. Wards personal use of
    Company-provided vehicle.
    
    Mr. Buresh: Matching contributions to
    Mr. Bureshs 401(k) Plan, $1,992 of which was later
    transferred to Mr. Bureshs Deferred Compensation Plan
    (see Non-Qualified Deferred Compensation below);
    life insurance premiums; and taxable cost of group-term life
    insurance.
    
    Mr. Ellis: Matching contributions to Mr. Ellis
    401(k) Plan; life insurance premiums; and taxable cost of
    group-term life insurance.
    
    Mr. Fraser: Matching contributions to
    Mr. Frasers 401(k) Plan; life insurance premiums;
    actual incremental cost attributed to the personal use of a
    Company-provided vehicle; taxable cost of group-term life
    insurance; and severance and related post-employment payments
    described below in footnote 6.
    
    Mr. Watson: Matching contributions to
    Mr. Watsons 401(k) Plan; life insurance premiums;
    actual incremental cost attributed to the personal use of a
    Company-provided vehicle; taxable cost of group-term life
    insurance; and severance and related post-employment payments
    described below in footnote 7.(6)
    
    Mr. Fraser was an officer of the Company until his
    departure in September 2006. In addition to the amounts
    described in footnote (5) above, the amounts included in
    the All Other Compensation column for
    Mr. Fraser include cash severance payments in the amount of
    $688,107, the cost to the Company for nine months of
    post-separation benefits (consisting of nine months of continued
    medical, vision and dental insurance and estimated executive
    health/medical expense reimbursements) in the amount of $18,993
    and outplacement services not to exceed $135,000 ($90,000 of
    which have been incurred to date).(7)
    
    Mr. Watson was an officer of the Company until his
    departure in September 2006. In addition to the amounts
    described in footnote (5) above, the amounts included in
    the All Other Compensation column for
    Mr. Watson include cash severance in the amount of
    $376,991, the cost to the Company for nine months of
    post-separation benefits (consisting of nine months of continued
    medical, vision and dental insurance and estimated executive
    health/medical expense reimbursements) in the amount of $12,528
    and outplacement services in the amount of $90,000. 127




---



##### Table of Contents



Grants of
    Plan-Based Awards in 2006
    All Other


All OtherStock


Option








GrantAwards:


Awards:


Exercise


Closing


DateNumber of


Number of


or Base


Price of


Fair ValueShares of


Securities


Price of


Stock on


of Stock andStock or


Underlying


Option


Grant


OptionGrant


Units


Options


Awards


Date


AwardsName

Date


(#)(1)


(#)


($/Sh)(2)


($/Sh)


($)(3)Maynard Jenkins






















James Riley


11/30/06







30,247



16.62



16.65



192,13511/30/06



5,065











16.65



84,155Dale Ward


11/30/06







37,741



16.62



16.65



239,73811/30/06



6,320











16.65



105,007Larry Buresh


11/30/06







30,247



16.62



16.65



192,13511/30/06



5,065











16.65



84,155Larry Ellis


11/30/06







22,914



16.62



16.65



145,55411/30/06



3,837











16.65



63,752Martin Fraser






















Don Watson






















     (1)
    
    Represents time vested restricted stock awards. The terms of the
    restricted stock awards provide for three equal annual vestings
    commencing one year from the award date.(2)
    
    On November 30, 2006, the Compensation Committee, by
    unanimous written consent, granted stock options and awarded
    restricted stock to certain Company employees, including the
    NEOs. The exercise price of the stock options was $16.615 per
    share, the high-low average of our common stock as reported on
    the NYSE. We use the average of the high and low prices of the
    Companys common stock on the date of the grant in
    accordance with the terms of our 2004 Stock Plan, described in
    more detail in the Compensation Discussion and Analysis above.
    The terms of the options provide for vesting in three equal
    annual installments commencing one year from the grant date. The
    options have a term of seven years and will expire on
    November 30, 2013.(3)
    
    The deemed grant date present values for the stock option grants
    are based on the Black-Scholes option pricing model. Based on
    assumed (i) risk free interest rate of 4.45%,
    (ii) expected stock price volatility of 38.08%,
    (iii) no dividend yield and (iv) option exercises
    occurring after six years, the model produces a per option share
    value of $6.35. 128




---



##### Table of Contents



Outstanding
    Equity Awards at Fiscal 2006 Year-End
    Stock AwardsOption Awards





MarketNumber of


Number of








Number of


Value ofSecurities


Securities








Shares or


Shares orUnderlying


Underlying








Units of


Units ofUnexercised


Unexercised


Option





Stock that


Stock thatOptions


Options


Exercise


Option


have not


have notExercisable


Unexercisable


Price


Expiration


Vested


VestedName

(#)


(#)


($)


Date


(#)


($)(1)Maynard Jenkins


36,000







14.00



12/31/2007







72,000







11.00



02/09/2009







216,365







11.00



02/09/2009







50,000







9.87



04/05/2009







242,424



80,808



13.32



10/18/2011







183,673







16.35



06/28/2012











1,000,000
(2)


N/A
(3)


5/15/2010
(2)James Riley


13,333



26,667



15.03



10/24/2012



3,334



54,878



30,247



16.62



11/30/2013



5,065



83,370125,000
(2)


N/A
(3)


5/15/2010
(2)Dale Ward


9,150







14.00



12/31/2007







4,125







9.87



04/05/2009







27,289



13,645



13.32



10/18/2011



1,884



31,01128,676







16.35



06/28/2012



3,164



52,079



37,741



16.62



11/30/2013



6,320



104,027250,000
(2)


N/A
(3)


5/15/2010
(2)Larry Buresh


9,150







14.00



12/31/2007







25,000







11.00



02/09/2009







17,000







11.00



02/09/2009







1,250







11.00



02/09/2009







12,500







9.87



04/05/2009







25,427



12,714



13.32



10/18/2011



1,755



28,88727,555







16.35



06/28/2012



3,040



50,038



30,247



16.62



11/30/2013



5,065



83,370250,000
(2)


N/A
(3)


5/15/2010
(3)Larry Ellis


2,800







11.00



02/09/2009







5,000







9.87



04/05/2009







18,954



9,478



13.32



10/18/2011



1,309



21,54620,643







16.35



06/28/2012



2,277



37,479



22,914



16.62



11/30/2013



3,837



63,157250,000
(2)


N/A
(3)


5/15/2010
(2)Martin Fraser


12,200







11.00



02/09/2009







25,000







9.87



04/05/2009







64,286







16.35



06/28/2012







Don Watson


12,200







11.00



02/09/2009







17,500







9.87



04/05/2009







23,022







16.35



06/28/2012







  129




---



##### Table of Contents



(1)
    
    Based on the closing price of our common stock as of
    February 4, 2007 ($16.46 per share), as reported on the
    NYSE.(2)
    
    Represents number of incentive units granted under the LTIP
    unvested at fiscal 2006 year-end. Subject to specific
    exceptions (e.g., retirement) as set forth in the LTIP, each
    LTIP participant will be entitled to receive a distribution of
    cash on May 15 of each of the calendar years 2007, 2008, 2009
    and 2010 (each date being a Payment Date) equal in
    value to the amount by which the average of the per share
    closing prices of the Companys common stock over a
    specified period of time (after release of the fiscal year
    earnings for the immediately preceding fiscal year) exceeds the
    base value of $20.00 (which is subject to adjustment in the
    event of a change in the Companys capitalization)
    multiplied by 25% of the LTIP participants aggregate
    number of incentive bonus units, so long as LTIP participant
    remains continuously employed by the Company through the
    applicable Payment Date. In the event the formula described
    above results in no payment to the LTIP participant on a Payment
    Date, then the incentive bonus units vesting on such date will
    be forfeited without consideration. On May 15, 2007, the
    formula described above resulted in no payment to the LTIP
    participants. Accordingly, on May 15, 2007,
    Messrs. Jenkins, Riley, Ward, Buresh and Ellis each
    forfeited 25% of their total incentive bonus units.(3)
    
    There is no exercise price for LTIP incentive units.  Vesting
    Schedule of all Outstanding Stock Option and Restricted Stock
    Grants at Fiscal 2006 Year-End
    Option/Stock


Vesting Date -


Vesting Date -


Vesting Date -Award


First 1/3 of


Second 1/3 of


Final 1/3 ofExpiration


Option/Stock


Option/Stock


Option/StockDate


Award


Award


Award12/31/2007
(1)


12/21/2000



12/21/2001



12/21/200202/09/2009
(2)










04/05/2009



04/05/2003



04/05/2004



04/05/200510/18/2011



10/18/2005



10/18/2006



10/18/200706/28/2012
(3)


01/29/2006



01/29/2006



01/29/200610/24/2012



10/24/2006



10/24/2007



10/24/200811/30/2013



11/30/2007



11/30/2008



11/30/2009     (1)
    
    In December 2006, due to a blackout imposed by the
    Company in light of its lack of currency in its financial
    reporting, associates who were awarded stock options under the
    Companys stock option plans were unable to exercise
    outstanding options until the Company became current with its
    financial reporting obligations. This grant would have expired
    during the blackout period. On December 15, 2006, all
    associates with outstanding stock options under this grant were
    provided the opportunity to elect to either exercise their
    amended options during the calendar year 2007 after the
    expiration of the blackout period (and subject to other
    applicable trading restrictions) or have their options expire
    unexercised on December 31, 2007. Some of the NEOs had
    outstanding stock options under this grant and accordingly
    executed their respective election agreements.(2)
    
    In 2001, the Compensation Committee authorized the re-price and
    re-grant of all stock option awards outstanding with an exercise
    price greater than $14.00 for certain members of senior
    management, including the then NEOs. Such options were to be
    re-granted with an exercise price the higher of 1) the fair
    market value of the Companys common stock on the re-grant
    date, or 2) a value between $10.00 and $11.00. Each of the
    stock option grants would continue to vest (if not already fully
    vested) based on its original vesting schedule.(3)
    
    On January 29, 2006, the last day of fiscal 2005, the
    Compensation Committee authorized the acceleration of all stock
    option grants with an exercise price greater than $15.90. This
    included the stock option grant set to expire on June 28,
    2012. The restricted stock granted June 28, 2005 shall
    continue to vest in 3 installments each on the first, second and
    third anniversaries of the grant date. 130




---



##### Table of Contents



Option
    Exercises and Stock Vested in 2006
    Option Awards


Stock AwardsNumber of





Number ofShares


Value


Shares


ValueAcquired on


Realized on


Acquired on


Realized onExercise


Exercise


Vesting


VestingName

(#)


($)(1)


(#)


($)(2)Maynard Jenkins














James Riley










1,666



25,823Dale Ward










1,581



19,130







1,883



29,243Larry Buresh










1,519



18,380







1,755



27,255Larry Ellis(3)


1,400



3,647



1,138



13,770







1,308



20,313Martin Fraser


28,282



83,856



3,545



42,895Don Watson


17,945



38,462



1,545



18,695     (1)
    
    Represents the difference between the exercise price of the
    option and the market price at the time of exercise.(2)
    
    Represents the market value of the shares of Restricted Stock on
    the day the stock vested. These shares represent restricted
    stock granted in 2004 and 2005.(3)
    
    Mr. Ellis exercised and held these options in November
    2006. These options were set to expire in December 2006.  Pension
    Benefits in 2006
    Number of


Present


PaymentsYears


Value of


DuringCredited


Accumulated


Last FiscalService


Benefit


YearName

Plan Name


(#)


($)(1)


($)Maynard Jenkins


SERP
(2)


N/A



4,062,075



0James Riley














Dale Ward














Larry Buresh














Larry Ellis














Martin Fraser














Don Watson














     (1)
    
    The estimated present value of the accumulated benefit is based
    on the following assumptions: (1) retirement date of
    June 30, 2007 and (2) an applicable discount rate of
    8.5%.(2)
    
    The Company entered into this SERP with Mr. Jenkins in
    August 2000. He vested
    331/3%
    of the maximum SERP benefit on February 1, 2002 and an
    additional
    162/3%
    of the maximum SERP benefit on February 1 of each of the next
    four years. Mr. Jenkins thus became fully vested in the
    maximum SERP benefit on February 1, 2006 after five years
    of credited service.   131




---



##### Table of Contents



Non-qualified
    Deferred Compensation in 2006
  management or highly compensated
    employees
  AggregateExecutive


Registrant


Aggregate


Aggregate


Balance atContributions in


Contributions in


Earnings in


Withdrawals/


Fiscal 2006Fiscal 2006


Fiscal 2006


Fiscal 2006


Distributions


Year-EndName

($)(1)


($)


($)


($)


($)Maynard Jenkins


















James Riley


















Martin Fraser


















Dale Ward


















Larry Buresh


48,287



0
(2)


4,337



0



52,624Don Watson


















Larry Ellis


















     (1)
    
    To the extent required to be reported, all cash awards were
    reported as compensation to the NEO in the Summary Compensation
    Table.(2)
    
    Although no dollars were contributed by the Company into
    Mr. Bureshs Deferred Compensation account in fiscal
    2006, $3,077 was transferred from Mr. Bureshs 401(k)
    account (of which $1,992 represented Company contribution) in
    March 2007 as a result of the Companys 401(k)
    non-discrimination testing. 132




---



##### Table of Contents



Potential
    Payments Upon Termination or
    Change-in-Control
    Maynard
    Jenkins
  Involuntarynot forCause (by





InvoluntaryCompany)


Involuntary


Terminationor for Good


Termination


(by Executive)Involuntary


Reason (by


Following a


Following aVoluntary











for Cause


Executive)


Change in


Change inExecutive Payments Upon

Termination


Retirement


Death


Disability


Termination


Termination


Control


ControlTermination

($)


($)


($)


($)


($)


($)


($)


($)Cash Severance






900,000
(1)


1,800,000



1,800,000







1,800,000



1,800,000



1,800,000Acceleration of Unvested Equity
    AwardsStock Options






253,737



253,737



253,737











253,737



Restricted Stock






























Retirement
    BenefitsSERP


6,000,000



6,000,000



6,000,000



6,000,000



6,000,000



6,000,000



6,000,000



6,000,000Health and Welfare
    coverage(2)


121,806



121,806



121,806



121,806







121,806



121,806



121,806LTIP
    Units(3)






0
(4)


0
(5)


0
(5)






0
(6)


0
(7)


0
(7)Tax Gross Up


























0



0Earned Vacation


153,312



153,312



153,312



153,312



156,740



156,740



156,740



156,740Outplacement Services






























     (1)
    
    As previously announced in a Current Report on
    Form 8-K
    filed April 18, 2007, the Compensation Committee of the
    Board approved amendments to Mr. Jenkins Employment
    Agreement to memorialize a $900,000 bonus opportunity available
    to Mr. Jenkins, subject to his continued service with the
    Company until the new Chief Executive Officer is hired. As
    previously discussed, on June 8, 2007, the Company
    announced that Lawrence N. Mondry would succeed Mr. Jenkins
    as the Companys Chief Executive Officer.(2)
    
    This figure represents the estimated cost of the continued
    medical benefits for 10 years under Mr. Jenkins
    SERP agreement based on a projected increase of premium costs at
    8% per annum as well as an average annual reimbursement of
    $4,000 per year of out-of-pocket Exec-U-Care expenses (amounts
    not to be grossed up for taxes).(3)
    
    For each incentive bonus unit vested, the LTIP participant shall
    be entitled to receive a cash payment from the Company equal to
    the per share excess amount, if any, by which the average of the
    per share closing prices of the Companys common stock on
    the NYSE over a specified period of time (after release by the
    Company of its fiscal year earnings) (the measuring
    period) exceeds $20 per share (which figure is subject to
    certain adjustments in the event of a change in the
    Companys capitalization) (the LTIP Payment).(4)
    
    If Mr. Jenkins employment is terminated by reason of
    his retirement (as defined in the LTIP) and the termination date
    occurs prior to the occurrence of a change in control of the
    Company, Mr. Jenkins will be entitled to an LTIP Payment of
    100% of the amount, if any, that would have otherwise been
    payable to him pursuant to the LTIP, with such amount determined
    and paid as if he had not retired but had remained employed by
    the Company through each of the then remaining payment dates.
    The amount of cash, if any, that will ultimately be received by
    Mr. Jenkins is not known until the end of the measuring
    period (which, barring a 133




---



##### Table of Contents



change in control would be April 30 of 2007, 2008, 2009 and
    2010). Assuming the stock price remains the same as the price on
    February 2, 2007, the total amount payable to
    Mr. Jenkins would be $0.  (5)
    
    If Mr. Jenkins employment is terminated due to death
    or following a disability and the termination date occurs prior
    to the occurrence of a change in control of the Company,
    Mr. Jenkins or his estate will be entitled to an LTIP
    Payment of (1) 100% of the amount, if any, that would have
    otherwise been payable to him with respect to the Plan Year (as
    defined in the LTIP) in which the termination date occurs and
    (2) 50% of the amount, if any, that would have otherwise
    been payable to him with respect to the Plan Year immediately
    following the Plan Year in which the termination date occurs, in
    each case with such amounts determined and paid as if he had not
    died or become disabled but had remained employed by the Company
    through each of the then remaining payment dates. The amount of
    cash, if any, that will ultimately be received by
    Mr. Jenkins is not known until the end of the measuring
    period (which, barring a change in control would be April 30 of
    2007, 2008, 2009 and 2010). Assuming the stock price remains the
    same as the price on February 2, 2007, the total amount
    payable to Mr. Jenkins would be $0.(6)
    
    If Mr. Jenkins employment is terminated by the
    Company without Cause (as defined in the LTIP) after
    October 31, 2006 and the termination date occurs prior to
    the occurrence of a change in control of the Company,
    Mr. Jenkins will be entitled to an LTIP Payment of 100% of
    the amount, if any, that would have otherwise been payable to
    him with respect to the Plan Year (as defined in the LTIP) in
    which the termination date occurs, with such amounts determined
    and paid as if he had remained employed by the Company through
    the applicable remaining payment date. The amount of cash, if
    any, that will ultimately be received by Mr. Jenkins is not
    known until the end of the measuring period (which, barring a
    change in control would be April 30 of 2007, 2008, 2009 and
    2010). Assuming the stock price remains the same as the price on
    February 2, 2007, the total amount payable to
    Mr. Jenkins would be $0.(7)
    
    If Mr. Jenkins employment is terminated following a
    change in control of the Company (1) by reason of his
    death, disability or retirement or (2) by reason of a
    termination of employment by the Company without Cause or by
    Mr. Jenkins with Good Reason (Cause and Good Reason being
    defined in the LTIP), Mr. Jenkins will be entitled to an
    immediate cash payment equal to the per share excess, if any, of
    the per share value of the consideration received by the
    Companys common stockholders in a change in control
    transaction as determined by the Committee in good faith and
    $20, multiplied by 100% of the aggregate number of incentive
    bonus units awarded to Mr. Jenkins and in respect of which
    Mr. Jenkins has not yet received payment. Assuming the per
    share transaction value of the consideration received by the
    Companys common stockholders following a change in control
    of the Company is the same as the stock price on
    February 2, 2007, the total amount payable to
    Mr. Jenkins would be $0. 134




---



##### Table of Contents



James B.
    Riley (1)
  Involuntarynot forCause (by





InvoluntaryCompany)


Involuntary


Terminationor for


Termination


(by Executive)Involuntary


Good Reason


Following a


Following aVoluntary











for Cause


(by Executive)


Change in


Change inExecutive Payments Upon

Termination


Retirement


Death


Disability


Termination


Termination


Control


ControlTermination

($)


($)


($)


($)


($)


($)


($)


($)Cash Severance






















429,000



429,000



429,000Acceleration of Unvested Equity
    AwardsStock Options










38,267



38,267











38,267



Restricted Stock










138,248



138,248











138,248



Retirement
    BenefitsSERP






























Health and Welfare
    coverage(2)






















14,000



14,000



14,000LTIP
    Units(3)






0
(4)


0
(5)


0
(5)






0
(6)


0
(7)


0
(7)Tax Gross Up






























Earned Vacation


47,008



47,008



47,008



47,008



55,797



55,797



55,797



55,797Outplacement benefits






















49,500



49,500



49,500     (1)
    
    In a Current Report on
    Form 8-K
    filed June 8, 2007, the Company announced that
    Mr. Riley resigned to accept a position as CFO with Ormet,
    an aluminum production company in his home state of Ohio. His
    resignation will be effective at the end of June 2007. Upon his
    resignation, Mr. Riley will forfeit all unvested stock
    options and restricted stock awards.(2)
    
    This figure represents the estimated cost of the continued
    medical benefits for one year under Mr. Rileys
    severance and retention agreement based on the current premium
    costs as well as an estimated reimbursement of $7,500 per year
    of out-of-pocket Exec-U-Care expenses (amounts not to be grossed
    up for taxes).(3)
    
    For each incentive bonus unit vested, the LTIP participant shall
    be entitled to receive the LTIP Payment (as defined above).(4)
    
    If Mr. Rileys employment were terminated by reason of
    his retirement (as defined in the LTIP) on February 2,
    2007, Mr. Riley  would have been entitled to an LTIP
    Payment of 100% of the amount, if any, that would have otherwise
    been payable to him pursuant to the LTIP, with such amount
    determined and paid as if he had not retired but had remained
    employed by the Company through each of the then remaining
    payment dates. The amount of cash, if any, that ultimately would
    have been received by Mr. Riley would not be known until
    the end of the measuring period (which, barring a change in
    control would be April 30 of 2007, 2008, 2009 and 2010).
    Assuming the stock price remained the same as the price on
    February 2, 2007, the total amount payable to
    Mr. Riley would have been $0.(5)
    
    If Mr. Rileys employment were terminated due to death
    or following a disability on February 2, 2007,
    Mr. Riley or his estate would have been entitled to an LTIP
    Payment of (1) 100% of the amount, if any, that would have
    otherwise been payable to him with respect to the Plan Year (as
    defined in the LTIP) in which the termination date occurred and
    (2) 50% of the amount, if any, that would have otherwise
    been payable to him with respect to the Plan Year immediately
    following the Plan Year in which the termination date occurred,
    in each case with such amounts determined and paid as if he had
    not died or become disabled but had remained employed by the
    Company through each of the then remaining payment dates. The
    amount of cash, if any, that ultimately would have been received
    by Mr. Riley would not be known until the end of the
    measuring period (which, barring a change in control would be
    April 30 of 2007, 2008, 2009 and 2010). Assuming the stock price
    remained the same as the price on February 2, 2007, the
    total amount payable to Mr. Riley would have been $0.(6)
    
    If Mr. Rileys employment were terminated by the
    Company without Cause (as defined in the LTIP) on
    February 2, 2007, Mr. Riley would have been entitled
    to an LTIP Payment of 100% of the amount, if any, that 135




---



##### Table of Contents



would have otherwise been payable to him with respect to the
    Plan Year (as defined in the LTIP) in which the termination date
    occurred, with such amounts determined and paid as if he had
    remained employed by the Company through the applicable
    remaining payment date. The amount of cash, if any, that
    ultimately would have been received by Mr. Riley would not
    be known until the end of the measuring period (which, barring a
    change in control would be April 30 of 2007, 2008, 2009 and
    2010). Assuming the stock price remained the same as the price
    on February 2, 2007, the total amount payable to
    Mr. Riley would have been $0.(7)
    
    If Mr. Rileys employment were terminated following a
    change in control of the Company (1) by reason of his
    death, disability or retirement or (2) by reason of a
    termination of employment by the Company without Cause or by
    Mr. Riley with Good Reason (Cause and Good Reason being
    defined in the LTIP), Mr. Riley would have been entitled to
    an immediate cash payment equal to the per share excess, if any,
    of the per share value of the consideration received by the
    Companys common stockholders in a change in control
    transaction as determined by the Committee in good faith and
    $20, multiplied by 100% of the aggregate number of incentive
    bonus units awarded to Mr. Riley and in respect of which
    Mr. Riley had not yet received payment. Assuming the per
    share transaction value of the consideration received by the
    Companys common stockholders following a change in control
    of the Company is the same as the stock price on
    February 2, 2007, the total amount payable to
    Mr. Riley would have been $0.  Dale
    Ward
  Involuntarynot forCause (by





InvoluntaryCompany)


Involuntary


Terminationor for


Termination


(By Executive)Involuntary


Good Reason


Following a


Following aVoluntary











for Cause


(by Executive)


Change in


Change inExecutive Payments Upon

Termination


Retirement


Death


Disability


Termination


Termination


Control


ControlTermination

($)


($)


($)


($)


($)


($)


($)


($)Cash Severance






















455,000



455,000



455,000Acceleration of Unvested Equity
    AwardsStock Options










42,844



42,844











42,844



Restricted Stock










187,117



187,117











187,117



Retirement
    BenefitsSERP






























Health and Welfare
    coverage(1)






















20,000



20,000



20,000LTIP
    Units(2)






0
(3)


0
(4)


0
(4)






0
(5)


0
(5)


0
(6)Tax Gross Up






























Earned Vacation


26,344



26,344



26,344



26,344



58,341



58,341



58,341



58,341Outplacement benefits






















52,500



52,500



52,500     (1)
    
    This figure represents the estimated cost of the continued
    medical benefits for one year under Mr. Wards
    severance and retention agreement based on the current premium
    costs as well as an estimated reimbursement of $7,500 per year
    of out-of-pocket Exec-U-Care expenses (amounts not to be grossed
    up for taxes).(2)
    
    For each incentive bonus unit vested, the LTIP participant shall
    be entitled to receive the LTIP Payment (as defined above).(3)
    
    If Mr. Wards employment is terminated by reason of
    his retirement (as defined in the LTIP) and the termination date
    occurs prior to the occurrence of a change in control of the
    Company, Mr. Ward will be entitled to an LTIP Payment of
    100% of the amount, if any, that would have otherwise been
    payable to him pursuant to the LTIP, with such amount determined
    and paid as if he had not retired but had remained employed by
    the Company through each of the then remaining payment dates.
    The amount of cash, if any, that will ultimately be received by
    Mr. Ward is not known until the end of the measuring period
    (which, barring a change in control would be April 30 of 2007,
    2008, 2009 and 2010). Assuming the stock price remains the same
    as the price on February 2, 2007, the total amount payable
    to Mr. Ward would be $0. 136




---



##### Table of Contents



(4)
    
    If Mr. Wards employment is terminated due to death or
    following a disability and the termination date occurs prior to
    the occurrence of a change in control of the Company,
    Mr. Ward or his estate will be entitled to an LTIP Payment
    of (1) 100% of the amount, if any, that would have
    otherwise been payable to him with respect to the Plan Year (as
    defined in the LTIP) in which the termination date occurs and
    (2) 50% of the amount, if any, that would have otherwise
    been payable to him with respect to the Plan Year immediately
    following the Plan Year in which the termination date occurs, in
    each case with such amounts determined and paid as if he had not
    died or become disabled but had remained employed by the Company
    through each of the then remaining payment dates. The amount of
    cash, if any, that will ultimately be received by Mr. Ward
    is not known until the end of the measuring period (which,
    barring a change in control would be April 30 of 2007, 2008,
    2009 and 2010). Assuming the stock price remains the same as the
    price on February 2, 2007, the total amount payable to
    Mr. Ward would be $0.(5)
    
    If Mr. Wards employment is terminated by the Company
    without Cause (as defined in the LTIP) after October 31,
    2006 and the termination date occurs prior to the occurrence of
    a change in control of the Company, Mr. Ward will be
    entitled to an LTIP Payment of 100% of the amount, if any, that
    would have otherwise been payable to him with respect to the
    Plan Year (as defined in the LTIP) in which the termination date
    occurs, with such amounts determined and paid as if he had
    remained employed by the Company through the applicable
    remaining payment date. The amount of cash, if any, that will
    ultimately be received by Mr. Ward is not known until the
    end of the measuring period (which, barring a change in control
    would be April 30 of 2007, 2008, 2009 and 2010). Assuming the
    stock price remains the same as the price on February 2,
    2007, the total amount payable to Mr. Ward would be $0.(6)
    
    If Mr. Wards employment is terminated following a
    change in control of the Company (1) by reason of his
    death, disability or retirement or (2) by reason of a
    termination of employment by the Company without Cause or by
    Mr. Ward with Good Reason (Cause and Good Reason being
    defined in the LTIP), Mr. Ward will be entitled to an
    immediate cash payment equal to the per share excess, if any, of
    the per share value of the consideration received by the
    Companys common stockholders in a change in control
    transaction as determined by the Committee in good faith and
    $20, multiplied by 100% of the aggregate number of incentive
    bonus units awarded to Mr. Ward and in respect of which
    Mr. Ward has not yet received payment. Assuming the per
    share transaction value of the consideration received by the
    Companys common stockholders following a change in control
    of the Company is the same as the stock price on
    February 2, 2007, the total amount payable to Mr. Ward
    would be $0.  Larry
    Buresh
  Involuntarynot forCause (by





InvoluntaryCompany)


Involuntary


Terminationor for


Termination


(by Executive)Involuntary


Good Reason


Following a


Following aVoluntary











for Cause


(by Executive)


Change in


Change inExecutive Payments Upon

Termination


Retirement


Death


Disability


Termination


Termination


Control


ControlTermination

($)


($)


($)


($)


($)


($)


($)


($)Cash Severance






















429,000



429,000



429,000Acceleration of Unvested Equity
    AwardsstStock Options










39,921



39,921











39,921



Restricted Stock










162,296



162,296











162,296



Retirement
    BenefitsSERP






























Health and Welfare
    coverage(1)






















20,000



20,000



20,000LTIP
    Units(2)






0
(3)


0
(4)


0
(4)






0
(5)


0
(5)


0
(6)Tax Gross Up






























Earned Vacation


40,479



40,479



40,479



40,479



48,640



48,640



48,640



48,640Outplacement benefits






















49,500



49,500



49,500  137




---



##### Table of Contents



(1)
    
    This figure represents the estimated cost of the continued
    medical benefits for one year under Mr. Bureshs
    severance and retention agreement based on the current premium
    costs as well as an estimated reimbursement of $7,500 per year
    of out-of-pocket Exec-U-Care expenses (amounts not to be grossed
    up for taxes).(2)
    
    For each incentive bonus unit vested, the LTIP participant shall
    be entitled to receive the LTIP Payment (as defined above).(3)
    
    If Mr. Bureshs employment is terminated by reason of
    his retirement (as defined in the LTIP) and the termination date
    occurs prior to the occurrence of a change in control of the
    Company, Mr. Buresh will be entitled to an LTIP Payment of
    100% of the amount, if any, that would have otherwise been
    payable to him pursuant to the LTIP, with such amount determined
    and paid as if he had not retired but had remained employed by
    the Company through each of the then remaining payment dates.
    The amount of cash, if any, that will ultimately be received by
    Mr. Buresh is not known until the end of the measuring
    period (which, barring a change in control would be April 30 of
    2007, 2008, 2009 and 2010). Assuming the stock price remains the
    same as the price on February 2, 2007, the total amount
    payable to Mr. Buresh would be $0.(4)
    
    If Mr. Bureshs employment is terminated due to death
    or following a disability and the termination date occurs prior
    to the occurrence of a change in control of the Company,
    Mr. Buresh or his estate will be entitled to an LTIP
    Payment of (1) 100% of the amount, if any, that would have
    otherwise been payable to him with respect to the Plan Year (as
    defined in the LTIP) in which the termination date occurs and
    (2) 50% of the amount, if any, that would have otherwise
    been payable to him with respect to the Plan Year immediately
    following the Plan Year in which the termination date occurs, in
    each case with such amounts determined and paid as if he had not
    died or become disabled but had remained employed by the Company
    through each of the then remaining payment dates. The amount of
    cash, if any, that will ultimately be received by
    Mr. Buresh is not known until the end of the measuring
    period (which, barring a change in control would be April 30 of
    2007, 2008, 2009 and 2010). Assuming the stock price remains the
    same as the price on February 2, 2007, the total amount
    payable to Mr. Buresh would be $0.(5)
    
    If Mr. Bureshs employment is terminated by the
    Company without Cause (as defined in the LTIP) after
    October 31, 2006 and the termination date occurs prior to
    the occurrence of a change in control of the Company,
    Mr. Buresh will be entitled to an LTIP Payment of 100% of
    the amount, if any, that would have otherwise been payable to
    him with respect to the Plan Year (as defined in the LTIP) in
    which the termination date occurs, with such amounts determined
    and paid as if he had remained employed by the Company through
    the applicable remaining payment date. The amount of cash, if
    any, that will ultimately be received by Mr. Buresh is not
    known until the end of the measuring period (which, barring a
    change in control would be April 30 of 2007, 2008, 2009 and
    2010). Assuming the stock price remains the same as the price on
    February 2, 2007, the total amount payable to
    Mr. Buresh would be $0.(6)
    
    If Mr. Bureshs employment is terminated following a
    change in control of the Company (1) by reason of his
    death, disability or retirement or (2) by reason of a
    termination of employment by the Company without Cause or by
    Mr. Buresh with Good Reason (Cause and Good Reason being
    defined in the LTIP), Mr. Buresh will be entitled to an
    immediate cash payment equal to the per share excess, if any, of
    the per share value of the consideration received by the
    Companys common stockholders in a change in control
    transaction as determined by the Committee in good faith and
    $20, multiplied by 100% of the aggregate number of incentive
    bonus units awarded to Mr. Buresh and in respect of which
    Mr. Buresh has not yet received payment. Assuming the per
    share transaction value of the consideration received by the
    Companys common stockholders following a change in control
    of the Company is  the same as the stock price on
    February 2, 2007, the total amount payable to
    Mr. Buresh would be $0. 138




---



##### Table of Contents



Larry
    Ellis
  Involuntarynot forCause (by





InvoluntaryCompany)


Involuntary


Terminationor for


Termination


(by Executive)Involuntary


Good Reason


Following a


Following aVoluntary











for Cause


(by Executive)


Change in


Change inExecutive Payments Upon

Termination


Retirement


Death


Disability


Termination


Termination


Control


ControlTermination

($)


($)


($)


($)


($)


($)


($)


($)Cash Severance






















325,000



325,000



325,000Acceleration of Unvested Equity
    AwardsStock Options










29,761



29,761











29,761



Restricted Stock










122,183



122,183











122,183



Retirement
    BenefitsSERP






























Health and Welfare
    coverage(1)






















14,000



14,000



14,000LTIP
    Units(2)






0
(3)


0
(4)


0
(4)






0
(5)


0
(5)


0
(6)Tax Gross Up






























Earned Vacation


29,712



29,712



29,712



29,712



42,567



42,567



42,567



42,567Outplacement benefits






















37,500



37,500



37,500     (1)
    
    This figure represents the estimated cost of the continued
    medical benefits for one year under Mr. Ellis
    severance and retention agreement based on the current premium
    costs as well as an estimated reimbursement of $7,500 per year
    of out-of-pocket Exec-U-Care expenses (amounts not to be grossed
    up for taxes).(2)
    
    For each incentive bonus unit vested, the LTIP participant shall
    be entitled to receive the LTIP Payment (as defined above).(3)
    
    If Mr. Ellis employment is terminated by reason of
    his retirement (as defined in the LTIP) and the termination date
    occurs prior to the occurrence of a change in control of the
    Company, Mr. Ellis will be entitled to an LTIP Payment of
    100% of the amount, if any, that would have otherwise been
    payable to him pursuant to the LTIP, with such amount determined
    and paid as if he had not retired but had remained employed by
    the Company through each of the then remaining payment dates.
    The amount of cash, if any, that will ultimately be received by
    Mr. Ellis is not known until the end of the measuring
    period (which, barring a change in control would be April 30 of
    2007, 2008, 2009 and 2010). Assuming the stock price remains the
    same as the price on February 2, 2007, the total amount
    payable to Mr. Ellis would be $0.(4)
    
    If Mr. Ellis employment is terminated due to death or
    following a disability and the termination date occurs prior to
    the occurrence of a change in control of the Company,
    Mr. Ellis or his estate will be entitled to an LTIP Payment
    of (1) 100% of the amount, if any, that would have
    otherwise been payable to him with respect to the Plan Year (as
    defined in the LTIP) in which the termination date occurs and
    (2) 50% of the amount, if any, that would have otherwise
    been payable to him with respect to the Plan Year immediately
    following the Plan Year in which the termination date occurs, in
    each case with such amounts determined and paid as if he had not
    died or become disabled but had remained employed by the Company
    through each of the then remaining payment dates. The amount of
    cash, if any, that will ultimately be received by Mr. Ellis
    is not known until the end of the measuring period (which,
    barring a change in control would be April 30 of 2007, 2008,
    2009 and 2010). Assuming the stock price remains the same as the
    price on February 2, 2007, the total amount payable to
    Mr. Ellis would be $0.(5)
    
    If Mr. Ellis employment is terminated by the Company
    without Cause (as defined in the LTIP) after October 31,
    2006 and the termination date occurs prior to the occurrence of
    a change in control of the Company, Mr. Ellis will be
    entitled to an LTIP Payment of 100% of the amount, if any, that
    would have otherwise been payable to him with respect to the
    Plan Year (as defined in the LTIP) in which the termination date
    occurs, with such amounts determined and paid as if he had
    remained employed by the Company through the applicable
    remaining payment date. The amount of cash, if any, that will
    ultimately be received by Mr. Ellis is not known 139




---



##### Table of Contents



until the end of the measuring period (which, barring a change
    in control would be April 30 of 2007, 2008, 2009 and 2010).
    Assuming the stock price remains the same as the price on
    February 2, 2007, the total amount payable to
    Mr. Ellis would be $0.(6)
    
    If Mr. Ellis employment is terminated following a
    change in control of the Company (1) by reason of his
    death, disability or retirement or (2) by reason of a
    termination of employment by the Company without Cause or by
    Mr. Ellis with Good Reason (Cause and Good Reason being
    defined in the LTIP), Mr. Ellis will be entitled to an
    immediate cash payment equal to the per share excess, if any, of
    the per share value of the consideration received by the
    Companys common stockholders in a change in control
    transaction as determined by the Committee in good faith and
    $20, multiplied by 100% of the aggregate number of incentive
    bonus units awarded to Mr. Ellis and in respect of which
    Mr. Ellis has not yet received payment. Assuming the per
    share transaction value of the consideration received by the
    Companys common stockholders following a change in control
    of the Company is the same as the stock price on
    February 2, 2007, the total amount payable to
    Mr. Ellis would be $0.      Compensation
    of Directors
  Outside
    Director Compensation Policy
   140




---



##### Table of Contents



2006
    Non-Employee Director Compensation Table
    Change inPensionValue andFees











NonqualifiedEarned or








Non-Equity


DeferredPaid in


Stock


Option


Incentive Plan


Compensation


All OtherCash


Awards


Awards


Compensation


Earnings


Compensation


TotalName

($)(1)


($)


($)(2)


($)


($)


($)


($)James G. Bazlen(3)


14,000







57,200











51,200



122,400Morton Godlas


76,000







57,200















133,200Terilyn A. Henderson


78,000







57,200















135,200Charles K. Marquis(4)(5)


196,500







57,200















253,700Charles J. Philippin(5)(6)


195,000







57,200















252,200William A. Shutzer(7)


74,000







57,200















131,200     (1)
    
    Pursuant to our Outside Director Compensation Policy outlined
    above, Non-Employee Directors are also eligible for
    reimbursement of reasonable expenses (e.g., travel expenses)
    incurred in connection with attendance at Board and/or Committee
    meetings. Expense amounts reimbursed are not included in the
    table above.(2)
    
    The amounts included in the Option Awards column are
    the amounts of compensation cost recognized by the Company in
    fiscal 2006 related to stock option awards that have not yet
    vested, in accordance with FAS 123(R). Non-management
    director stock option grants become fully vested on the first
    anniversary of the grant date and expire seven years from the
    grant date.All option awards shown are based on the average of the high and
    low prices of the Companys common stock on the date of
    grant. For a discussion of valuation assumptions, see
    Note 2 to the Companys Consolidated Financial
    Statements above. The grant date fair value of the stock options
    underlying the expense shown in this column is as follows (for
    each director): (1) $50,455 for the 10,000 options granted
    October 18, 2005 and (2) $63,522 for the 10,000
    options granted November 30, 2006.(3)
    
    As discussed in Item 13 below under the caption
    Certain Relationships and Related Transactions,Mr. Bazlen, formerly our President and Chief Operating
    Officer and currently a member of our Board of Directors, has an
    employment agreement with the Company that provides for payment
    of all compensation and reimbursement of expenses provided to
    outside directors under the Outside Director Compensation Policy
    except for the Annual Stipend, as well as payment of an annual
    base salary (equal to the Annual Stipend) and certain benefits.
    Amounts included in the All Other Compensation
    column for Mr. Bazlen include his annual base salary as
    well as Company matching contributions to his 401(k) Plan.(4)
    
    Mr. Marquis is Chair for both the Compensation Committee
    and the Nominating and Corporate Governance Committee.(5)
    
    In addition to the standard director fees payable under our
    Outside Director Compensation Policy, in July 2006, in
    connection with the Audit Committee-led accounting investigation
    discussed above, the three disinterested members of the Board of
    Directors (as respects such investigation and excluding
    Messrs. Philippin and Marquis) authorized the payment to
    each of Messrs. Philippin and Marquis (comprising the
    Special Investigation Committee of the Audit Committee of the
    Board of Directors) for their services during fiscal 2006 of an
    additional stipend of $50,000, plus $50,000 in meeting fees,
    based on the approximate number of telephonic and in-person
    meetings in which they participated and our standard director
    meeting fees of $1,500 and $500 for in-person and telephonic
    meetings, respectively.(6)
    
    Mr. Philippin is the Chair for the Audit Committee.(7)
    
    The Company entered into an agreement in June 2006 with Evercore
    Financial Advisors L.L.C. (Evercore) for certain
    financial advisory services in connection with our financial
    restructuring in fiscal year 2006 described in our Annual
    Report. Pursuant to the agreement, the Company paid
    approximately $0.6 million to 141




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##### Table of Contents



Evercore during fiscal 2006. In Mr. Shutzer, a member of
    our Board of Directors, is a Senior Managing Director of
    Evercore.  Directors
    Outstanding Equity Awards at 2006 Fiscal-Year End
    OutstandingStockOptionsName

(#)(1)James Bazlen(2)


106,500Morton Godlas


30,000Terilyn Henderson


30,000Charles Marquis


30,000Charles Philippin


30,000William Shutzer


30,000     (1)
    
    For each director, all options are fully vested and exercisable
    with the exception of 10,000 options awarded to each director
    during fiscal 2006. Those options will become fully vested and
    exercisable on November 30, 2007.(2)
    
    Outstanding stock options for Mr. Bazlen comprise 76,500
    options awarded to him while he was the President and Chief
    Operating Officer of the Company and 30,000 options awarded to
    him since 2004 as a member of our Board of Directors, after his
    retirement as President and COO.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   142




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##### Table of Contents



Number of


Total VotingName

Shares


Power (%)*OppenheimerFunds, Inc.(1)


5,596,820



12.61Karsch Capital Management LP(2)


4,096,830



9.40GLG Partners LP(3)


3,891,447



8.88Blue Harbour Group(4)


3,350,300



7.65Viking Global Performance LLC(5)


2,219,700



5.10James Bazlen(6)(7)


358,357



**Morton Godlas(7)(8)


28,521



**Terilyn A. Henderson(7)


21,012



**Charles K. Marquis(7)


70,000



**Charles J. Philippin(7)


35,601



**William A. Shutzer(7)(9)


33,671



**Maynard Jenkins(7)(10)


743,524



1.69Larry Buresh(7)(11)


155,617



**Larry Ellis(7)(11)(12)


59,800



**James B. Riley(7)(11)


33,173



**Dale Ward(7)(11)


85,921



**Martin Fraser(7)(13)


164,249



**Don Watson(7)(14)


110,353



**All directors and executive
    officers as a group (13 persons)(6)-(12)


1,694,274



3.85     *
    
    As of the Ownership Date, 43,950,751 shares of common stock
    were issued and outstanding.**
    
    Less than 1%.(1)
    
    OppenheimerFunds, Inc. (OFI) is an investment
    adviser and manager of Oppenheimer Capital Income Fund
    (OCIF), a registered investment company. OFI has
    beneficial ownership of 5,596,820 shares and OCIF has
    beneficial ownership of 5,417,320 shares. OFI has shared
    voting and dispositive power with respect to
    5,596,820 shares and OCIF has shared voting and dispositive
    power with respect to 5,417,320 shares. The address for OFI
    is Two World Financial Center, 225 Liberty Street, 11th Floor,
    New York, New York
    10281-1008.
    The address for OCIF is 6803 S. Tucson Way,
    Centennial, Colorado 80112. The information with respect to OFI
    and OCIF is as of December 29, 2006, and was obtained from
    the Schedule 13G/A filed with the SEC on their behalf on
    February 6, 2007.(2)
    
    Karsch Management GP, LLC (Karsch GP) is the general
    partner of Karsch Capital Management, LP, an investment adviser.
    (Karsch Management) Michael A. Karsch is the
    managing member of Karsch GP. Each of Karsch GP, Karsch
    Management and Michael A. Karsch has shared voting power and
    shared dispositive power with respect to all 4,096,830 of such
    shares. The business address of each of the reporting entities
    is 110 East 59th Street, 22nd Floor, New York, NY 10022. The
    information with respect to Karsch GP, Karsch Management and
    Michael A. Karsch is as of February 20, 2007 and was
    obtained from the Schedule 13D/A filed with the SEC on
    their behalf on February 21, 2007.(3)
    
    GLG Partners Limited (the General Partner) is the
    general partner of GLG Partners LP. Each of Noam Gottesman,
    Pierre Lagrange, and Emmanuel Roman is a managing director of
    the General Partner (the Managing Directors). Each
    of GLG Partners LP, the General Partner, and the Managing
    Directors has shared voting and dispositive power with respect
    to all 3,891,447 of such shares. The business address of each of
    the reporting entities is
    c/o GLG
    Partners LP, 1 Curzon Street, London W1J BHB, United Kingdom.
    The information with respect to the General Partner, GLG
    Partners LP and the Managing Directors is as of
    December 31, 2006 and was obtained from the
    Schedule 13G/A filed with the SEC on their behalf on
    February 14, 2007. 143




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##### Table of Contents



(4)
    
    Blue Harbour Group, LP (Blue Harbor) provides
    investment advisory and investment management services to Blue
    Harbour Strategic Value Partners Master Fund, LP, which
    beneficially owns and has shared voting and dispositive power
    with respect to 2,788,150 shares, and Blue Harbor
    Institutional Partners Master Fund, L.P., which beneficially
    owns and has shared voting and dispositive power with respect to
    562,150 shares (collectively, the Funds), and,
    among other things, exercises all voting and other powers and
    privileges attributable to any securities held for the
    Funds account. Blue Harbour GP, LLC is a general partner
    of the Funds. Blue Harbour Holdings, LLC is a general partner of
    Blue Harbour (each of Blue Harbor GP, LLC, Blue Harbor Holdings,
    LLC and Blue Harbor are collectively referred to as the
    Blue Harbor Entities). Clifton S. Robbins is Chief
    Executive Officer of Blue Harbour. All of the securities held by
    the Funds are deemed beneficially owned by the Blue Harbor
    Entities and Mr. Robbins and each of the Blue Harbour
    Entities and Mr. Robbins has shared voting and dispositive
    power with respect to all 3,350,300 of such shares. The address
    of each of the Funds, the Blue Harbour Entities and
    Mr. Robbins is 240 Greenwich Avenue, Third Floor,
    Greenwich, Connecticut, 06830. The foregoing information is as
    of July 13, 2006 and was obtained from the Schedule 13D
    filed with the SEC on behalf of the Blue Harbor Entities on
    July 17, 2006.(5)
    
    Viking Global Performance LLC (VGP) is the general
    partner of Viking Global Equities LP (VGE). Viking
    Global Investors LP (VGI) is an affiliate of VGP
    that provides managerial services to VGE. VGE beneficially owns
    and has shared voting and dispositive power with respect to
    917,600 shares. VGP and VGI may be deemed to beneficially
    own all shares owned by VGE. O. Andreas Halvorsen and David C.
    Ott are Managing Directors of VGI and Members of VGP (the
    Managing Directors). Each of VGP, CGI and the
    Managing Directors has shared voting and dispositive power with
    respect to all 2,219,700 shares. The business address for
    each of the reporting entities is 55 Railroad Avenue, Greenwich,
    CT 06830. The foregoing information is as of December 31,
    2006 and was obtained from the Schedule 13G/A filed with
    the SEC on their behalf on February 14, 2007.(6)
    
    Includes 259,857 shares of common stock held by a revocable
    family trust and 2,000 shares of common stock owned by
    Mr. Bazlens children.(7)
    
    Includes the following shares of our common stock that the
    following individuals have the right to acquire within
    60 days after June 1, 2007, through the exercise of
    options: James Bazlen (96,500); Morton Godlas (20,000); Terilyn
    A. Henderson (20,000); Charles K. Marquis (20,000); Charles J.
    Philippin (20,000); William A. Shutzer (20,000); Maynard Jenkins
    (719,924); Larry Buresh (117,882); Larry Ellis (47,397); James
    B. Riley (13,333); Dale Ward (69,240); Martin Fraser (131,198);
    Don Watson (90,629); (and all directors and executive officers
    as a group (1,215,642).(8)
    
    Consists of 8,521 shares of common stock held in a
    revocable family trust.(9)
    
    Includes 2,000 shares of common stock held by a Defined
    Benefit Plan.(10)
    
    Includes 23,600 shares of common stock held in revocable
    family trusts.(11)
    
    Includes shares of restricted stock awarded to our executive
    officers, net of a portion of the restricted stock that has
    already vested as well as shares that were surrendered back to
    the Company to satisfy tax obligations arising from these
    vestings (total net shares as of June 1, 2007 are shown in
    parentheses after each named individual): Dale Ward (11,368),
    Larry Buresh (9,860), Larry Ellis (7,423), James Riley (8,399)
    and all executive officers as a group (48,408). Such shares vest
    as to
    331/3%
    on each of the first, second and third year anniversaries of the
    grant date and confer the holders with the entire beneficial
    ownership interest in, and all rights and privileges of a
    stockholder as to, such restricted shares, including voting
    rights.(12)
    
    Consists of 4,980 shares of common stock held in a
    revocable family trust.(13)
    
    As discussed above in Item 1, Business, as of
    September 2006, Mr. Fraser was no longer employed by the
    Company. The number of shares owned by Mr. Fraser is as of
    September 27, 2006.(14)
    
    As discussed above in Item 1, Business, as of
    September 2006, Mr. Watson was no longer employed by the
    Company. The number of shares owned by Mr. Watson is as of
    September 27, 2006. 144




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##### Table of Contents



Equity
    Compensation Plan Information
  Number of Securities





Number of Securitiesto be Issued Upon


Weighted-average


Remaining Available forExercise of


Exercise Price of


Future Issuance underOutstanding Options,


Outstanding Options,


Equity CompensationPlan Category

Warrants and Rights


Warrants and Rights


Plans(1)Equity compensation plans approved
    by security holders


2,136,692


$
14.92



1,560,765Equity compensation plans not
    approved by security holders(2)


216,635


$
11.00



Total


2,353,327


$
13.54



1,560,765     (1)
    
    Excludes the securities to be issued upon exercise of
    outstanding options, warrants and rights. Availability for
    future issuance under our 2004 Stock Plan has been reduced based
    on previously issued restricted stock awards weighted as set
    forth in such plan.(2)
    
    Consists of stock options awarded to our Chief Executive
    Officer, Mr. Jenkins, under the terms of his employment
    agreement approved by the Board of Directors effective
    concurrent with the Companys initial public offering in
    1998.  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence  Regulation S-K.
    and/or
 145




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##### Table of Contents



Rule 10A-3.
    Item 14.
    Principal
    Accountant Fees and Services  Audit
    Committee Pre-Approval Policies
  Rule 2-01 Regulation S-X, Rule 2-01 Regulation S-X.
    2006


2005Audit Fees(1)

$
1,614,160


$
5,750,975Audit-Related Fees(2)


14,057



134,513Tax Fees(3)


776,821



328,059All Other Fees(4)






$
2,405,038


$
6,213,547     (1)
    
    The audit fees for fiscal 2006 and 2005, respectively, were for
    professional services rendered for the fiscal 2006 integrated
    audit (including services pertaining to SOX 404) and fiscal
    2005 audit (including services pertaining to SOX 404) of
    the consolidated financial statements of the Company, the
    issuance of consents and comfort letters in connection with
    Company financings, the review of additional documents filed
    with the SEC and consultations with respect to the application
    and adoption of new accounting pronouncements. The audit fees
    for fiscal 2006 were substantially lower than fiscal 2005 due to
    the complexity of the matters addressed in the restatement of
    our previously reported consolidated financial statements and
    the length of time it took to complete the Audit Committee-led
    investigation, restatement and evaluation of the Companys
    internal control over financial reporting. The audit fees for
    fiscal 2005 include amounts billed through April 15, 2007
    related to 146




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##### Table of Contents



the restatement and completion of our Annual Report on
    Form 10-K
    for fiscal 2005, which was filed on May 1, 2007. The audit
    fees for fiscal 2006 include amounts billed through
    June 15, 2007 and include $364,160 billed after May 1,
    2007 related to the finalization of our
    Form 10-K
    for fiscal 2005.(2)
    
    The audit-related fees for fiscal 2006 were primarily for
    professional services rendered relating to a review of a
    response to a SEC staff comment letter. The audit-related fees
    for fiscal 2005 were for professional services rendered relative
    to the Companys acquisition of Murrays Inc. and for
    audit services relative to certain of the Companys
    employee benefit plans.(3)
    
    Tax fees for fiscal 2006 and 2005, respectively, were for
    services related to tax compliance (including reviewing tax
    returns) and tax advice. For fiscal 2006, fees for tax
    compliance totaled $175,744 and fees for tax advice totaled
    $601,077. For fiscal 2005, fees for tax compliance totaled
    $88,800 and fees for tax advice totaled $239,259.(4)
    
    There were no fees billed to the Company during fiscal 2006 or
    2005 for services other than those described above.    PART IV  Item 15.
    Exhibit
    and Financial Statement Schedules              Form 10-K,
     147




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##### Table of Contents



Schedule I
  CSK AUTO CORPORATION
 (Parent Company Only)
  BALANCE SHEETS
  February 4,


January 29,2007


2006(In thousands,except share data)ASSETSInvestment in subsidiaries

$
171,510


$
156,157Total assets

$
171,510


$
156,157LIABILITIES AND
    STOCKHOLDERS EQUITYStockholders equity:Common stock, $0.01 par
    value, 90,000,000 shares authorized, 43,950,751 and
    43,830,322 shares issued and outstanding at
    February 4, 2007 and January 29, 2006, respectively

$
440


$
438Deferred compensation






(1,735
)Additional paid-in capital


433,912



426,560Accumulated deficit


(262,842
)


(269,106
)Total stockholders equity


171,510



156,157Total liabilities and
    stockholders equity

$
171,510


$
156,157    148




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##### Table of Contents



Schedule I
  CSK AUTO CORPORATION
 (Parent Company Only)
  STATEMENTS OF OPERATIONS
  Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005($ in thousands, except share and per share data)Equity interest in income from
    subsidiaries

$
6,264


$
57,790


$
59,562Income before income taxes and
    cumulative effect of change in accounting principle


12,221



95,038



99,012Income tax expense


4,991



37,248



39,450Income before cumulative effect of
    change in accounting principle


7,230



57,790



59,562Cumulative effect of change in
    accounting principle, net of tax


966







Net income

$
6,264


$
57,790


$
59,562Basic earnings per share:Income before cumulative effect of
    change in accounting principle

$
0.16


$
1.30


$
1.30Cumulative effect of change in
    accounting principle


0.02







Net income per share

$
0.14


$
1.30


$
1.30Shares used in computing per share
    amounts


43,876,533



44,465,409



45,713,271Diluted earnings per share:Income before cumulative effect of
    change in accounting principle

$
0.16


$
1.29


$
1.29Cumulative effect of change in
    accounting principle


0.02







Net income per share

$
0.14


$
1.29


$
1.29Shares used in computing per share
    amounts


44,129,278



44,812,302



46,002,376    149




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##### Table of Contents



Schedule I
  CSK AUTO CORPORATION
 (Parent Company Only)
  STATEMENTS OF STOCKHOLDERS EQUITY
  Common Stock


Additional Paid-


Stockholder


Deferred


AccumulatedShares


Amount


in Capital


Receivable


Compensation


Deficit


Total Equity(In thousands, except share data)Balances at February 1,
    2004


46,497,936


$
465


$
467,563


$
(73
)

$



$
(386,458
)

$
81,497Repurchase and retirement of common
    stock


(1,574,956
)


(16
)


(23,710
)














(23,726
)Restricted stock


4,463







1,209







(1,164
)






45Amortization of deferred
    compensation


















146







146Recovery of stockholder receivable














63











63Exercise of options


188,858



2



2,072















2,074Tax benefit relating to stock
    option exercises










390















390Compensation expense, stock options










88















88Net income






















59,562



59,562Balances at January 30,
    2005


45,116,301



451



447,612



(10
)


(1,018
)


(326,896
)


120,139Repurchase and retirement of common
    stock


(1,409,300
)


(14
)


(25,015
)














(25,029
)Restricted stock


17,731







1,159







(1,288
)






(129
)Amortization of deferred
    compensation


















571







571Recovery of stockholder receivable














10











10Exercise of options


105,590



1



1,129















1,130Tax benefit relating to stock
    option exercises










231















231Compensation expense, stock options










7















7Warrants and call options, net of
    tax










1,437















1,437Net income






















57,790



57,790Balances at January 29,
    2006


43,830,322



438



426,560







(1,735
)


(269,106
)


156,157Restricted stock


28,466



1



(221
)














(220
)Adoption of SFAS No. 123R










(1,735
)






1,735







Exercise of options


91,963



1



1,195















1,196Compensation expense, stock-based
    awards










3,048















3,048Warrants and call options, net of
    tax










390















390Discount on senior exchangeable
    notes, net of tax










4,675















4,675Net income






















6,264



6,264Balances at February 4,
    2007


43,950,751


$
440


$
433,912


$



$



$
(262,842
)

$
171,510    150




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##### Table of Contents



Schedule I
  CSK AUTO CORPORATION
 (Parent Company Only)
  STATEMENTS OF CASH FLOWS
  Fiscal Year EndedFebruary 4,


January 29,


January 30,2007


2006


2005($ in thousands)Cash flows provided by operating
    activities:Net income

$
6,264


$
57,790


$
59,562Adjustments to reconcile net
    income to net cash provided by operating activities:Equity interest in net income from
    subsidiaries


(6,264
)


(57,790
)


(59,562
)Net cash provided by operating
    activities










Net increase in cash and cash
    equivalents










Cash and cash equivalents,
    beginning of period










Cash and cash equivalents, end of
    period

$



$



$
    151




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##### Table of Contents



Schedule I
  CSK AUTO CORPORATION
 (Parent Company Only)
  NOTE TO FINANCIAL STATEMENT SCHEDULE
     152




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##### Table of Contents



CSK AUTO
    CORPORATION AND SUBSIDIARIES
  SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
 For the Fiscal Years 2006, 2005, and 2004
   Balance at


Charged to


Purchase





Balance atBeginning of


Costs and


Accounting





End ofPeriod


Expenses


Adjustments


Deductions


Period($ in thousands)Allowance for Bad
    Debts:Year Ended January 30, 2005

$
1,526



6,579







(7,536
)

$
569Year Ended January 29, 2006

$
569



2,674



49



(2,856
)

$
436Year Ended February 4, 2007

$
436



105







(148
)

$
393Allowance for Closed
    Stores:Year Ended January 30, 2005

$
12,001



2,229







(6,456
)

$
7,774Year Ended January 29, 2006

$
7,774



2,903



324



(3,968
)

$
7,033Year Ended February 4, 2007

$
7,033



1,487







(3,609
)

$
4,911Allowance for Inventory
    Shrink:Year Ended January 30, 2005

$
19,624



20,840







(27,385
)

$
13,079Year Ended January 29, 2006

$
13,079



28,780



658



(30,029
)

$
12,488Year Ended February 4, 2007

$
12,488



31,605







(25,977
)

$
18,116Allowance for Inventory
    Obsolescence:Year Ended January 30, 2005

$




1,469










$
1,469Year Ended January 29, 2006

$
1,469



(462
)


1,127



(50
)

$
2,084Year Ended February 4, 2007

$
2,084











(1,326
)

$
758Allowance for Deferred Tax
    Asset:Year Ended January 30, 2005

$
1,752














$
1,752Year Ended January 29, 2006

$
1,752














$
1,752Year Ended February 4, 2007

$
1,752














$
1,752  153




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##### Table of Contents



SIGNATURES
      By:
    /s/  MAYNARD
    L. JENKINS, JR.  Chairman and Chief Executive Officer
   POWER OF
    ATTORNEY
  Form 10-K
    /s/  MAYNARD
    L. JENKINS JR.Maynard
    L. Jenkins Jr.

Chairman of the Board and
    Chief Executive Officer
    (Principal Executive Officer)/s/  JAMES
    G. BAZLENJames
    G. Bazlen

Director/s/  MORTON
    GODLASMorton
    Godlas

Director/s/  TERILYN
    A. HENDERSONTerilyn
    A. Henderson

Director/s/  CHARLES
    K. MARQUISCharles
    K. Marquis

Director/s/  CHARLES
    J. PHILIPPINCharles
    J. Philippin

Director 154




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##### Table of Contents



/s/  WILLIAM
    A. SHUTZERWilliam
    A. Shutzer

Director/s/  STEVEN
    L. KORBYSteven
    L. Korby

Senior Vice President and
    Interim Chief Financial Officer
    (Principal Financial Officer and
    Principal Accounting Officer)  155




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##### Table of Contents



Exhibit Index
  ExhibitNumber

Description of Exhibits2
.01

Agreement and Plan of Merger,
    dated as of November 30, 2005, among CSK Auto Corporation,
    Fastlane Merger Corp., Murrays, Inc., the sellers named
    therein, and J.W. Childs Associates, L.P., as seller
    representative, incorporated herein by reference to Exhibit 2.1
    of our Current Report on Form 8-K, filed on December 1, 2005.
    (File No. 001-13927).3
.01

Restated Certificate of
    Incorporation of the Company, incorporated herein by reference
    to Exhibit 3.01 of our Annual Report on Form 10-K, filed on May
    4, 1998 (File No. 001-13927).3
.02

Certificate of Correction to the
    Restated Certificate of Incorporation of the Company,
    incorporated herein by reference to Exhibit 3.02 of our Annual
    Report on Form 10-K, filed on May 4, 1998
    (File No. 001-13927).3
.03

Certificate of Amendment to the
    Restated Certificate of Incorporation of CSK Auto Corporation,
    incorporated herein by reference to Exhibit 3.2.1 of our
    Quarterly Report on Form 10-Q, filed on September 18, 2002 (File
    No. 001-13927).3
.04

Second Certificate of Amendment of
    the Restated Certificate of Incorporation of CSK Auto
    Corporation, incorporated herein by reference to Exhibit 3.04 of
    our Quarterly Report on
    Form 10-Q,
    filed on December 9, 2005 (File No. 001-13927).3
.05

Amended and Restated By-laws of
    the Company, incorporated herein by reference to Exhibit 3.03 of
    our Annual Report on Form 10-K, filed on April 28, 1999 (File
    No. 001-13927).3
.05.1

First Amendment to Amended and
    Restated By-laws of the Company, incorporated herein by
    reference to Exhibit 3.03.1 of our annual report on Form 10-K,
    filed on May 1, 2001. (File No 001-13927).3
.05.2

Second Amendment to Amended and
    Restated By-laws of the Company, incorporated herein by
    reference to Exhibit 3.03.2 of our Quarterly Report on Form
    10-Q, filed on June 14, 2004
    (File No. 001-13927).4
.01

Form of Common Stock certificate,
    incorporated herein by reference to Exhibit 4.05 of our
    Registration Statement on Form S-1/A, filed on March 3, 1998
    (File No. 333-43211).4
.02

Indenture, dated January 16, 2004,
    by and among CSK Auto, Inc., CSK Auto Corporation, Automotive
    Information Systems, Inc. and CSKAUTO.COM, Inc. as guarantors,
    and the Bank of New York, as Trustee, incorporated herein by
    reference to Exhibit 99.3 of our Current Report on Form 8-K,
    filed on January 20, 2004 (File No. 001-13927).4
.03

Indenture, dated as of July 29,
    2005, among CSK Auto, Inc., CSK Auto Corporation, CSKAUTO.COM,
    Inc. and the Bank of New York Trust Company, N.A., as Trustee
    (including form of note), incorporated herein by reference to
    Exhibit 4.1 of our Current Report on Form 8-K, filed on July 29,
    2005 (File No. 001-13927).4
.04

Indenture, dated as of December
    19, 2005, among CSK Auto, Inc., CSK Auto Corporation,
    CSKAUTO.COM, Inc. as guarantors, and the Bank of New York Trust
    Company, N.A., as Trustee, incorporated herein by reference to
    Exhibit 4.1 of our Current Report on Form 8-K, filed on December
    20, 2005 (File No. 001-13927).4
.05

Third Supplemental Indenture,
    dated as of June 30, 2006, among CSK Auto, Inc., CSK Auto
    Corporation, CSKAUTO.COM, Inc., and The Bank of New York Trust
    Company, N.A., as Trustee, incorporated herein by reference to
    Exhibit 4.1 of our Current Report on Form 8-K, filed on July 7,
    2006 (File No. 001-13927).4
.06

Second Supplemental Indenture,
    dated as of July 27, 2006, among CSK Auto, Inc., CSK Auto
    Corporation, CSKAUTO.COM, Inc., and The Bank of New York Trust
    Company, N.A., as Trustee, incorporated herein by reference to
    Exhibit 4.1 of our Current Report on Form 8-K, filed on July 31,
    2006 (File No. 001-13927).10
.01

Amended and Restated Employment
    Agreement, dated as of June 12, 1998, between CSK Auto, Inc. and
    Maynard Jenkins, incorporated herein by reference to Exhibit
    10.02 of our Quarterly Report on
    Form 10-Q,
    filed on September 11, 1998 (File No. 001-13927). 156




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##### Table of Contents



ExhibitNumber

Description of Exhibits10
.01.1

Amendment to Employment Agreement,
    dated as of September 24, 1999, between CSK Auto, Inc. and
    Maynard Jenkins, incorporated herein by reference to Exhibit
    10.03.1 of our Annual Report on
    Form 10-K,
    filed on April 28, 2000 (File No. 001-13927).10
.01.2

Form of Amendment to Employment
    Agreement, by and between CSK Auto, Inc. and Maynard Jenkins,
    incorporated herein by reference to Exhibit 10.2 of our Current
    Report on Form 8-K, filed on March 3, 2006 (File No.
    001-13927).10
.01.3

Form of Amendment to Employment
    Agreement, by and between CSK Auto, Inc. and Maynard Jenkins,
    incorporated herein by reference to Exhibit 10.1 of our Current
    Report on Form 8-K, filed on April 18, 2007 (File No.
    001-13927).10
.02

Stock Option Agreement, dated
    March 9, 1998, between the Company and Maynard Jenkins,
    incorporated herein by reference to Exhibit 10.26 of our
    Registration Statement on Form S-1/A, filed on March 10, 1998
    (File No. 333-43211).10
.03

Restated 1996 Associate Stock
    Option Plan, dated as of June 5, 1998, incorporated herein by
    reference to Exhibit 10.11 of our Registration Statement on Form
    S-1, filed on November 13, 1998
    (File No. 333-67231).10
.04

Amended and Restated Supplemental
    Executive Retirement Plan Agreement, effective January 1, 2005,
    between CSK Auto, Inc. and Maynard Jenkins, incorporated herein
    by reference to Exhibit 10.1 of our Current Report on Form 8-K,
    filed on December 21, 2004 (File No. 001-13927).10
.04.1

Form of First Amendment to Amended
    and Restated Supplemental Executive Retirement Plan Agreement,
    dated as of January 1, 2005, between CSK Auto, Inc. and Maynard
    Jenkins, incorporated herein by reference to Exhibit 10.1 of our
    Current Report on Form 8-K, filed on March 3, 2006 (File No.
    001-13927).10
.05

Restated 1996 Executive Stock
    Option Plan (Amended and Restated June 8, 1999), incorporated
    herein by reference to Appendix B of our definitive Proxy
    Statement, filed on May 11, 1999
    (File No. 001-13927).10
.06

1999 Employee Stock Option Plan,
    incorporated by reference to Appendix C of our definitive
    Proxy Statement, filed on May 11, 1999 (File No.
    001-13927).10
.07

2004 Stock and Incentive Plan (as
    amended and restated effective as of January 1, 2005),
    incorporated herein by reference to Exhibit 10.7 of our Current
    Report on Form 8-K, filed on September 26, 2005 (File No.
    001-13927).10
.08

Form of Restricted Stock Agreement
    pursuant to the CSK Auto Corporation Directors Stock Plan,
    incorporated herein by reference to Exhibit 10.14 of our Annual
    Report on Form 10-K, filed on April 28, 2000 (File No.
    001-13927).10
.09

CSK Auto Corporation 2000 Senior
    Executive Stock Loan Plan, incorporated herein by reference to
    Exhibit 10.11 of our Annual Report on Form 10-K, filed on May 1,
    2001 (File No. 001-13927).10
.10

Amended and Restated Lease, dated
    October 23, 1989 (the Missouri Falls Lease), between CSK Auto,
    Inc. (formerly known as Northern Automotive Corporation) and
    Missouri Falls Associates Limited Partnership, incorporated
    herein by reference to Exhibit 10.10 of CSK Auto, Incs
    Registration Statement on Form S-4, filed on February 28, 1997
    (File No. 333-22511).10
.11

First Amendment to the Missouri
    Falls Lease, dated November 22, 1991, between CSK Auto, Inc.
    (formerly known as Northern Automotive Corporation) and Missouri
    Falls Associates Limited Partnership, incorporated herein by
    reference to Exhibit 10.11 of CSK Auto, Incs Registration
    Statement on Form S-4, filed on February 28, 1997 (File No.
    333-22511).10
.12

Amendment to Leases, dated October
    30, 1996, by and between Missouri Falls Associates Limited
    Partnership and CSK Auto, Inc. (formerly known as Northern
    Automotive Corporation), incorporated herein by reference to
    Exhibit 10.12 of CSK Auto, Incs Registration Statement on
    Form S-4, filed February on 28, 1997 (File No. 333-22511). 157




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##### Table of Contents



ExhibitNumber

Description of Exhibits10
.13

Lease, dated July 31, 1997,
    between Missouri Falls Partners and CSK Auto, Inc.; First
    Amendment to Lease, dated April 1, 2000, incorporated herein by
    reference to Exhibit 10.15 of our Annual Report on Form 10-K,
    filed on May 1, 2001 (File No. 001-13927).10
.14

Lease, dated April 20, 2000,
    between Missouri Falls Partners and CSK Auto, Inc.; First
    Amendment to Lease, dated February 23, 2001, incorporated herein
    by reference to Exhibit 10.16 of our Annual Report on Form 10-K,
    filed on May 1, 2001 (File No. 001-13927).10
.15

Lease, dated April 20, 2000,
    between Missouri Falls Partners and CSK Auto, Inc.; First
    Amendment to Lease dated August 20, 2000, incorporated herein by
    reference to Exhibit 10.17 of our Annual Report on Form 10-K,
    filed on May 1, 2001 (File No. 001-13927).10
.16

Amendment to all CSK Auto, Inc.
    Leases at Missouri Falls, dated December 6, 2001, between
    Missouri Falls Partners and MFP Holdings, LLC and CSK Auto,
    Inc., incorporated herein by reference to Exhibit 10.24 of
    our Registration Statement on Form S-4, filed on February 11,
    2002
    (File No. 333-82492).10
.17

Employment Agreement, dated
    October 13, 1995, between CSK Auto, Inc. (formerly known as
    Northern Automotive Corporation) and Don Watson, incorporated
    herein by reference to Exhibit 10.21 of our Annual Report
    on Form 10-K, filed on May 1, 2001 (File No. 001-13927)..10
.18

Employment Agreement, dated
    February 25, 1997, between CSK Auto, Inc. and Dale E. Ward,
    incorporated herein by reference to Exhibit 10.23 of our Annual
    Report on Form 10-K, filed on May 1, 2001 (File No.
    001-13927).10
.19

Form of Indemnity Agreement,
    between CSK Auto Corporation and each Director, incorporated
    herein by reference to Exhibit 10.21 of our Annual Report on
    Form 10-K, filed on May 2, 2005
    (File No. 001-13927).10
.20

Amended and Restated Severance and
    Retention Agreement, between CSK Auto, Inc. and Dale Ward, dated
    February 14, 2002, incorporated herein by reference to Exhibit
    10.32 of our Annual Report on Form 10-K, filed on April 23, 2002
    (File No. 001-13927).10
.21

Amended and Restated Severance and
    Retention Agreement, between CSK Auto, Inc. and Don Watson,
    dated February 14, 2002, incorporated herein by reference to
    Exhibit 10.33 of our Annual Report on Form 10-K, filed on April
    23, 2002 (File No. 001-13927).10
.22

Amended and Restated Severance and
    Retention Agreement, between CSK Auto, Inc. and Martin Fraser,
    dated February 14, 2002, incorporated herein by reference to
    Exhibit 10.34 of our Annual Report on Form 10-K, filed on April
    23, 2002 (File No. 001-13927).10
.23

Amended and Restated Severance and
    Retention Agreement, between CSK Auto, Inc. and Larry Ellis,
    dated February 14, 2002, incorporated herein by reference to
    Exhibit 10.35 of our Annual Report on Form 10-K, filed on April
    23, 2002 (File No. 001-13927).10
.24

Amended and Restated Severance and
    Retention Agreement, between CSK Auto, Inc. and Larry Buresh,
    dated February 14, 2002, incorporated herein by reference to
    Exhibit 10.36 of our Annual Report on Form 10-K, filed on April
    23, 2002 (File No. 001-13927).10
.25

Amended and Restated Severance and
    Retention Agreement, between CSK Auto, Inc. and Bill Evans,
    dated February 14, 2002, incorporated herein by reference to
    Exhibit 10.37 of our Annual Report on Form 10-K, filed on April
    23, 2002 (File No. 001-13927).10
.26

Severance and Retention Agreement,
    between CSK Auto, Inc. and James B. Riley, dated October 24,
    2005, incorporated herein by reference to Exhibit 10.05 to our
    Quarterly Report on Form 10-Q, filed on December 9, 2005 (File
    No. 001-13927).10
.27

Amended and Restated Severance and
    Retention Agreement, between CSK Auto, Inc. and Louis Mancini,
    dated December 20, 2005, incorporated herein by reference to
    Exhibit 10.29 of our Annual Report on
    Form 10-K,
    filed on May 1, 2007 (File
    No. 001-13927).10
.28

Form of First Amendment to
    Severance and Retention Agreements, between CSK Auto, Inc. and
    each of its then senior executive officers (other than Maynard
    Jenkins), incorporated herein by reference to our Current Report
    on Form 8-K, filed on March 3, 2006 (File No. 001-13927). 158




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##### Table of Contents



ExhibitNumber

Description of Exhibits10
.29

Indicative Callable Swap Term
    Sheet, effective as of April 5, 2004, between Lehman Brothers
    and CSK Auto, Inc., incorporated herein by reference to
    Exhibit 10.57 of our Annual Report on Form 10-K, filed on April
    15, 2004 (File No. 001-13927).10
.30

Amended and Restated Registration
    Rights Agreement, dated as of May 16, 2002, by and among
    CSK Auto Corporation, LBI Group Inc. and Investcorp CSK
    Holdings L.P., incorporated herein by reference to Exhibit
    4.05.01 to our Registration Statement on Form S-3/A, filed on
    May 17, 2002
    (File No. 333-77008).10
.31

Registration Rights Agreement,
    dated July 29, 2005, among CSK Auto, Inc., CSK Auto Corporation,
    CSKAUTO.COM, Inc. and the initial purchasers listed therein,
    incorporated herein by reference to Exhibit 10.3 to our Current
    Report on Form 8-K, filed on July 29, 2005 (File No. 001-13927).10
.32

Registration Rights Agreement,
    dated December 19, 2005, among CSK Auto, Inc., CSK Auto
    Corporation, CSKAUTO.COM, Inc. and JPMorgan Securities Inc.,
    incorporated herein by reference to Exhibit 10.2 to our Current
    Report on Form 8-K, filed on December 20, 2005 (File No.
    001-13927).10
.33

Employment Agreement, dated March
    30, 2000, between CSK Auto, Inc. and Jim Bazlen, incorporated
    herein by reference to Exhibit 10.47 of our Annual Report on
    Form 10-K, filed on May 5, 2003
    (File No. 001-13927).10
.33.1

Amendment to Employment Agreement
    with James Bazlen, effective October 15, 2004, incorporated
    herein by reference to Exhibit 99.4 of our Current Report on
    Form 8-K, filed on October 20, 2004 (File No.
    001-13927).10
.34

Form of Non-Qualified Stock Option
    Agreement to be used in connection with our 2004 Stock and
    Incentive Plan, incorporated herein by reference to Exhibit 99.1
    of our Current Report on Form 8-K, filed on October 20, 2004
    (File No. 001-13927).10
.35

Form of Non-Qualified Stock Option
    Agreement to be used in connection with our 2004 Stock and
    Incentive Plan, incorporated herein by reference to Exhibit 99.2
    of our Current Report on Form 8-K, filed on October 20, 2004
    (File No. 001-13927).10
.36

Form of Restricted Stock Agreement
    to be used in connection with our 2004 Stock and Incentive Plan,
    incorporated herein by reference to Exhibit 99.3 of our Current
    Report on Form 8-K, filed on October 20, 2004 (File No.
    001-13927).10
.37

Stock Purchase Agreement relating
    to Automotive Information Systems, Inc., dated January 21, 2005,
    by and between CSK Auto, Inc. and Mobile Productivity, Inc.,
    incorporated herein by reference to Exhibit 10.1 of our Current
    Report on Form 8-K, filed on January 27, 2005 (File No.
    001-13927).10
.38

Summary of Executive Compensation
    Agreements, incorporated herein by reference to Exhibit 10.36 of
    our Annual Report on Form 10-K, filed on May 2, 2005 (File No.
    001-13927).10
.39

Waiver, dated as of May 1, 2005,
    to the Amended and Restated Credit Agreement, dated as of
    January 16, 2004, among CSK AUTO, INC., the several banks and
    other financial institutions or entities from time to time party
    thereto (the Lenders), the Syndication Agent
    and the Co-Documentation Agents named therein, and JPMorgan
    Chase Bank, as administrative agent for the Lenders,
    incorporated herein by reference to Exhibit 10.37 of our Annual
    Report on Form 10-K, filed on May 2, 2005
    (File No. 001-13927).10
.40

Amended and Restated Outside
    Director Compensation Policy, incorporated herein by reference
    to our Current Report on Form 8-K, filed on May 18, 2005 (File
    No. 001-13927).10
.41

Long-Term Incentive Plan,
    incorporated herein by reference to Exhibit 10.1 of our Current
    Report on Form 8-K, filed on July 1, 2005 (File No.
    001-13927).10
.42

Form of Incentive Bonus Unit Award
    Agreement, incorporated herein by reference to Exhibit 10.2 of
    our Current Report on Form 8-K, filed on July 1, 2005 (File No.
    001-13927). 159




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##### Table of Contents



ExhibitNumber

Description of Exhibits10
.43

Second Amended and Restated Credit
    Agreement, dated as of July 25, 2005, among CSK Auto, Inc., the
    Lenders party thereto, JPMorgan Chase Bank, N.A., as
    Administrative Agent, and J.P. Morgan Securities, Inc., as
    Sole Bookrunner and Sole Lead Arranger, incorporated herein by
    reference to Exhibit 10.1 of our Current Report on Form 8-K,
    filed on July 29, 2005 (File No. 001-13927).10
.43.1

First Amendment to Second Amended
    and Restated Credit Agreement, dated as of December 16, 2005,
    among CSK Auto, Inc., the several lenders from time to time
    parties thereto, JPMorgan Chase Bank N.A., as administrative
    agent, and the co-syndication agents and co-documentation agents
    party thereto, incorporated herein by reference to Exhibit 10.1
    of our Current Report on Form 8-K, filed on December 20, 2005
    (File No. 001-13927).10
.44

Amended and Restated Guarantee and
    Collateral Agreement, dated as of July 29, 2005, among
    CSK Auto, Inc., CSKAUTO.COM, Inc., CSK Auto Corporation,
    and JPMorgan Chase Bank, N.A., as administrative agent,
    incorporated herein by reference to Exhibit 10.2 of our Current
    Report on
    Form 8-K,
    filed on July 29, 2005 (File No. 001-13927).10
.45

Term Credit Agreement, dated as of
    June 30, 2006, among CSK Auto, Inc., the Lenders party thereto,
    JPMorgan Chase Bank, N.A., as Administrative Agent, and Lehman
    Commercial Paper Inc. and Wachovia Bank, N.A., as Co-Syndication
    Agents, incorporated herein by reference to Exhibit 10.1 of our
    Current Report on Form 8-K, filed on July 7, 2006 (File No.
    001-13927).10
.45.1

Amendment, dated as of August 3,
    2006, to the Credit Agreement dated as of June 30, 2006, among
    CSK Auto, Inc., the Lenders party thereto, JPMorgan Chase
    Bank, N.A., as Administrative Agent, and Lehman Commercial Paper
    Inc. and Wachovia Bank, National Association, as Co-Syndication
    Agents, incorporated by reference to Exhibit 10.50.1 of our
    Annual Report on Form 10-K, filed on May 1, 2007
    (File No. 001-13927).10
.45.2

Second Amendment, dated as of
    April 27, 2007, among CSK Auto, Inc., the Lenders party thereto,
    JPMorgan Chase Bank, N.A., as Administrative Agent, and Lehman
    Commercial Paper Inc. and Wachovia Bank, National Association,
    as Co-Syndication Agents, incorporated by reference to
    Exhibit 10.50.2 of our Annual Report on
    Form 10-K,
    filed on May 1, 2007 (File No. 001-13927).10
.46

Form of Letter Agreement between
    CSK Auto Corporation and Maynard Jenkins amending March 17, 1998
    Stock Option Grant, incorporated herein by reference to Exhibit
    10.2 of our Current Report on Form 8-K, filed on April 18, 2007
    (File No. 001-13927).10
.47

Form of Letter Agreement between
    CSK Auto Corporation and Maynard Jenkins amending March 18, 1999
    Stock Option Grant, incorporated herein by reference to Exhibit
    10.3 of our Current Report on Form 8-K, filed on April 18, 2007
    (File No. 001-13927).10
.48

Form of Letter Agreement between
    CSK Auto Corporation and Maynard Jenkins amending December 21,
    1999 Stock Option Grant, incorporated herein by reference to
    Exhibit 10.4 of our Current Report on Form 8-K, filed on April
    18, 2007 (File No. 001-13927).10
.49

Form of Letter Agreement between
    CSK Auto Corporation and Maynard Jenkins amending April 5, 2002
    Stock Option Grant, incorporated herein by reference to Exhibit
    10.5 of our Current Report on Form 8-K, filed on April 18, 2007
    (File No. 001-13927).10
.50

Form of Election Agreement between
    Optionee and CSK Auto Corporation, incorporated by reference to
    Exhibit 10.1 of our Current Report on Form 8-K filed on
    December 22, 2006 (File No. 001-13927).10
.51

Form of Second Amended and
    Restated Severance and Retention Agreement between CSK Auto,
    Inc. and each of its then senior executive officers (other than
    Maynard Jenkins), incorporated by reference to Exhibit 10.1
    of our Current Report on Form 8-K filed on February 27, 2007
    (File No. 001-13927).10
.52

Employment Agreement, dated as of
    June 7, 2007, by and between CSK Auto, Inc., and Lawrence N.
    Mondry, incorporated by reference to Exhibit 10.1 of our Current
    Report on Form 8-K, filed on June 13, 2007 (File No.
    001-13927). 160




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##### Table of Contents



ExhibitNumber

Description of Exhibits10
.53

Form of Interim Executive Services
    Agreement between CSK Auto, Inc. and Tatum, LLC, incorporated by
    reference to Exhibit 10.1 of our Current Report on
    Form 8-K,
    filed on June 26, 2007 (File
    No. 001-13927).10
.54

Form of Indemnification Agreement
    for Interim Executive among CSK Auto Corporation, CSK Auto,
    Inc., CSKAUTO.COM, Inc. and Steven L. Korby, incorporated by
    reference to Exhibit 10.2 of our Current Report on
    Form 8-K,
    filed on June 26, 2007 (File
    No. 001-13927).21
.01*

Subsidiaries of the Company.24
.01*

Power of Attorney (included on
    signature page to this Annual Report).31
.01*

Certification by the Chief
    Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.31
.02*

Certification by the Chief
    Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.32
.01*

Certification of the Chief
    Executive Officer and Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.99
.01

Waiver, dated as of May 4, 2006,
    to Second Amended and Restated Credit Agreement, dated as of
    July 25, 2005, among CSK Auto, Inc., the lenders party thereto
    and JPMorgan Chase Bank, N.A., as administrative agent,
    incorporated herein by reference to Exhibit 99.2 of our Current
    Report on
    Form 8-K,
    filed on May 23, 2006 (File No. 001-13927).99
.01.1

Second Waiver, dated as of June
    16, 2006, to the Second Amended and Restated Credit Agreement,
    dated as of July 25, 2005, among CSK Auto, Inc., the Lenders
    party thereto, the Co-Syndication Agents and the
    Co-Documentation Agents party thereto, and JPMorgan Chase Bank,
    N.A., as Administrative Agent, incorporated herein by reference
    to Exhibit 99.3 of our Current Report on Form 8-K, filed on June
    19, 2006 (File No. 001-13927).99
.01.2

Third Waiver, dated as of June 11,
    2007, to the Second Amended and Restated Credit Agreement, dated
    as of July 25, 2005, among CSK Auto, Inc., the Lenders party
    thereto, the Co-Syndication Agents and the Co-Documentation
    Agents party thereto, and JPMorgan Chase Bank, N.A., as
    Administrative Agent, incorporated herein by reference to
    Exhibit 99.1 of our Current Report on Form 8-K, filed on June
    13, 2007 (File No. 001-13927).     *
    
    Filed herewith.
    
    Executive compensation plans or arrangements. 161