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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K/A -3
 FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 COMMISSION FILE NUMBER 0-11579
 TBC CORPORATION
 
  DELAWARE
    
    20-1888610(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)7111 Fairway Drive, Suite 201Palm Beach Gardens, Florida
    
    33418(Address of principal executive offices)
    
    (Zip Code)
   Name of each exchangeTitle of each class
    
    on which registeredNone
    
    None
  COMMON STOCK
 þ o
 o
 þ o
 Aggregate market value of outstanding shares of Common Stock,
par value $.10, held by non-affiliates of the Company on
December 31, 2004 (for purposes of this calculation, 1,647,867
shares beneficially owned by directors and executive officers of
the Company were treated as being held by affiliates of the Company)
    
    $
    574,469,125Number of shares of Common Stock, par value $.10, outstanding
at the close of business on December 31, 2004
    
    
    22,312,224




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DOCUMENT INCORPORATED BY REFERENCE
  Explanatory Note
   
    
    Part II  Item 6
    
    -
    
    Selected Financial Data
    
    Part II  Item 7
    
    -
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    Part II  Item 8
    
    -
    
    Financial Statements and Supplementary Data
    
    Part II  Item 9A
    
    -
    
    Controls and Procedures
    
    Part IV  Item 15
    
    -
    
    Exhibits and Financial Statement Schedules
  2




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TABLE OF CONTENTS  PART IItem 1. BUSINESSItem 2. PROPERTIESItem 3. LEGAL PROCEEDINGSItem 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIItem 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESItem 6. SELECTED FINANCIAL DATAItem 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKItem 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAItem 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREItem 9A. CONTROLS AND PROCEDURESItem 9B. OTHER INFORMATIONPART IIIItem 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTItem 11. EXECUTIVE COMPENSATIONItem 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSItem 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSItem 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVItem 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULESSIGNATURESINDEX TO EXHIBITSEX-10.20 EXECUTIVE DEFERRED COMPENSATION PLANEX-21.1 SUBSIDIARIES OF TBC CORPORATIONEX-23.1 CONSENT OF PRICEWATERHOUSECOOPERS LLPEX-24.1 POWER OF ATTORNEYEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO    Table of Contents  
 PART I
 
 Item 1. BUSINESS
    Retail Business
    3




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Wholesale Business
   Products and Suppliers
     Trademarks
  4




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Customers
   Seasonality and Inventory
    Competition
    5




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Employees
  Internet Website Address and Availability of SEC Filings
  
 Item 2. PROPERTIES
  
 Item 3. LEGAL PROCEEDINGS
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  6




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EXECUTIVE OFFICERS OF THE REGISTRANT
  Capacities in which IndividualName
    
    Age
    
    Serves the CompanyLawrence C. Day
    
    
    55
    
    
    President and Chief Executive OfficerThomas W. Garvey
    
    
    50
    
    
    Executive Vice President and Chief Financial OfficerKenneth P. Dick
    
    
    58
    
    
    President and Chief Executive Officer of
TBC Private Brands, Inc. and Carrolls, Inc.J. Glen Gravatt
    
    
    53
    
    
    Executive Vice President of PurchasingWilliam M. Potts
    
    
    52
    
    
    Senior Vice President of Human ResourcesOrland Wolford
    
    
    57
    
    
    President and Chief Executive Officer of Tire Kingdom,
Merchants and NTWErik R. Olsen
    
    
    41
    
    
    Senior Vice President and Chief Marketing Officer
       7




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EXECUTIVE OFFICERS OF THE REGISTRANT (Continued)
  8




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PART II
 
 Item 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
   Price RangeHigh
    
    LowQuarter ended03/31/03
    
    
    14.73
    
    
    
    11.8106/30/03
    
    
    19.30
    
    
    
    13.5809/30/03
    
    
    26.84
    
    
    
    16.5512/31/03
    
    
    30.30
    
    
    
    24.7803/31/04
    
    
    30.73
    
    
    
    25.7006/30/04
    
    
    30.90
    
    
    
    23.5009/30/04
    
    
    24.74
    
    
    
    20.3112/31/04
    
    
    28.67
    
    
    
    18.80
   9




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Item 6. SELECTED FINANCIAL DATA
  10




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SELECTED FINANCIAL DATA (CONTINUED)
 For the Years Ended December 31,Restated
    
    
    Restated
    
    
    Restated
    
    
    Restated
    
    
    Restated2004
    
    
    2003
    
    
    2002 (d)
    
    
    2001 (d)
    
    
    2000 (d)INCOME STATEMENT DATA (a):Net sales (b)
    
    $
    1,855,418
    
    
    $
    1,318,531
    
    
    $
    1,109,663
    
    
    $
    1,009,278
    
    
    $
    902,740Gross profit
    
    
    694,794
    
    
    
    433,886
    
    
    
    300,282
    
    
    
    267,573
    
    
    
    197,802Income before cumulative effect of
change in accounting
principle
    
    
    37,196
    
    
    
    31,258
    
    
    
    26,103
    
    
    
    22,257
    
    
    
    18,347Cumulative effect of change in
accounting principle, net of
income tax benefit of $123 in
2003
    
    
    
    
    
    
    (190
    )
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    37,196
    
    
    $
    31,068
    
    
    $
    26,103
    
    
    $
    22,257
    
    
    $
    18,347Diluted earnings per share before
cumulative effect of a change
in accounting principle
    
    $
    1.60
    
    
    $
    1.37
    
    
    $
    1.19
    
    
    $
    1.04
    
    
    $
    0.87Diluted earnings per share
    
    $
    1.60
    
    
    $
    1.37
    
    
    $
    1.19
    
    
    $
    1.04
    
    
    $
    0.87Average shares and
equivalents outstanding
    
    
    23,280
    
    
    
    22,743
    
    
    
    21,966
    
    
    
    21,386
    
    
    
    21,191BALANCE SHEET DATA (a):Total assets
    
    $
    864,753
    
    
    $
    774,309
    
    
    $
    473,086
    
    
    $
    462,618
    
    
    $
    449,691Working capital
    
    
    138,610
    
    
    
    137,909
    
    
    
    167,504
    
    
    
    169,040
    
    
    
    156,847Long-term debt
    
    
    167,349
    
    
    
    208,620
    
    
    
    79,700
    
    
    
    101,000
    
    
    
    113,531Total liabilities
    
    
    562,086
    
    
    
    513,141
    
    
    
    249,901
    
    
    
    266,955
    
    
    
    275,541Stockholders equity
    
    
    302,667
    
    
    
    261,168
    
    
    
    223,185
    
    
    
    195,663
    
    
    
    174,150
 
 (a)
    
    In thousands, except per share amounts.(b)
    
    Net sales include revenues from sales of products and services, plus
franchise and royalty fees, less estimated returns, allowances and customer rebates. Reported net sales include sales to
related parties of $125,088 in 2004,
$82,010 in 2003, $100,406 in 2002, $92,813 in 2001 and $86,961 in 2000.(c)
    
    During 2003, the Company reclassified $1,652 of vendor rebates from
selling, administrative and retail store expenses
to cost of sales in order to properly reflect the income statement in
accordance with EITF 02-16 as discussed in Note 1 -
Nature of Business and Significant Accounting Policies. For the periods ended
December 31, 2002, 2001 and 2000, a
reclassification was not required since vendor rebates were properly accounted
for as a component of cost of sales.(d)
    
    The correction for lease accounting as further described in Note 4 of the
consolidated financial statements contained in
Item 8 of this Form 10-K/A resulted in adjustments to the previously reported
2001 and 2000 income statement and
balance sheet data of an increase to selling, administrative and retail store
expenses of $636 and $175, a decrease to net
income of $383 and $105, a decrease to diluted earnings per share of $0.02 and
$0.00, a decrease to total assets of
$2,174 and $2,230, a decrease to total liabilities of $1,686 and $2,125 and a
decrease to stockholders equity of $488 and
$105, respectively. The balance sheet data for 2002 also includes a decrease
to total assets of $2,174, to total liabilities of
$1,351 and to stockholders equity of $823. 11




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Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 RESTATEMENT
  RESULTS OF OPERATIONS
  For the Years Ended December 31,RESTATED
    
    RESTATED
    
    RESTATED2004
    
    2003
    
    2002NET SALES
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %COST OF SALES
    
    
    62.6
    %
    
    
    67.1
    %
    
    
    72.9
    %GROSS PROFIT
    
    
    37.4
    %
    
    
    32.9
    %
    
    
    27.1
    %EXPENSES:Distribution expenses
    
    
    4.0
    %
    
    
    4.6
    %
    
    
    4.8
    %Selling, administrative and
retail store expenses
    
    
    29.6
    %
    
    
    24.0
    %
    
    
    18.0
    %Interest expense  net
    
    
    1.0
    %
    
    
    0.8
    %
    
    
    0.8
    %Other income
    
    
    -0.3
    %
    
    
    -0.2
    %
    
    
    -0.2
    %Total expenses
    
    
    34.3
    %
    
    
    29.2
    %
    
    
    23.4
    %INCOME BEFORE INCOME TAXES
AND CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE
    
    
    3.1
    %
    
    
    3.7
    %
    
    
    3.7
    %PROVISION FOR INCOME TAXES
    
    
    1.1
    %
    
    
    1.3
    %
    
    
    1.3
    %INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE
    
    
    2.0
    %
    
    
    2.4
    %
    
    
    2.4
    %CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF
INCOME TAX BENEFIT
    
    
    
    
    
    
    -0.0
    %
    
    
    NET INCOME
    
    
    2.0
    %
    
    
    2.4
    %
    
    
    2.4
    %
 12




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RESULTS OF OPERATIONS (Continued)
 For the Years Ended December 31,RESTATED
    
    
    RESTATED
    
    
    Fav/(Unfav)
    
    
    Fav/(Unfav)2004
    
    
    2003
    
    
    Change
    
    
    Change %NET SALES
    
    $
    1,855,418
    
    
    $
    1,318,531
    
    
    $
    536,887
    
    
    
    40.7
    %COST OF SALES
    
    
    1,160,624
    
    
    
    884,645
    
    
    
    (275,979
    )
    
    
    -31.2
    %GROSS PROFIT
    
    
    694,794
    
    
    
    433,886
    
    
    
    260,908
    
    
    
    60.1
    %EXPENSES:Distribution expenses
    
    
    74,284
    
    
    
    61,356
    
    
    
    (12,928
    )
    
    
    -21.1
    %Selling, administrative and
retail store expenses
    
    
    548,931
    
    
    
    316,196
    
    
    
    (232,735
    )
    
    
    -73.6
    %Interest expense  net
    
    
    18,739
    
    
    
    10,409
    
    
    
    (8,330
    )
    
    
    -80.0
    %Other income
    
    
    (4,722
    )
    
    
    (2,547
    )
    
    
    2,175
    
    
    
    85.4
    %Total expenses
    
    
    637,232
    
    
    
    385,414
    
    
    
    (251,818
    )
    
    
    -65.3
    %INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
    
    
    57,562
    
    
    
    48,472
    
    
    
    9,090
    
    
    
    18.8
    %PROVISION FOR INCOME TAXES
    
    
    20,366
    
    
    
    17,214
    
    
    
    (3,152
    )
    
    
    -18.3
    %INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE
    
    
    37,196
    
    
    
    31,258
    
    
    
    5,938
    
    
    
    19.0
    %CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF
INCOME TAX BENEFIT OF $123
    
    
    
    
    
    
    (190
    )
    
    
    190
    
    
    
    100.0
    %NET INCOME
    
    $
    37,196
    
    
    $
    31,068
    
    
    $
    6,128
    
    
    
    19.7
    %
 13




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RESULTS OF OPERATIONS (Continued)
 For the Years Ended December 31,RESTATED
    
    
    RESTATED
    
    
    Fav/(Unfav)
    
    
    Fav/(Unfav)2003
    
    
    2002
    
    
    Change
    
    
    Change %NET SALES
    
    $
    1,318,531
    
    
    $
    1,109,663
    
    
    $
    208,868
    
    
    
    18.8
    %COST OF SALES
    
    
    884,645
    
    
    
    809,381
    
    
    
    (75,264
    )
    
    
    -9.3
    %GROSS PROFIT
    
    
    433,886
    
    
    
    300,282
    
    
    
    133,604
    
    
    
    44.5
    %EXPENSES:Distribution expenses
    
    
    61,356
    
    
    
    53,136
    
    
    
    (8,220
    )
    
    
    -15.5
    %Selling, administrative and
retail store expenses
    
    
    316,196
    
    
    
    199,309
    
    
    
    (116,887
    )
    
    
    -58.6
    %Interest expense  net
    
    
    10,409
    
    
    
    8,703
    
    
    
    (1,706
    )
    
    
    -19.6
    %Other income
    
    
    (2,547
    )
    
    
    (2,411
    )
    
    
    136
    
    
    
    5.6
    %Total expenses
    
    
    385,414
    
    
    
    258,737
    
    
    
    (126,677
    )
    
    
    -49.0
    %INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
    
    
    48,472
    
    
    
    41,545
    
    
    
    6,927
    
    
    
    16.7
    %PROVISION FOR INCOME TAXES
    
    
    17,214
    
    
    
    15,442
    
    
    
    (1,772
    )
    
    
    -11.5
    %INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE
    
    
    31,258
    
    
    
    26,103
    
    
    
    5,155
    
    
    
    19.7
    %CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF
INCOME TAX BENEFIT OF $123
    
    
    (190
    )
    
    
    
    
    
    
    (190
    )
    
    
    -100.0
    %NET INCOME
    
    $
    31,068
    
    
    $
    26,103
    
    
    $
    4,965
    
    
    
    19.0
    %
 14




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Consolidated Results of Operations
   2004 Compared to 2003
     15




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2003 Compared to 2002
   16




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LIQUIDITY AND CAPITAL RESOURCES
   17




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OFF-BALANCE SHEET ARRANGEMENTS
 Financial guarantees
 Variable Interest Entities
  18




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CONTRACTUAL OBLIGATIONS
  Payments due by PeriodWithin 1
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    year
    
    
    2-3 Years
    
    
    4-5 Years
    
    
    5 YearsContractual Obligations:Long-term debt
    
    $
    196,775
    
    
    $
    40,443
    
    
    $
    85,886
    
    
    $
    70,446
    
    
    $
    Short-term debt
    
    
    41,013
    
    
    
    41,013
    
    
    
    
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    11,789
    
    
    
    773
    
    
    
    1,881
    
    
    
    2,226
    
    
    
    6,909Interest expense obligations
    
    
    67,000
    
    
    
    18,000
    
    
    
    33,000
    
    
    
    16,000
    
    
    
    Operating lease
obligations
    
    
    885,938
    
    
    
    86,915
    
    
    
    160,279
    
    
    
    138,361
    
    
    
    500,383Total contractual
obligations
    
    $
    1,202,515
    
    
    $
    187,144
    
    
    $
    281,046
    
    
    $
    227,033
    
    
    $
    507,292
 CRITICAL ACCOUNTING POLICIES
  Net sales
 Income Tax Accounting
 Allowance for doubtful accounts and notes
 19




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Inventories
  Goodwill, Trademarks and Other Intangible Assets
 Warranty costs
 Self-Insured Reserves
 Retirement plan obligations
 20




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Operating leases 
 IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
      21




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FORWARD-LOOKING STATEMENTS AND RISKS
  22




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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  23




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Report of Independent Registered Public Accounting Firm
   Consolidated financial statements and financial statement schedule
    Internal control over financial reporting
  24




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/s/ PricewaterhouseCoopers LLP
 25




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TBC CORPORATION
 CONSOLIDATED BALANCE SHEETS
  ASSETS
 RESTATEDRESTATED
    
    
    (See Notes(See Notes 4)
    
    
    3 and 4)December 31,
    
    
    December 31,2004
    
    
    2003CURRENT ASSETS:Cash and cash equivalents
    
    $
    2,832
    
    
    $
    2,645Accounts and notes receivable, less allowance
for doubtful accounts of $9,307 and $8,260 at
December 31, 2004 and 2003, respectivelyRelated parties
    
    
    32,149
    
    
    
    12,535Other
    
    
    117,812
    
    
    
    109,962Total accounts and notes receivable
    
    
    149,961
    
    
    
    122,497Inventories
    
    
    291,745
    
    
    
    264,810Refundable federal and state income taxes
    
    
    
    
    
    
    296Deferred income taxes
    
    
    24,790
    
    
    
    12,987Other current assets
    
    
    19,270
    
    
    
    10,346Total current assets
    
    
    488,598
    
    
    
    413,581PROPERTY, PLANT AND EQUIPMENT, AT COST:Land and improvements
    
    
    10,400
    
    
    
    12,100Buildings and leasehold improvements
    
    
    110,478
    
    
    
    104,176Furniture and equipment
    
    
    105,232
    
    
    
    93,710226,110
    
    
    
    209,986Less accumulated depreciation
    
    
    73,662
    
    
    
    56,833Total property, plant and equipment
    
    
    152,448
    
    
    
    153,153TRADEMARKS, NET
    
    
    15,824
    
    
    
    15,824GOODWILL, NET
    
    
    168,552
    
    
    
    157,383OTHER ASSETS
    
    
    39,331
    
    
    
    34,368TOTAL ASSETS
    
    $
    864,753
    
    
    $
    774,309
  26




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##### Table of Contents



TBC CORPORATION
 CONSOLIDATED BALANCE SHEETS
  LIABILITIES AND STOCKHOLDERS EQUITY
 RESTATEDRESTATED
    
    
    (See Notes(See Note 4)
    
    
    3 and 4)December 31,
    
    
    December 31,2004
    
    
    2003CURRENT LIABILITIES:Outstanding checks, net
    
    $
    30,368
    
    
    $
    11,411Accounts payable, trade
    
    
    128,656
    
    
    
    114,708Notes payable to banks
    
    
    41,013
    
    
    
    29,100Current portion of long-term debt and capital
lease obligations
    
    
    41,216
    
    
    
    28,723Federal and state income taxes payable
    
    
    17,790
    
    
    
    Warranty reserves
    
    
    19,667
    
    
    
    22,544Other current liabilities
    
    
    71,278
    
    
    
    69,186Total current liabilities
    
    
    349,988
    
    
    
    275,672LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, LESS CURRENT PORTION
    
    
    167,349
    
    
    
    208,620NONCURRENT LIABILITIES
    
    
    34,383
    
    
    
    20,986DEFERRED INCOME TAXES
    
    
    10,366
    
    
    
    7,863COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    STOCKHOLDERS EQUITY:Common stock, $.10 par value, shares issued and
outstanding - 22,312 and 21,905 on
December 31, 2004 and 2003, respectively
    
    
    2,231
    
    
    
    2,190Additional paid-in capital
    
    
    28,882
    
    
    
    23,898Deferred compensation
    
    
    (789
    )
    
    
    Accumulated other comprehensive loss
    
    
    (1,570
    )
    
    
    (1,637
    )Retained earnings
    
    
    273,913
    
    
    
    236,717Total stockholders equity
    
    
    302,667
    
    
    
    261,168TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    864,753
    
    
    $
    774,309
  27




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##### Table of Contents



TBC CORPORATION
 CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share amounts)
 RESTATED
    
    
    RESTATEDRESTATED
    
    
    (See Notes
    
    
    (See Notes(See Note 4)
    
    
    3 and 4)
    
    
    3 and 4)2004
    
    
    2003
    
    
    2002NET SALES*
    
    $
    1,855,418
    
    
    $
    1,318,531
    
    
    $
    1,109,663COST OF SALES
    
    
    1,160,624
    
    
    
    884,645
    
    
    
    809,381GROSS PROFIT
    
    
    694,794
    
    
    
    433,886
    
    
    
    300,282EXPENSES:Distribution expenses
    
    
    74,284
    
    
    
    61,356
    
    
    
    53,136Selling, administrative and
retail store expenses
    
    
    548,931
    
    
    
    316,196
    
    
    
    199,309Interest expense  net
    
    
    18,739
    
    
    
    10,409
    
    
    
    8,703Other income
    
    
    (4,722
    )
    
    
    (2,547
    )
    
    
    (2,411
    )Total expenses
    
    
    637,232
    
    
    
    385,414
    
    
    
    258,737INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
    
    
    57,562
    
    
    
    48,472
    
    
    
    41,545PROVISION FOR INCOME TAXES
    
    
    20,366
    
    
    
    17,214
    
    
    
    15,442INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE
    
    
    37,196
    
    
    
    31,258
    
    
    
    26,103CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET OF
INCOME TAX BENEFIT OF $123
    
    
    
    
    
    
    (190
    )
    
    
    NET INCOME
    
    $
    37,196
    
    
    $
    31,068
    
    
    $
    26,103BASIC EARNINGS PER SHAREIncome before the cumulative effect
of change in accounting principle
    
    $
    1.68
    
    
    $
    1.44
    
    
    $
    1.23Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    (0.00
    )
    
    
    Net income
    
    $
    1.68
    
    
    $
    1.44
    
    
    $
    1.23DILUTED EARNINGS PER SHAREIncome before the cumulative effect
of change in accounting principle
    
    $
    1.60
    
    
    $
    1.37
    
    
    $
    1.19Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    (0.00
    )
    
    
    Net income
    
    $
    1.60
    
    
    $
    1.37
    
    
    $
    1.19Weighted Average Common SharesOutstanding -Basic
    
    
    22,190
    
    
    
    21,649
    
    
    
    21,191Diluted
    
    
    23,280
    
    
    
    22,743
    
    
    
    21,966
 
 *
    
    Including sales to related parties of $125,088, $82,010 and $100,406 in the years ended
December 31, 2004, 2003 and 2002, respectively.  28




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##### Table of Contents



TBC CORPORATION
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (In thousands)
 AccumulatedOther
    
    
    
    
    
    
    RetainedCompre-
    
    
    
    
    
    
    EarningsCommon Stock
    
    
    Additional
    
    
    hensive
    
    
    
    
    
    
    (Restated
    
    
    
    
    
    
    TotalNumber of
    
    
    
    
    
    
    Paid-In
    
    
    Income
    
    
    Deferred
    
    
    See Notes
    
    
    
    
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    (Loss)
    
    
    Compensation
    
    
    3 and 4)
    
    
    Total
    
    
    IncomeBALANCE, JANUARY 1, 2002
AS PREVIOUSLY REPORTED
    
    
    21,003
    
    
    $
    2,100
    
    
    $
    11,783
    
    
    $
    (713
    )
    
    $
    
    
    
    $
    181,149
    
    
    $
    194,319Opening retained earnings change for
restatement (See Note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,343
    
    
    
    1,343Net income for period (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,103
    
    
    
    26,103Issuance of common stock under
stock option and incentive plans
    
    
    519
    
    
    
    52
    
    
    
    4,084
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,136Repurchase and retirement of common stock
    
    
    (230
    )
    
    
    (23
    )
    
    
    (139
    )
    
    
    
    
    
    
    
    
    
    
    (2,946
    )
    
    
    (3,108
    )Tax benefit from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    959
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    959Comprehensive income:Net income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    26,103Interest rate swap agreements, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (177
    )
    
    
    
    
    
    
    
    
    
    
    (177
    )
    
    
    (177
    )Minimum pension liability adjustments,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (391
    )
    
    
    
    
    
    
    
    
    
    
    (391
    )
    
    
    (391
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (568
    )Total comprehensive income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    25,535BALANCE, DECEMBER 31, 2002
AS RESTATED
    
    
    21,292
    
    
    
    2,129
    
    
    
    16,687
    
    
    
    (1,281
    )
    
    
    
    
    
    
    205,649
    
    
    
    223,184Net income for period (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,068
    
    
    
    31,068Issuance of common stock under
stock option and incentive plans
    
    
    613
    
    
    
    61
    
    
    
    5,391
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,452Tax benefit from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    1,820
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,820Comprehensive income:Net income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    31,068Interest rate swap agreements, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    331
    
    
    
    
    
    
    
    
    
    
    
    331
    
    
    
    331Minimum pension liability adjustments,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    (37
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (650
    )
    
    
    
    
    
    
    
    
    
    
    (650
    )
    
    
    (650
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (356
    )Total comprehensive income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    30,712BALANCE, DECEMBER 31, 2003
AS RESTATED
    
    
    21,905
    
    
    
    2,190
    
    
    
    23,898
    
    
    
    (1,637
    )
    
    
    
    
    
    
    236,717
    
    
    
    261,168Net income for period (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,196
    
    
    
    37,196Issuance of common stock under
stock option and incentive plans
    
    
    407
    
    
    
    41
    
    
    
    3,278
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,319Tax benefit from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    1,706
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,706Deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (789
    )
    
    
    
    
    
    
    (789
    )Comprehensive income:Net income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    37,196Interest rate swap agreements, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    327
    
    
    
    
    
    
    
    
    
    
    
    327
    
    
    
    327Minimum pension liability adjustments,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (312
    )
    
    
    
    
    
    
    
    
    
    
    (312
    )
    
    
    (312
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    52Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67Total comprehensive income (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    37,263BALANCE, DECEMBER 31, 2004
AS RESTATED
    
    
    22,312
    
    
    $
    2,231
    
    
    $
    28,882
    
    
    $
    (1,570
    )
    
    $
    (789
    )
    
    $
    273,913
    
    
    $
    302,667
  29




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##### Table of Contents



TBC CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 Years Ended December 31,RESTATED
    
    
    RESTATEDRESTATED
    
    
    (See Notes
    
    
    (See Notes(See Note 4)
    
    
    3 and 4)
    
    
    3 and 4)2004
    
    
    2003
    
    
    2002Operating Activities:Net income
    
    $
    37,196
    
    
    $
    31,068
    
    
    $
    26,103Adjustments to reconcile net income to net cash
used in operating activities:Depreciation
    
    
    27,499
    
    
    
    18,176
    
    
    
    12,665Amortization of intangible assets
    
    
    74
    
    
    
    69
    
    
    
    24Amortization of deferred financing costs
    
    
    1,967
    
    
    
    617
    
    
    
    446Amortization of other comprehensive income
    
    
    
    
    
    
    (309
    )
    
    
    83Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    190
    
    
    
    Provision for doubtful accounts and notes
    
    
    4,322
    
    
    
    4,267
    
    
    
    2,861(Gain) loss on sale of fixed assets
    
    
    (32
    )
    
    
    23
    
    
    
    (14
    )Provision for deferred income taxes
    
    
    (8,759
    )
    
    
    3,069
    
    
    
    (647
    )Equity in net earnings from joint ventures
    
    
    (2,164
    )
    
    
    196
    
    
    
    24Changes in operating assets and liabilities
net of effect of assets acquired:Receivables
    
    
    (31,600
    )
    
    
    (5,847
    )
    
    
    (7,329
    )Inventories
    
    
    (35,274
    )
    
    
    (40,382
    )
    
    
    4,899Other current assets
    
    
    (9,611
    )
    
    
    1,561
    
    
    
    (426
    )Other assets
    
    
    (580
    )
    
    
    1,240
    
    
    
    1,874Accounts payable, trade
    
    
    13,588
    
    
    
    14,283
    
    
    
    (8,027
    )Federal and state income taxes refundable or payable
    
    
    19,792
    
    
    
    987
    
    
    
    4,488Other current liabilities
    
    
    (5,417
    )
    
    
    4,393
    
    
    
    5,301Noncurrent liabilities
    
    
    6,852
    
    
    
    4,109
    
    
    
    3,098Net cash provided by operating activities
    
    
    17,853
    
    
    
    37,710
    
    
    
    45,423Investing Activities:Purchase of property, plant and equipment
    
    
    (25,506
    )
    
    
    (21,017
    )
    
    
    (15,155
    )Purchase of net assets of retail stores, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (11,154
    )Acquisition of Merchants, Inc., net of cash acquired
    
    
    
    
    
    
    (58,477
    )
    
    
    Purchase of NTW, Inc., net of cash acquired
    
    
    
    
    
    
    (225,914
    )
    
    
    Proceeds from sale of Merchants Commercial Division
    
    
    
    
    
    
    5,600
    
    
    
    Proceeds from sale of real estate under operating leases, net
    
    
    
    
    
    
    134,050
    
    
    
    Investments in joint ventures, net of distributions received
    
    
    (645
    )
    
    
    1,694
    
    
    
    466Net proceeds from asset dispositions
    
    
    3,493
    
    
    
    2,593
    
    
    
    1,022Net cash used in investing activities
    
    
    (22,658
    )
    
    
    (161,471
    )
    
    
    (24,821
    )Financing Activities:Net bank borrowings under short-term borrowing arrangements
    
    
    11,913
    
    
    
    (5,900
    )
    
    
    800Increase (decrease) in outstanding checks, net
    
    
    18,956
    
    
    
    3,245
    
    
    
    (1,707
    )Proceeds from long-term debt
    
    
    
    
    
    
    142,000
    
    
    
    Payments of deferred financing costs
    
    
    (17
    )
    
    
    (8,138
    )
    
    
    Payments of long-term debt and capital lease obligations
    
    
    (28,778
    )
    
    
    (15,300
    )
    
    
    (20,533
    )Proceeds from capital leases from sale of real estate, net
    
    
    
    
    
    
    3,594
    
    
    
    Issuance of common stock under stock incentive plans
    
    
    2,918
    
    
    
    4,586
    
    
    
    3,967Repurchase and retirement of common stock
    
    
    
    
    
    
    
    
    
    
    (3,108
    )Net cash provided by (used in) financing activities
    
    
    4,992
    
    
    
    124,087
    
    
    
    (20,581
    )Increase in cash and cash equivalents
    
    
    187
    
    
    
    326
    
    
    
    21Cash and cash equivalents:Balance  Beginning of period
    
    
    2,645
    
    
    
    2,319
    
    
    
    2,298Balance  End of period
    
    $
    2,832
    
    
    $
    2,645
    
    
    $
    2,319
  30




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##### Table of Contents



TBC CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
 (In thousands)
 Years Ended December 31,RESTATED
    
    
    RESTATEDRESTATED
    
    
    (See Notes
    
    
    (See Notes(See Note 4)
    
    
    3 and 4)
    
    
    3 and 4)2004
    
    
    2003
    
    
    2002Supplemental Disclosures of Cash Flow Information:Cash paid for  Interest
    
    $
    16,801
    
    
    $
    9,920
    
    
    $
    8,589Cash paid for  Income taxes
    
    
    10,077
    
    
    
    13,035
    
    
    
    11,601Supplemental Disclosures of Non-Cash Financing Activity:Tax benefit from exercise of stock options
    
    $
    1,706
    
    
    $
    1,820
    
    
    $
    959Issuance of restricted stock under stock incentive plan, net
    
    
    401
    
    
    
    866
    
    
    
    169Property, plant and equipment acquired under capital leases
    
    
    
    
    
    
    3,923
    
    
    
    1,200Supplemental Disclosures of Non-Cash Investing Activity:On October 28, 2004, the Company acquired the assets and certain
liabilities of Southwest Tire and Supply for a purchase price of
$4,474. The acquisition was accounted for under the
purchase method, as follows:Estimated fair value of assets acquired
    
    $
    2,765Goodwill
    
    
    1,769Obligations satisfied
    
    
    (4,474
    )Liabilities assumed
    
    $
    60On April 1, 2003, the Company completed the acquisition of
Merchants, Incorporated for a purchase price of $57,494,
plus applicable closing costs of $983. The acquisition was
accounted for under the purchase method, as follows:Estimated fair value of assets acquired
    
    
    
    
    
    $
    53,956Goodwill
    
    
    
    
    
    
    47,780Cash paid, net of assets acquired
    
    
    
    
    
    
    (58,477
    )Liabilities assumed
    
    
    
    
    
    $
    43,259On November 29, 2003, the Company completed the acquisition of
NTW Incorporated for a purchase price of $225,000,
plus applicable closing costs of $914. Contemporaneously with the
closing of the acquisition, the Company sold and leased back 86
retail stores under operating leases and received net proceeds of
$132,185. The transaction was accounted for under the purchase
method, as follows:Estimated fair value of assets acquired, including fees
to be amortized, net of assets disposed of in sale
leaseback transaction
    
    
    
    
    
    $
    104,016Goodwill
    
    
    
    
    
    
    52,729Cash paid, net of assets acquired
    
    
    
    
    
    
    (225,914
    )Cash received from sale and leaseback transactions, net of
transaction costs
    
    
    
    
    
    
    132,185Liabilities assumed
    
    
    
    
    
    $
    63,016In 2002, the Company purchased the net assets of certain
retail tire stores at a combined cash purchase price of
$11,154. The transaction was accounted for under the
purchase method, as follows:Estimated fair value of assets acquired
    
    
    
    
    
    
    
    
    
    $
    4,166Goodwill
    
    
    
    
    
    
    
    
    
    
    7,090Cash paid, net of assets acquired
    
    
    
    
    
    
    
    
    
    
    (11,154
    )Liabilities assumed
    
    
    
    
    
    
    
    
    
    $
    102
 
 
    
    During 2003, the Company acquired Merchants, Incorporated and NTW Incorporated (the
Purchased Companies) and these acquisitions were accounted for under the purchase method.
In connection with the Purchased Companies, the Company has adjusted the carrying value of
certain balance sheet items to account for changes to their respective fair market values.
During 2004, the Company increased goodwill by $9,358 comprised primarily of adjustments to
the initial values assigned to inventory, property, plant and equipment, other assets and
other accrued liabilities.  31




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 Operations
  Basis of Presentation
  Significant Accounting Policies
 Principles of consolidation
 Accounting estimates
 Equity investments
 Cash equivalents
 32




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##### Table of Contents



TBC CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Allowance for doubtful accounts and notes
 Inventories
  Concentrations of credit risk
 Property, plant and equipment
 Acquisitions
 Goodwill, Trademarks and Other Intangible Assets
 33




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##### Table of Contents



TBC CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
  Long-lived assets
 Net sales
 Warranty costs
 Interest on early payments to suppliers for product
 Self-Insured Reserves 
 Retirement plan obligations
 34




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##### Table of Contents



TBC CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Operating leases 
 Comprehensive income
 Shipping and Handling Costs
 Income Tax Accounting
 Earnings per share
 2004
    
    2003
    
    2002Weighted average common shares outstanding
    
    
    22,190
    
    
    
    21,649
    
    
    
    21,191Common share equivalents
    
    
    1,090
    
    
    
    1,094
    
    
    
    775Weighted average common shares and
equivalents outstanding
    
    
    23,280
    
    
    
    22,743
    
    
    
    21,966
 35




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##### Table of Contents



TBC CORPORATION
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Accounting for Stock-Based Compensation
 2004
    
    
    2003
    
    
    2002RESTATED
    
    
    RESTATEDRESTATED
    
    
    (See Notes
    
    
    (See Notes(See Note 4)
    
    
    3 and 4)
    
    
    3 and 4)Net income, as reported
    
    $
    37,196
    
    
    $
    31,068
    
    
    $
    26,103Add: Stock-based compensation included
in reported net income, net of tax effects
    
    
    183
    
    
    
    159
    
    
    
    78Less: Total stock-based compensation
expense determined using fair value
assumptions, net of tax effects
    
    
    (3,070
    )
    
    
    (2,397
    )
    
    
    (1,949
    )Pro forma net income
    
    $
    34,309
    
    
    $
    28,830
    
    
    $
    24,232Earnings per share:Basic  as reported
    
    $
    1.68
    
    
    $
    1.44
    
    
    $
    1.23 pro forma
    
    $
    1.55
    
    
    $
    1.33
    
    
    $
    1.14Diluted  as reported
    
    $
    1.60
    
    
    $
    1.37
    
    
    $
    1.19 pro forma
    
    $
    1.47
    
    
    $
    1.27
    
    
    $
    1.10
  36




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 2. RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
      37




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 3. RESTATEMENT FOR ACCOUNTING CHANGE
  AsPreviously
    
    
    
    
    
    
    AsReported
    
    
    Adjustments
    
    
    RestatedNet incomeYear ended December
31, 2003
    
    $
    33,359
    
    
    $
    (1,174
    )
    
    $
    32,185Year ended December
31, 2002
    
    
    27,382
    
    
    
    (944
    )
    
    
    26,438Basic earnings per shareYear ended December
31, 2003
    
    $
    1.54
    
    
    $
    (0.05
    )
    
    $
    1.49Year ended December
31, 2002
    
    
    1.29
    
    
    
    (0.04
    )
    
    
    1.25Diluted earnings per shareYear ended December
31, 2003
    
    $
    1.47
    
    
    $
    (0.05
    )
    
    $
    1.42Year ended December
31, 2002
    
    
    1.25
    
    
    
    (0.05
    )
    
    
    1.20
 4. RESTATEMENT FOR LEASE ACCOUNTING CORRECTION
   38




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 4. RESTATEMENT FOR LEASE ACCOUNTING CORRECTION (CONTINUED)
  As PreviouslyReported After
    
    
    
    
    
    
    Assetthe Accounting
    
    
    Straight-line
    
    
    RetirementChange From
    
    
    Rent
    
    
    Obligation
    
    
    AsLIFO to FIFO
    
    
    Adjustments
    
    
    Adjustments
    
    
    RestatedSelling, administrative
and retail
store expensesYear ended December
31, 2004
    
    $
    548,309
    
    
    $
    525
    
    
    $
    97
    
    
    $
    548,931Year ended December
31, 2003
    
    
    314,760
    
    
    
    1,369
    
    
    
    67
    
    
    
    316,196Year ended December
31, 2002
    
    
    198,775
    
    
    
    534
    
    
    
    
    
    
    
    199,309Net incomeYear ended December
31, 2004
    
    $
    37,598
    
    
    $
    (339
    )
    
    $
    (63
    )
    
    $
    37,196Year ended December
31, 2003
    
    
    32,185
    
    
    
    (927
    )
    
    
    (190
    )
    
    
    31,068Year ended December
31, 2002
    
    
    26,438
    
    
    
    (335
    )
    
    
    
    
    
    
    26,103Basic earnings per shareYear ended December
31, 2004
    
    $
    1.69
    
    
    $
    (0.02
    )
    
    $
    (0.00
    )
    
    $
    1.68Year ended December
31, 2003
    
    
    1.49
    
    
    
    (0.04
    )
    
    
    (0.00
    )
    
    
    1.44Year ended December
31, 2002
    
    
    1.25
    
    
    
    (0.02
    )
    
    
    
    
    
    
    1.23Diluted earnings per shareYear ended December
31, 2004
    
    $
    1.62
    
    
    $
    (0.01
    )
    
    $
    (0.00
    )
    
    $
    1.60Year ended December
31, 2003
    
    
    1.42
    
    
    
    (0.04
    )
    
    
    (0.00
    )
    
    
    1.37Year ended December
31, 2002
    
    
    1.20
    
    
    
    (0.01
    )
    
    
    
    
    
    
    1.19
  As PreviouslyReported After
    
    
    
    
    
    
    Assetthe Accounting
    
    
    Straight-line
    
    
    RetirementChange From
    
    
    Rent
    
    
    Obligation
    
    
    AsLIFO to FIFO
    
    
    Adjustment
    
    
    Adjustment
    
    
    RestatedProperty, Plant and Equipment, net
    
    $
    152,173
    
    
    $
    
    
    
    $
    275
    
    
    $
    152,448Goodwill, net
    
    
    180,353
    
    
    
    (11,962
    )
    
    
    161
    
    
    
    168,552Total assets
    
    
    76,279
    
    
    
    (11,962
    )
    
    
    436
    
    
    
    864,753Noncurrent liabilities
    
    
    43,320
    
    
    
    (9,939
    )
    
    
    1,002
    
    
    
    34,383Deferred income taxes
    
    
    10,613
    
    
    
    23
    
    
    
    (270
    )
    
    
    10,366Retained earnings
    
    
    276,255
    
    
    
    (2,046
    )
    
    
    (296
    )
    
    
    273,913Total liabilities and stockholders equity
    
    
    876,279
    
    
    
    (11,962
    )
    
    
    436
    
    
    
    864,753
 39




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 4. RESTATEMENT FOR LEASE ACCOUNTING CORRECTION (CONTINUED)
  As PreviouslyReported After
    
    
    
    
    
    
    Assetthe Accounting
    
    
    Straight-line
    
    
    RetirementChange From
    
    
    Rent
    
    
    Obligation
    
    
    AsLIFO to FIFO
    
    
    Adjustment
    
    
    Adjustment
    
    
    RestatedProperty, Plant and Equipment, net
    
    $
    152,861
    
    
    $
    
    
    
    $
    292
    
    
    $
    153,153Goodwill, net
    
    
    169,184
    
    
    
    (11,962
    )
    
    
    161
    
    
    
    157,383Total assets
    
    
    785,818
    
    
    
    (11,962
    )
    
    
    453
    
    
    
    774,309Noncurrent liabilities
    
    
    30,528
    
    
    
    (10,464
    )
    
    
    922
    
    
    
    20,986Deferred income taxes
    
    
    7,890
    
    
    
    209
    
    
    
    (236
    )
    
    
    7,863Retained earnings
    
    
    238,657
    
    
    
    (1,707
    )
    
    
    (233
    )
    
    
    236,717
 5. TRANSACTIONS WITH RELATED PARTIES AND MAJOR CUSTOMERS
  6. ACQUISITIONS
   40




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 6. ACQUISITIONS (CONTINUED)
    41




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 7. GOODWILL AND INTANGIBLE ASSETS
  RESTATED
    
    
    RESTATED(See Note 4)
    
    
    (See Note 4)December 31,
    
    
    December 31,2004
    
    
    2003GoodwillRetail segment
    
    $
    163,026
    
    
    $
    153,625Wholesale segment
    
    
    5,526
    
    
    
    3,758Total goodwill
    
    $
    168,552
    
    
    $
    157,383
  o
    
    An increase of $7.9 million pertaining to straight-line rent adjustments in
order to properly reflect deferred rent liabilities in connection with the stores
acquired for the NTW acquisition.o
    
    An increase of $7.7 million pertaining changes in valuation estimates related
to inventory acquired in conjunction with the NTW acquisition.o
    
    A decrease of $6.2 million pertaining to the sale and leaseback transactions as
described in Note 5  Acquisitions.o
    
    An increase of $1.8 million pertaining to the acquisition of the assets and
certain liabilities of Southwest Tire as described in Note 5  Acquisitions.
  8. NOTES PAYABLE TO BANKS AND LONG-TERM DEBT
  42




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 8. NOTES PAYABLE TO BANKS AND LONG-TERM DEBT (CONTINUED)
    December 31,2004
    
    
    20039.62% Series B Senior Note, due from 2004 through 2005
    
    $
    5,500
    
    
    $
    11,0009.81% Series C Senior Note, due from 2006 through 2008
    
    
    16,500
    
    
    
    16,5007.25% Series D Senior Note, due from 2007 through 2009
    
    
    50,000
    
    
    
    50,000Variable-Rate Term Loan Payable to Banks, due from 2004 through 2008
    
    
    124,776
    
    
    
    147,334Capital lease obligations
    
    
    11,789
    
    
    
    12,509208,565
    
    
    
    237,343Less current portion
    
    
    41,216
    
    
    
    28,723$
    167,349
    
    
    $
    208,620
  9. INTEREST RATE SWAP AGREEMENTS
  43




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 10. LEASE COMMITMENTS
   Operating
    
    
    CapitalYear
    
    Leases
    
    
    Leases2005
    
    $
    92,100
    
    
    $
    2,1562006
    
    
    88,852
    
    
    
    2,1542007
    
    
    80,696
    
    
    
    2,1362008
    
    
    75,175
    
    
    
    2,0412009
    
    
    70,293
    
    
    
    1,985Thereafter
    
    
    516,401
    
    
    
    10,572Total minimum lease payments
    
    
    923,517
    
    
    
    21,044Less  sublease income associated
with operating leases
    
    
    (37,579
    )Net minimum lease payments
    
    $
    885,938Less 
interest expense associated
with capital leases
    
    
    
    
    
    
    (9,255
    )Present value of net minimum lease payments
    
    
    
    
    
    $
    11,789
  44




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 11. INCOME TAXES
  2004
    
    
    2003
    
    
    2002RESTATED
    
    
    RESTATED
    
    
    RESTATEDCurrent:Federal
    
    $
    27,339
    
    
    $
    13,149
    
    
    $
    15,440State
    
    
    1,786
    
    
    
    873
    
    
    
    64929,125
    
    
    
    14,022
    
    
    
    16,089Deferred
    
    
    (8,759
    )
    
    
    3,069
    
    
    
    (647
    )$
    20,366
    
    
    $
    17,091
    
    
    $
    15,442
 45




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 11. INCOME TAXES (Continued)
  December 31,RESTATEDRESTATED
    
    
    (See Notes(See Note 4)
    
    
    3 and 4)2004
    
    
    2003Deferred income tax assets:Allowance for doubtful accounts
    
    $
    3,429
    
    
    $
    3,211Warranty-related reserves
    
    
    5,831
    
    
    
    3,599Insurance-related accruals
    
    
    6,761
    
    
    
    3,143Compensation and retirement-related accruals
    
    
    3,123
    
    
    
    2,555Lease accruals and related arrangements
    
    
    4,081
    
    
    
    2,665Deferred revenues
    
    
    2,961
    
    
    
    1,110Inventory
    
    
    2,481
    
    
    
    Foreign subsidiary basis difference
    
    
    1,874
    
    
    
    1,579Foreign subsidiary basis difference valuation allowance
    
    
    (650
    )
    
    
    (650
    )Capital loss carryover
    
    
    944
    
    
    
    Other deferred income tax assets
    
    
    1,773
    
    
    
    1,413Total deferred income tax assets
    
    $
    32,608
    
    
    $
    18,625Deferred income tax liabilities:Trademarks and intangible assets
    
    $
    11,430
    
    
    $
    7,632Accumulated depreciation
    
    
    6,405
    
    
    
    4,555Inventory
    
    
    
    
    
    
    1,118Other deferred income tax liabilities
    
    
    349
    
    
    
    196Total deferred income tax liabilities
    
    $
    18,184
    
    
    $
    13,501Net deferred income tax asset
    
    $
    14,424
    
    
    $
    5,124Balance sheet presentation:Current deferred income tax asset
    
    $
    24,790
    
    
    $
    12,987Noncurrent deferred income tax liability
    
    
    10,366
    
    
    
    7,863Net deferred income tax asset
    
    $
    14,424
    
    
    $
    5,124
 46




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 11. INCOME TAXES (Continued)
  2004
    
    2003
    
    2002Statutory U.S. Federal rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes
    
    
    1.5
    %
    
    
    1.2
    %
    
    
    2.2
    %Other
    
    
    -1.1
    %
    
    
    -0.7
    %
    
    
    0.0
    %Effective tax rate
    
    
    35.4
    %
    
    
    35.5
    %
    
    
    37.2
    %
   12. RETIREMENT PLANS
   47




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 12. RETIREMENT PLANS (Continued)
  2004
    
    
    2003Actuarial present value of projected benefit
obligations, at beginning of year
    
    $
    (5,261
    )
    
    $
    (5,894
    )Service cost
    
    
    (50
    )
    
    
    (50
    )Interest cost
    
    
    (328
    )
    
    
    (366
    )Actuarial loss
    
    
    (336
    )
    
    
    (60
    )Settlement gain
    
    
    516
    
    
    
    840Benefits paid
    
    
    94
    
    
    
    134Expenses paid
    
    
    82
    
    
    
    135Amendments and other
    
    
    
    
    
    
    Actuarial present value of projected benefit
obligations, at end of year
    
    
    (5,283
    )
    
    
    (5,261
    )Fair value of plan assets, at beginning of year
    
    
    4,343
    
    
    
    5,184Return on plan assets
    
    
    325
    
    
    
    459Employer contributions
    
    
    76
    
    
    
    Benefits and expenses paid
    
    
    (176
    )
    
    
    (269
    )Settlements
    
    
    (515
    )
    
    
    (1,031
    )Fair value of plan assets, at end of year
    
    
    4,053
    
    
    
    4,343Funded Status  plan assets under projected
benefit obligation, at end of year
    
    
    (1,230
    )
    
    
    (918
    )Unrecognized net loss from experience
different from that assumed
    
    
    902
    
    
    
    683Unrecognized prior service cost
    
    
    
    
    
    
    Accumulated pension liability adjustment
    
    
    (902
    )
    
    
    (683
    )Accrued benefit liability, at end of year
    
    $
    (1,230
    )
    
    $
    (918
    )
 48




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 12. RETIREMENT PLANS (Continued)
  2004
    
    
    2003
    
    
    2002Interest cost
    
    $
    328
    
    
    $
    366
    
    
    $
    383Service cost
    
    
    50
    
    
    
    50
    
    
    
    Expected return on plan assets
    
    
    (319
    )
    
    
    (376
    )
    
    
    (340
    )Net amortization, deferral and
settlement charges
    
    
    111
    
    
    
    109
    
    
    
    43$
    170
    
    
    $
    149
    
    
    $
    86
  Target
    
    Allocation
    
    AllocationAllocation
    
    Percentage
    
    Percentage2005
    
    2004
    
    2003Equity securities
    
    
    70.00
    %
    
    
    71.51
    %
    
    
    75.68
    %Debt securities
    
    
    30.00
    %
    
    
    28.04
    %
    
    
    21.88
    %Real estate
    
    
    3.50
    %
    
    
    0.00
    %
    
    
    0.00
    %Other
    
    
    5.00
    %
    
    
    0.45
    %
    
    
    2.44
    %Total
    
    
    
    
    
    
    100.00
    %
    
    
    100.00
    %
  Year ended December 31,
    
    Payment Amount2005
    
    $
    160,1872006
    
    
    271,1212007
    
    
    210,5202008
    
    
    262,5672009
    
    
    381,468Thereafter
    
    
    2,123,585
 49




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 12. RETIREMENT PLANS (Continued)
   13. STOCKHOLDERS EQUITY
    50




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 14. STOCK OPTION AND INCENTIVE PLANS
    WeightedAverageOption
    
    
    Option Price
    
    
    ExerciseShares
    
    
    Range
    
    
    PriceOutstanding at December 31, 2001
(1,113,628 exercisable)
    
    
    2,218,141
    
    
    $
    4.63  $12.13
    
    
    $
    7.53Granted in 2002
    
    
    539,490
    
    
    
    11.59    13.05
    
    
    
    13.03Exercised in 2002
    
    
    (501,673
    )
    
    
    4.69     12.13
    
    
    
    7.86Forfeited in 2002
    
    
    (34,723
    )
    
    
    4.69     13.05
    
    
    
    9.62Outstanding at December 31, 2002
(1,116,947 exercisable)
    
    
    2,221,235
    
    
    $
    4.63  $13.05
    
    
    $
    8.76Granted in 2003
    
    
    621,284
    
    
    
    12.62    29.70
    
    
    
    13.13Exercised in 2003
    
    
    (540,574
    )
    
    
    4.63     13.05
    
    
    
    8.57Forfeited in 2003
    
    
    (129,136
    )
    
    
    5.50     13.05
    
    
    
    11.32Outstanding at December 31, 2003
(1,117,383 exercisable)
    
    
    2,172,809
    
    
    $
    4.69  $29.70
    
    
    $
    9.91Granted in 2004
    
    
    393,723
    
    
    
    23.93   30.60
    
    
    
    27.89Exercised in 2004
    
    
    (402,369
    )
    
    
    4.69   16.00
    
    
    
    8.54Forfeited in 2004
    
    
    (51,394
    )
    
    
    5.75   27.90
    
    
    
    13.20Outstanding at December 31, 2004
(1,271,485 exercisable)
    
    
    2,112,769
    
    
    $
    4.69  $30.60
    
    
    $
    13.44
 51




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 14. STOCK OPTION AND INCENTIVE PLANS (Continued)
  Outstanding Options
    
    
    Exercisable OptionsWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    AverageOption
    
    
    Exercise
    
    
    Remaining
    
    
    Option
    
    
    ExerciseOption Price Range
    
    Shares
    
    
    Price
    
    
    Term
    
    
    Shares
    
    
    Price$4.69  $8.50
    
    
    597,165
    
    
    $
    6.23
    
    
    5.2 yrs
    
    
    597,165
    
    
    $
    6.23$8.51  $12.62
    
    
    739,133
    
    
    
    11.42
    
    
    6.9 yrs
    
    
    430,395
    
    
    
    10.56$12.63  $30.60
    
    
    776,471
    
    
    
    20.91
    
    
    8.1 yrs
    
    
    243,925
    
    
    
    13.462,112,769
    
    
    
    
    
    
    
    
    
    
    
    1,271,485
   15. FINANCIAL GUARANTEES AND CREDIT RISKS
  52




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 16. SEGMENT INFORMATION
   53




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 16. SEGMENT INFORMATION (Continued)
  Retail
    
    
    Wholesale
    
    
    TotalPeriod ended December 31, 2004 (Restated  See Notes 3 and 4)Total assets
    
    $
    579,682
    
    
    $
    285,071
    
    
    $
    864,753Operating results Net sales to external customers
    
    
    1,193,360
    
    
    
    662,058
    
    
    
    1,855,418EBITDA
    
    
    68,469
    
    
    
    35,405
    
    
    
    103,874Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    27,573Interest expense, net
    
    
    
    
    
    
    
    
    
    
    18,739Income before income taxes
    
    
    
    
    
    
    
    
    
    
    57,562Period ended December 31, 2003 (Restated  See Notes 3 and 4)Total assets
    
    $
    508,837
    
    
    $
    265,472
    
    
    $
    774,309Operating results Net sales to external customers
    
    
    734,073
    
    
    
    584,458
    
    
    
    1,318,531EBITDA
    
    
    49,668
    
    
    
    27,458
    
    
    
    77,126Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    18,245Interest expense, net
    
    
    
    
    
    
    
    
    
    
    10,409Income before income taxes and the cumulative
effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    48,472Period ended December 31, 2002 (Restated  See Notes 3 and 4)Total assets
    
    $
    236,694
    
    
    $
    236,392
    
    
    $
    473,086Operating results Net sales to external customers
    
    
    511,925
    
    
    
    597,738
    
    
    
    1,109,663EBITDA
    
    
    32,893
    
    
    
    30,044
    
    
    
    62,937Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    12,689Interest expense, net
    
    
    
    
    
    
    
    
    
    
    8,703Income before income taxes
    
    
    
    
    
    
    
    
    
    
    41,545
 54




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 17. VARIABLE INTEREST ENTITIES
  18. CONSIDERATION RECEIVED FROM A VENDOR
   55




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##### Table of Contents



TBC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
 18. CONSIDERATION RECEIVED FROM A VENDOR (CONTINUED)
  19. ASSET RETIREMENT OBLIGATIONS
   2004
    
    
    2003Asset retirement obligation, January 1
    
    $
    921
    
    
    $
    Cumulative effect of change in accounting principle
    
    
    
    
    
    
    313Asset retirement obligation incurred during the period
    
    
    12Asset retirement obligation settled during the period
    
    
    
    
    
    
    Accretion expense
    
    
    69
    
    
    
    46Asset retirement obligation, December 31, 2004
    
    $
    1,002
    
    
    $
    359
 20. LEGAL PROCEEDINGS
  56




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##### Table of Contents



SUPPLEMENTARY DATA :
 QUARTERLY FINANCIAL INFORMATION
  (In thousands, except per share amounts)First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    FullQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Year2004 (Restated  See Note 4)Net sales
    
    $
    433,841
    
    
    $
    456,490
    
    
    $
    476,464
    
    
    $
    488,623
    
    
    $
    1,855,418Gross profit
    
    
    161,866
    
    
    
    175,201
    
    
    
    175,251
    
    
    
    182,476
    
    
    
    694,794Net income
    
    
    5,400
    
    
    
    9,031
    
    
    
    10,820
    
    
    
    11,945
    
    
    
    37,196Earnings per
share Basic
    
    $
    0.24
    
    
    $
    0.41
    
    
    $
    0.49
    
    
    $
    0.54
    
    
    $
    1.68Diluted
    
    $
    0.23
    
    
    $
    0.39
    
    
    $
    0.47
    
    
    $
    0.51
    
    
    $
    1.602003 (Restated  See Note 4)Net sales
    
    $
    256,545
    
    
    $
    328,843
    
    
    $
    362,401
    
    
    $
    370,742
    
    
    $
    1,318,531Gross profit
    
    
    74,992
    
    
    
    108,856
    
    
    
    114,653
    
    
    
    135,385
    
    
    
    433,886Income before cumulative
effect of change in
accounting principle
    
    
    4,444
    
    
    
    7,750
    
    
    
    9,798
    
    
    
    9,266
    
    
    
    31,258Cumulative effect of change
in accounting principle, net
    
    
    (190
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (190
    )Net income
    
    
    4,254
    
    
    
    7,750
    
    
    
    9,798
    
    
    
    9,266
    
    
    
    31,068Basic earning per share before
cumulative effect of change
in accounting principle
    
    $
    0.21
    
    
    $
    0.36
    
    
    $
    0.45
    
    
    $
    0.42
    
    
    $
    1.44Basic earning per share
    
    $
    0.21
    
    
    $
    0.36
    
    
    $
    0.45
    
    
    $
    0.42
    
    
    $
    1.44Diluted earning per share
before cumulative effect
of change in accounting
principle
    
    $
    0.20
    
    
    $
    0.34
    
    
    $
    0.43
    
    
    $
    0.40
    
    
    $
    1.37Diluted earning per share
    
    $
    0.20
    
    
    $
    0.34
    
    
    $
    0.43
    
    
    $
    0.40
    
    
    $
    1.37
 57




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##### Table of Contents



QUARTERLY FINANCIAL INFORMATION (CONTINUED)
  (In thousands, except per share amounts)First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    FullQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Year2004Net sales
    
    $
    433,841
    
    
    $
    456,490
    
    
    $
    476,464
    
    
    $
    488,623
    
    
    $
    1,855,418Gross profit
    
    
    161,866
    
    
    
    175,201
    
    
    
    175,251
    
    
    
    182,476
    
    
    
    694,794Net income
    
    
    5,499
    
    
    
    9,131
    
    
    
    10,922
    
    
    
    12,046
    
    
    
    37,598Earnings per share -Basic
    
    $
    0.25
    
    
    $
    0.41
    
    
    $
    0.49
    
    
    $
    0.54
    
    
    $
    1.69Diluted
    
    $
    0.24
    
    
    $
    0.39
    
    
    $
    0.47
    
    
    $
    0.52
    
    
    $
    1.622003Net sales
    
    $
    256,545
    
    
    $
    328,843
    
    
    $
    362,401
    
    
    $
    370,742
    
    
    $
    1,318,531Gross profit
    
    
    74,992
    
    
    
    108,856
    
    
    
    114,653
    
    
    
    135,385
    
    
    
    433,886Net income
    
    
    4,611
    
    
    
    7,976
    
    
    
    10,020
    
    
    
    9,578
    
    
    
    32,185Earnings per share -Basic
    
    $
    0.22
    
    
    $
    0.37
    
    
    $
    0.46
    
    
    $
    0.44
    
    
    $
    1.49Diluted
    
    $
    0.21
    
    
    $
    0.35
    
    
    $
    0.44
    
    
    $
    0.41
    
    
    $
    1.42
 58




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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
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
     Managements Consideration of the Restatement
  59




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 Item 9B. OTHER INFORMATION
  60




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##### Table of Contents



PART III
 
 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  
 Item 11. EXECUTIVE COMPENSATION
  
 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 Equity Compensation Plan Information
  Number ofshares remainingavailable for futureNumber of
    
    
    
    
    
    
    issuance under equityshares to be issued
    
    
    Weighted average
    
    
    compensation plansupon exercise of
    
    
    exercise price of
    
    
    (excluding shares inoutstanding options
    
    
    outstanding options
    
    
    column (a) )Plan category
    
    ( a )
    
    
    ( b )
    
    
    ( c )Equity compensation
plans approved by
stockholders
    
    
    2,112,769
    
    
    $
    13.44
    
    
    
    2,070,272Equity compensation
plans not approved
by stockholders
    
    
    
    
    
    
    
    
    
    
    
 Note:
    
    The above number of shares to be issued upon
exercise of outstanding options does not
include 61,968 outstanding tandem options
issued to directors in conjunction with 15,492
outstanding shares of restricted stock. One
share of restricted stock would be forfeited
for every four tandem options exercised.
  61




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##### Table of Contents



Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  62




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##### Table of Contents



PART IV
 
 Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    (1)
    
    FINANCIAL STATEMENTSThe following items, including consolidated financial statements of the Company, are set forth at Item 8 of this
Report:Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets  December 31, 2004, and 2003Consolidated Statements of Income  Years ended December 31, 2004, 2003 and 2002Consolidated Statements of Stockholders Equity  Years ended December 31, 2004, 2003 and 2002Consolidated Statements of Cash Flows  Years ended December 31, 2004, 2003 and 2002Notes to Consolidated Financial Statements(a)
    
    (2)
    
    FINANCIAL STATEMENT SCHEDULESSchedule II  Valuation and qualifying accounts.All other schedules are omitted because they are not applicable, or not required, or because the required
information is included in the consolidated financial statements or notes thereto.(a)
    
    (3)
    
    EXHIBITS  See Index to Exhibits included at p. 65 of this Report
 (b)
    
    During the quarter ended December 31, 2004, the Company filed the
following reports on Form 8-K:
 (1)
    
    A Form 8-K dated October 4, 2004, was filed in which TBC
Corporation issued a press release commenting on the impact of the recent
hurricanes and schedules its third quarter 2004 conference call.(2)
    
    A Form 8-K dated October 25, 2004, was filed in which TBC
Corporation issued a press release reporting its financial results for the
three and nine months ended September 30, 2004.(3)
    
    A Form 8-K dated November 19, 2004, was filed in which TBC Corporation
issued a press release commenting that it completed a corporate
reorganization to implement a holding company structure.
 
 SIGNATURES
  TBC CORPORATIONBy:
    
    /s/ LAWRENCE C. DAYLawrence C. DayPresident and Chief Executive OfficerDate: August  26, 2005
 63




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##### Table of Contents



Name
    
    Title
    
    Date/s/ LAWRENCE C. DAY

Lawrence C. Day
    
    President, Chief Executive Officer
and Director
    
    August 26, 2005/s/ THOMAS W. GARVEY

Thomas W. Garvey
    
    Executive Vice President and
Chief Financial Officer (principal
financial and accounting officer)
    
    August 26, 2005Chairman of the Board of Directors
    
    ___, 2005Marvin E. BruceDirector
    
    ___, 2005Michael E. DunlapDirector
    
    ___, 2005Charles A. Ledsinger, Jr.* WILLIAM J. McCARTHY

William J. McCarthy
    
    Director
    
    August 26, 2005* RICHARD A. McSTAY

Richard A. McStay
    
    Director
    
    August 26, 2005* DONALD RATAJCZAK
Donald Ratajczak
    
    Director
    
    August 26, 2005* ROBERT R. SCHOEBERL

Robert R. Schoeberl
    
    Director
    
    August 26, 2005Director
    
    ___, 2005Raymond E. Schultz
  /s/ LAWRENCE C.
DAY               

Lawrence C. DayAttorney-in-Fact
 64




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##### Table of Contents



TBC CORPORATION
 SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
 FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
 (In thousands)
 AdditionsCharged
    
    
    Chargedto Costs
    
    
    toBalance
    
    
    and
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BalanceJanuary 1,
    
    
    Expenses
    
    
    Accounts
    
    
    
    
    
    
    Deductions
    
    
    
    
    
    
    December 31,2004Warranty reserve
    
    $
    29,394
    
    
    $
    3,420
    
    
    $
    61
    
    
    
    
    
    
    $
    7,208
    
    
    
    
    
    
    $
    25,667Allowance for
doubtful accounts
    
    
    8,260
    
    
    
    4,322
    
    
    
    (646
    )
    
    
    
    
    
    
    2,629
    
    
    
    (3)
    
    
    
    9,307Deferred tax asset valuation allowance
    
    
    650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6502003Warranty reserve
    
    
    10,997
    
    
    
    3,750
    
    
    
    20,140
    
    
    
    (1)
    
    
    
    5,493
    
    
    
    (2)
    
    
    $
    29,394Allowance for
doubtful accounts
    
    
    8,701
    
    
    
    4,267
    
    
    
    83
    
    
    
    (1)
    
    
    
    4,791
    
    
    
    (3)
    
    
    
    8,260Deferred tax asset valuation allowance
    
    
    700
    
    
    
    (50
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6502002Warranty reserve
    
    
    8,762
    
    
    
    7,854
    
    
    
    
    
    
    
    (1)
    
    
    
    5,619
    
    
    
    (2)
    
    
    $
    10,997Allowance for
doubtful accounts
    
    
    7,737
    
    
    
    2,861
    
    
    
    
    
    
    
    (1)
    
    
    
    1,897
    
    
    
    (3)
    
    
    
    8,701Deferred tax asset valuation allowance
    
    
    100
    
    
    
    600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    700
 
 (1)
    
    Includes amounts for Merchants, Incorporated and NTW Incorporated as of the dates
of their acquisition by TBC Corporation during 2003.(2)
    
    Amounts added during current year and payable at year end less amount payable at
beginning of year.(3)
    
    Accounts written off during year, net of recoveries. 65




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##### Table of Contents



INDEX TO EXHIBITS
 Located atManuallyNumbered Page(2)
    
    PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT,
LIQUIDATION OR SUCCESSION:2.1
    
    Stock Purchase Agreement, dated March 25, 2003, by and among TBC
Corporation, Linda Merchant Bell, Carol Merchant Kirby, and Wilson C.
Merchant III was filed as Exhibit 2.1 to the TBC Corporation Current Report on
Form 8-K dated April 1, 2003
    
    *2.2
    
    Stock Purchase Agreement, dated as of September 21, 2003, by and between
TBC Corporation and Sears, Roebuck and Co., was filed as Exhibit 2.1 to the
TBC Corporation Quarterly Report on Form 10-Q for the quarter ended
September 30, 2003.
    
    *2.3
    
    First Amendment, dated as of November 28, 2003, to Stock Purchase Agreement,
dated September 21, 2003, by and between TBC Corporation and Sears, Roebuck
& Co. was filed as Exhibit 2.2 to the TBC Corporation Current Report on Form
8-K dated November 29, 2003.
    
    *2.4
    
    Agreement and Plan of Merger, dated November 19, 2004, among
TBC Corporation, TBC Parent Holding Corp., and TBC Merger Corp.
was filed as Exhibit 2.1 to the TBC Corporation Current Report
on Form 8-K dated November 19, 2004.
    
    *(3)(i)
    
    ARTICLES OF INCORPORATION:3(i).1
    
    Certificate of Incorporation of TBC Corporation (formerly named TBC Parent
Holding Corp.) was filed as Exhibit 3(i).1 to the TBC Corporation Current
Report on Form 8-K dated November 19, 2004.
    
    *(3)(ii)
    
    BYLAWS:3(ii).1
    
    ByLaws of TBC Corporation (formerly named TBC Parent Holding
Corp.) were filed as Exhibit 3(ii).1 to the TBC Corporation Current
Report on Form 8-K dated November 19, 2004.
    
    *(4)
    
    INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES:4.1
    
    Amended and Restated Rights Agreement, dated as of July 23, 1998, between
TBC Corporation and BankBoston, N.A., as Rights Agent, including as Exhibit A
thereto the form of Rights Certificate, was filed as Exhibit 4.1 to the TBC
Corporation Form 8-A/A-1 Registration Statement filed with the Commission
on July 30, 1998.
    
    *4.2
    
    Second Amended and Restated Credit Agreement, dated as of November
19, 2004, among TBC Corporation, TBC Private Brands, Inc.,
the Lenders party thereto, U.S. Bank National Association,
as Documentation Agent, SunTrust Bank, as Syndication Agent, First
Tennessee Bank National Association, as Administrative Agent, and JP Morgan
Chase Bank, as Co-Administrative Agent, was filed as Exhibit 4.1 the TBC
 66




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##### Table of Contents



Located atManuallyNumbered PageCorporation Current Report on Form 8-K dated November 19, 2004.
    
    *4.3
    
    Second Amended and Restated Note Agreement, dated as of April 1, 2003,
between TBC Corporation and The Prudential Insurance Company of America,
was filed as Exhibit 4.2 to the TBC Corporation Current Report on Form 8-K
dated April 1, 2003.
    
    *4.4
    
    Amendment No. 1, dated as of November 29, 2003, to Second Amended and
Restated Note Agreement, dated as of April 1, 2003, between TBC Corporation
and The Prudential Insurance Company of America, including as Exhibits B and
C thereto the amended form of Variable Rate Senior Notes issued thereunder,
was filed as Exhibit 4.2 to the TBC Corporation Current Report on Form 8-K
dated November 29, 2003.
    
    *4.5
    
    Amendment No. 2, dated as of November 19, 2004, among TBC Corporation,
TBC Private Brands, Inc., and The Prudential Insurance Company of America,
to Second Amended and Restated Note Agreement, dated as of April 1, 2003
and amended by Amendment No. 1, dated as of November 29, 2003, was
filed as Exhibit 4.3 to the TBC Corporation Current Report on Form 8-K
dated November 19, 2004.
    
    *4.6
    
    Note Purchase Agreement, dated as of April 1, 2003, among TBC Corporation,
The Prudential Insurance Company of America, and certain of its affiliates,
managed funds, and accounts purchasing Notes thereunder, including as Exhibit
1 thereto the form of Senior Secured Note evidencing the Series D Variable Rate
Senior Secured Notes in the aggregate principal amount of $50,000,000 issued
thereunder, was filed as Exhibit 4.3 to the TBC Corporation Current Report on
Form 8-K dated April 1, 2003.
    
    *4.7
    
    Amendment No. 1, dated as of November 29, 2003, to Note Purchase Agreement,
dated as of April 1, 2003, among TBC Corporation, The Prudential Insurance
Company of America, and certain of its affiliates, managed funds, and accounts
purchasing Notes thereunder, was filed as Exhibit 4.3 to the TBC Corporation
Current Report on Form 8-K dated November 29, 2003.
    
    *4.8
    
    Amendment No. 2, dated as of November 19, 2004, among TBC Corporation,
TBC Private Brands, Inc., and the Noteholders party thereto, to Note
Purchase Agreement, dated as of April 1, 2003 and amended by Amendment
No. 1, dated as of November 29, 2003, was filed as Exhibit 4.4 to the
TBC Corporation Current Report on Form 8-K dated November 19, 2004.
    
    *4.9
    
    Form of Deed of Trust, Assignment of Leases and Security Agreement, dated
March 31, 2003, executed by TBC Corporation in favor of JP Morgan Chase
Bank, as Collateral Agent and beneficiary, was filed as Exhibit 4.4 to the TBC
Corporation Current Report on Form 8-K dated April 1, 2003.
    
    *4.10
    
    Amendment No. 1, dated November 29, 2003, to Deed of Trust, Assignment of
Leases and Security Agreement, dated as of March 31, 2003, executed by TBC
Corporation in favor of JP Morgan Chase Bank, as Collateral Agent and
Beneficiary, was filed as Exhibit 4.4 to the TBC Corporation Current Report on
Form 8-K dated November 29, 2003.
    
    *4.11
    
    Guarantee and Collateral Agreement, dated as of March 31, 2003, executed by
TBC Corporation and the subsidiaries of TBC Corporation in favor of JPMorgan
Chase Bank, as Collateral Agent, was filed as Exhibit 4.5 to the TBC Corporation
Current Report on Form 8-K dated November 29, 2003.
    
    *
 67




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##### Table of Contents



Located atManuallyNumbered Page4.12
    
    First Amendment, dated November 29, 2003, to Guarantee and Collateral
Agreement, dated as of March 31, 2003, executed by TBC Corporation and the
subsidiaries of TBC Corporation in favor of JPMorgan Chase Bank, as Collateral
Agent, was filed as Exhibit 4.6 to the TBC Corporation Current Report on Form
8-K dated November 29, 2003.
    
    *4.13
    
    Assumption Agreement, dated as of November 19, 2004, between TBC
Corporation (formerly known as TBC Parent Holding Corp.) and JPMorgan
Chase Bank, as Collateral Agent, was filed as Exhibit 4.2 to the TBC Corporation
Current Report on Form 8-K dated November 19, 2004.
    
    *4.14
    
    Intercreditor Agreement, dated as of March 31, 2003, among various secured
lenders to TBC Corporation, was filed as Exhibit 4.7 to the TBC Corporation
Current Report on Form 8-K dated November 29, 2003.
    
    *4.15
    
    First Amendment, dated as of November 29, 2003, to Intercreditor Agreement,
dated March 31, 2003, among various secured lenders to TBC Corporation, was
filed as Exhibit 4.8 to the TBC Corporation Current Report on Form 8-K dated
November 29, 2003.
    
    *4.16
    
    Other long-term debt instruments.
    
    #(10)
    
    MATERIAL CONTRACTS:Management Contracts and Compensatory Plans or Arrangements10.1
    
    Form of Trust Agreement (between the Company and certain executive officers -
1/1/98 version) was filed as Exhibit 10.1 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 2003.
    
    *10.2
    
    TBC Corporation 2000 Stock Option Plan was filed as Exhibit 4.3 to the TBC
Corporation Registration Statement on Form S-8 (Reg. No. 333-48802) filed on
October 27, 2000.
    
    *10.3
    
    TBC Corporation 1989 Stock Incentive Plan, as amended and restated August 9,
2002, was filed as Exhibit 10.1 to the TBC Corporation Quarterly Report on Form
10-Q for the quarter ended September 30, 2002.
    
    *10.4
    
    TBC Corporation 2004 Incentive Plan was filed as Exhibit 10.1 to the TBC
Corporation Quarterly Report on Form 10-Q for the quarter ended
March 31, 2004.
    
    *10.5
    
    Form of Restricted Share Grants to Executive Officers under the TBC Corporation
1989 Stock Incentive Plan was filed as Exhibit 10.2 to the TBC Corporation
Quarterly Report on Form 10-Q for the quarter ended September 30, 2004.
    
    *10.6
    
    Form of Incentive Stock Options Granted to Executive Officers under the TBC
Corporation 1989 Stock Incentive Plan was filed as Exhibit 10.3 to the TBC
Corporation Quarterly Report on Form 10-Q for the quarter ended September 30,
2004.
    
    *10.7
    
    Form of Nonqualified Stock Options Granted to Executive Officers under the TBC
Corporation 1989 Stock Incentive Plan was filed as Exhibit 10.4 to the TBC
Corporation Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004.
    
    *10.8
    
    Form of Incentive Stock Options, Including Reload Feature, Granted to Executive
 68




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##### Table of Contents



Located atManuallyNumbered PageOfficers under the TBC Corporation 2000 Stock Option Plan was filed as
Exhibit 10.5 to the TBC Corporation Quarterly Report on Form 10-Q for the
quarter ended September 30, 2004.
    
    *10.9
    
    Form of Nonqualified Stock Options, Including Reload Feature, Granted to Executive
Officers under the TBC Corporation 2000 Stock Option Plan was filed as Exhibit 10.6
to the TBC Corporation Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004.
    
    *10.10
    
    Form of Stock Options, Including Reload Feature, Granted to Executive Officers
under the TBC Corporation 2000 Stock Option Plan was filed as Exhibit 10.7 to
the TBC Corporation Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004.
    
    *10.11
    
    Form of Stock Options Granted to Executive Officers under the TBC Corporation
2004 Incentive Plan was filed as Exhibit 10.2 to the TBC Corporation Current
Report on Form 8-K dated March 1, 2005.
    
    *10.12
    
    Executive Employment Agreement between the Company and Lawrence C. Day,
amended and restated as of September 1, 2002 (without Exhibit A thereto, which is
substantially identical to the form of Trust Agreement referenced in Exhibit 10.1),
was filed as Exhibit 10.2 to the TBC Corporation Quarterly Report on Form 10-Q
for the quarter ended September 30, 2002.
    
    *10.13
    
    Executive Employment Agreement, dated as of October 31, 2000, between the
Company and Kenneth P. Dick (without Exhibit A thereto, which is substantially
identical to the form of Trust Agreement referenced in Exhibit 10.1), was filed as
Exhibit 10.7 to the TBC Corporation Annual Report on Form 10-K for the year
ended December 31, 2000.
    
    *10.14
    
    Executive Employment Agreement, dated as of January 19, 2001, between the
Company and Thomas W. Garvey (without Exhibit A thereto, which is
substantially identical to the form of Trust Agreement referenced in Exhibit 10.1),
was filed as Exhibit 10.1 to the TBC Corporation Quarterly Report on Form 10-Q
for the quarter ended March 31, 2001.
    
    *10.15
    
    Employment Agreement, dated as of May 8, 2000, between TBC Corporation
and Orland Wolford, together with Assignment and Assumption, effective as of
June 5, 2000, between TBC Corporation and Tire Kingdom, Inc., was filed as
Exhibit 10.3 to the TBC Corporation Current Report on Form 8-K dated
March 1, 2005.
    
    *10.16
    
    TBC Corporation Deferred Compensation Plan for Directors (Effective January 1,
1989 and Amended Effective July 1, 1992 and March 2, 2005) was filed as Exhibit
10.1 to the TBC Corporation Current Report on Form 8-K dated March 1, 2005.
    
    *10.17
    
    TBC Corporation Management Incentive Compensation Plan, effective January 1,
1997, was filed as Exhibit 10.9 to the TBC Corporation Annual Report on Form
10-K for the year ended December 31, 2002.
    
    *10.18
    
    TBC Corporation Executive Supplemental Retirement Plan, as amended through
August 1, 1997, was filed as Exhibit 10.10 to the TBC Corporation Annual Report
on Form 10-K for the year ended December 31, 2002.
    
    *10.19
    
    TBC Corporation Executive Retirement Plan was filed as Exhibit 10.11
to the TBC Corporation Annual Report on Form 10-K for the year
ended December 31, 2003.
    
    *
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Located atManuallyNumbered Page10.20
    
    TBC Corporation Executive Deferred Compensation Plan, effective August 1,
1999.
    
    **10.21
    
    TBC Corporation Long Term Incentive Plan, effective January 1, 2002, was filed
as Exhibit 10.1 to the TBC Corporation Quarterly Report on Form 10-Q for the
quarter ended March 31, 2002.
    
    *10.22
    
    Resolutions establishing fees payable to directors of TBC Corporation, as adopted
by TBC Corporation Board of Directors on August 9, 2002, were filed as Exhibit
10.14 to the TBC Corporation Annual Report on Form 10-K for the year ended
December 31, 2002.
    
    *10.23
    
    TBC Corporation Senior Executive Professional Services Reimbursement Program
was filed as Exhibit 10.1 to the TBC Quarterly Report on Form 10-Q for the
quarter ended June 30, 2003.
    
    *Other Material
Contracts10.24
    
    Transition Services Agreement, dated November 29, 2003, by and between TBC
Corporation and Sears, Roebuck & Co., was filed as Exhibit 10.1 to the TBC
Corporation Current Report on Form 8-K dated November 29, 2003.
    
    *10.25
    
    Purchase Agreement and Escrow Instructions, dated October 23, 2003, between
TBC Corporation and Realty Income Corporation or its assignee (including Crest
Net Lease, Inc. and Realty Income Texas Properties, L.P.), including as Exhibit B
thereto the form of Land and Building Lease Agreement to be executed by NTW
Incorporated, together with a schedule setting forth certain information with respect
to the leases so executed by NTW Incorporated, was filed as Exhibit 10.2 to the
TBC Corporation Current Report on Form 8-K dated November 29, 2003.
    
    *10.26
    
    Joinder Agreement, executed effective as of November 21, 2003, by TBC
Corporation in favor of Realty Income Corporation, Crest Net Lease, Inc., Realty
Income Texas Properties, L.P., and their successors and assigns, was filed as
Exhibit 10.3 to the TBC Corporation Current Report on Form 8-K dated
November 29, 2003.
    
    *10.27
    
    Form of TBC Corporations standard Distributor Agreement was filed as Exhibit
10.13 to the TBC Corporation Annual Report on Form 10-K for the year ended
December 31, 2000.
    
    *10.28
    
    Form of Franchise Agreement in use by Big O Tires, Inc. was filed as Exhibit
10.14 to the TBC Corporation Annual Report on Form 10-K for the year ended
December 31, 2001.
    
    *10.29
    
    Agreement, dated October 1, 1977, between TBC Corporation and The
Kelly-Springfield Tire Company, including letter dated June 30, 1978, was filed
as Exhibit 10.6 to TBC Corporation Registration statement on Form S-1, filed on
April 21, 1983 (Reg. No. 2-83116).
    
    *10.30
    
    Ten-Year Commitment Agreement, dated March 21, 1994, between the Company
and The Kelly-Springfield Tire Company, was filed as Exhibit 10.16 to the TBC
Corporation Annual Report on Form 10-K for the year ended December 31, 2000.
    
    *10.31
    
    Extension Agreement, dated November 4, 2003, between the Company and The
Goodyear Tire & Rubber Company was filed as Exhibit 10.23 to the TBC
Corporation Annual Report on Form 10-K for the year ended December 31, 2003.
    
    *
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Located atManuallyNumbered Page10.32
    
    Agreement, effective January 1, 1994, between the Company and Cooper Tire &
Rubber Company, was filed as Exhibit 10.17 to the TBC Corporation Annual
Report on Form 10-K for the year ended December 21, 2000.
    
    *10.33
    
    Amendment, effective May 17, 2000, to Agreement between the Company and
Cooper Tire & Rubber Company, was filed as Exhibit 10.1 to the TBC Corporation
Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.
    
    *10.34
    
    Agreement, effective January 1, 2002, between the Company and Cooper Tire &
Rubber Company, was filed as Exhibit 10.19 to the TBC Corporation Annual
Report on Form 10-K for the year ended December 31, 2001.
    
    *10.35
    
    2004-2005 Dealer Agreement, effective as of April 1, 2004, between TBC
Corporation and Michelin Americas Small Tires, a division of Michelin
North America, Inc., was filed as Exhibit 10.1 to the TBC Corporation
Quarterly Report on Form 10-Q for the quarter ended September 30, 2004.
    
    *(18)
    
    LETTER RE CHANGE IN ACCOUNTING PRINCIPLES:18.1
    
    Letter, dated July 22, 2004, from PricewaterhouseCoopers LLP was filed
as Exhibit 18.1 to the TBC Corporation Quarterly Report on Form 10-Q
for the quarter ended June 30, 2004.
    
    *(21)
    
    SUBSIDIARIES OF THE COMPANY:21.1
    
    List of the names and jurisdictions of incorporation of the subsidiaries of
the Company.
    
    **(23)
    
    CONSENTS OF EXPERTS AND COUNSEL:23.1
    
    Consent of PricewaterhouseCoopers LLP, Independent Registered Public,
Accounting Firm incorporation by reference of their reports dated April 27, 2005
Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 for
the Companys 1989 Stock Incentive Plan (Reg. No. 33-43166) and in the
Registration Statement on Form S-8 for the Companys 2000 Stock Option Plan
(Reg. No. 333-48802).
    
    **(24)
    
    POWER OF ATTORNEY:24.1
    
    Power of attorney of each person who signed this Annual Report on Form 10-K
on behalf of another pursuant to a power of attorney.
    
    **(31)
    
    RULE 13a  14(a)/15(d)-14(a) CERTIFICATIONS:31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer of TBC Corporation in
accordance with Section 302 of the Sarbanes-Oxley Act of 2002.
    
    **31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer of TBC Corporation in
accordance with Section 302 of the Sarbanes-Oxley Act of 2002.
    
    **(32)
    
    SECTION 1350 CERTIFICATIONS:32.1
    
    Section 1350 Certification of Chief Executive Officer of TBC Corporation in
accordance with Section 906 of the Sarbanes-Oxley Act of 2002.
    
    **32.2
    
    Section 1350 Certification of Chief Financial Officer of TBC Corporation in
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Located atManuallyNumbered Pageaccordance with Section 906 of the Sarbanes-Oxley Act of 2002.
    
    **
 
 *
    
    Indicates that the Exhibit is incorporated by reference into this Annual Report on
Form 10-K from a previous filing with the Commission.**
    
    Filed herewith.#
    
    With respect to any other instrument defining the rights of holders of long-term debt,
the amount of securities authorized under any such instrument does not exceed 10%
of the total assets of TBC Corporation and its subsidiaries on a consolidated basis.
A copy of any such instrument will be furnished to the Commission upon request. 72