What changed in this filing

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Item 1. Financial Statements

2021-06-11 compared with 2021-03-19 · 87 added, 147 removed, 350 unchanged (40% of the section changed)

21 unchanged sentences

Current portion of operating lease liabilities

Current portion of debt

Accrued expenses and other

1 unchanged sentence

Total current liabilities

Debt, less current portion

Long-term debt

Operating lease liabilities, less current portion

6 unchanged sentences

Common stock, par value $ .01 per share, authorized 200,000 shares;

22,796 shares issued and 22,183 shares outstanding as of February 13, 2021;

22,897 shares issued and 21,620 shares outstanding as of May 8, 2021;

23,697 shares issued and 23,376 shares outstanding as of August 29, 2020

5 unchanged sentences

Treasury stock, at cost

( 1,635,621 )

Total stockholders’ deficit

4 unchanged sentences

Twelve Weeks Ended

Twenty-Four Weeks Ended

Thirty-Six Weeks Ended

(in thousands, except per share data)

14 unchanged sentences

Twelve Weeks Ended

Twenty-Four Weeks Ended

Thirty-Six Weeks Ended

(in thousands)

Other comprehensive income:

Other comprehensive (loss) income:

Foreign currency translation adjustments

1 unchanged sentence

Net derivative activities, net of taxes

Total other comprehensive income

Total other comprehensive (loss) income

Comprehensive income

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Twenty-Four Weeks Ended

Thirty-Six Weeks Ended

(in thousands)

15 unchanged sentences

Proceeds from sale of marketable debt securities

(Payments) proceeds from disposal of capital assets and other, net

Investment in tax credit equity investments

Proceeds from disposal of capital assets and other, net

Net cash used in investing activities

Cash flows from financing activities:

Net proceeds from commercial paper

Net payments of commercial paper

( 1,030,000 )

Proceeds from issuance of debt

Repayment of debt

Net proceeds from sale of common stock

5 unchanged sentences

Effect of exchange rate changes on cash

Net decrease in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Twelve Weeks Ended February 13, 2021

Twelve Weeks Ended May 8, 2021

Comprehensive

(in thousands)

Balance at November 21, 2020

( 1,008,537 )

Balance at February 13, 2021

( 1,801,764 )

1 unchanged sentence

Total other comprehensive income

Retirement of treasury shares

( 1,139,173 )

Purchase of 663 shares of treasury stock

1 unchanged sentence

Share-based compensation expense

Balance at February 13, 2021

Balance at May 8, 2021

( 1,205,600 )

( 1,635,621 )

Twelve Weeks Ended February 15, 2020

( 1,763,392 )

Twelve Weeks Ended May 9, 2020

Comprehensive

(in thousands)

Balance at November 23, 2019

Balance at February 15, 2020

( 2,534,323 )

1 unchanged sentence

Total other comprehensive income

Retirement of treasury shares

( 1,878,595 )

Purchase of 156 shares of treasury stock

1 unchanged sentence

Share-based compensation expense

Balance at February 15, 2020

Balance at May 9, 2020

( 2,191,427 )

( 1,632,736 )

Twenty-Four Weeks Ended February 13, 2021

Thirty-Six Weeks Ended May 8, 2021

Comprehensive

10 unchanged sentences

Share-based compensation expense

Balance at February 13, 2021

Balance at May 8, 2021

( 1,205,600 )

( 1,635,621 )

Twenty-Four Weeks Ended February 15, 2020

( 1,763,392 )

Thirty-Six Weeks Ended May 9, 2020

Comprehensive

10 unchanged sentences

Share-based compensation expense

Balance at February 15, 2020

Balance at May 9, 2020

( 2,191,427 )

11 unchanged sentences

(“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 29, 2020.

Operating results for the twelve and twenty-four weeks ended February 13, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 28, 2021.

Operating results for the twelve and thirty-six weeks ended May 8, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 28, 2021.

Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks.

13 unchanged sentences

The adoption of this new guidance did not have a material impact on the Company's Condensed Consolidated Financial Statements and related disclosures.

The balance for allowance for uncollectable accounts was $ 11.2 million at February 13, 2021 and $ 10.0 million at August 29, 2020.

The balance for allowance for uncollectable accounts was $ 11.1 million at May 8, 2021 and $ 10.0 million at August 29, 2020.

Note B – Share-Based Payments

5 unchanged sentences

Stock Options:

The Company made stock option grants of 196,161 shares during the twenty-four week period ended February 13, 2021 and granted options to purchase 188,324 shares during the comparable prior year period.

The Company grants options to purchase common stock to certain of its employees under its plan at prices equal to the market value of the stock on the date of grant.

The Company made stock option grants of 196,520 shares during the thirty-six week period ended May 8, 2021 and granted options to purchase 188,324 shares during the comparable prior year period.

The Company grants options to purchase common stock to certain of its employees under its equity incentive plans at prices equal to the market value of the stock on the date of grant.

The fair value of each option is amortized into compensation expense on a straight-line basis between the grant date for the award and each vesting date.

The weighted average fair value of the stock option awards granted during the twenty-four week periods ended February 13, 2021 and February 15, 2020, using the Black-Scholes-Merton multiple-option pricing valuation model, was $ 299.86 and $ 252.39 per share, respectively, using the following weighted average key assumptions:

Twenty-Four Weeks Ended

The weighted average fair value of the stock option awards granted during the thirty-six week periods ended May 8, 2021 and May 9, 2020, using the Black-Scholes-Merton multiple-option pricing valuation model, was $ 299.99 and $ 252.39 per share, respectively, using the following weighted average key assumptions:

Thirty-Six Weeks Ended

Expected price volatility

3 unchanged sentences

Dividend yield

During the twenty-four week period ended February 13, 2021, 138,705 stock options were exercised at a weighted average exercise price of $ 484.13 .

During the thirty-six week period ended May 8, 2021, 239,177 stock options were exercised at a weighted average exercise price of $ 513.51 .

In the comparable prior year period, 121,236 stock options were exercised at a weighted average exercise price of $ 480.39 .

4 unchanged sentences

Grants of non-employee director restricted stock units are made and expensed on January 1 of each year, as they vest immediately.

As of February 13, 2021, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $ 13.3 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.9 years.

Transactions related to restricted stock units for the twenty-four weeks ended February 13, 2021 were as follows:

As of May 8, 2021, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $ 12.1 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.6 years.

Transactions related to restricted stock units for the thirty-six weeks ended May 8, 2021 were as follows:

Average Grant

2 unchanged sentences

Canceled or forfeited

Nonvested at February 13, 2021

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $ 13.7 million for the twelve week period ended February 13, 2021, and $ 12.1 million for the comparable prior year period.

Total share-based compensation expense was $ 24.2 million for the twenty-four week period ended February 13, 2021, and $ 22.1 million for the comparable prior year period.

For the twelve week period ended February 13, 2021, 196,280 stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive.

Nonvested at May 8, 2021

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $ 13.9 million for the twelve week period ended May 8, 2021, and $ 10.1 million for the comparable prior year period.

Total share-based compensation expense was $ 38.1 million for the thirty-six week period ended May 8, 2021, and $ 32.3 million for the comparable prior year period.

For the twelve week period ended May 8, 2021, 142,660 stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive.

For the comparable prior year period, 187,965 anti-dilutive shares were excluded from the dilutive earnings per share computation.

There were 248,578 anti-dilutive shares excluded from the diluted earnings per share computation for the twenty-four week period ended February 13, 2021, and 147,998 anti-dilutive shares excluded for the comparable prior year period.

See AutoZone’s Annual Report on Form 10-K for the year ended August 29, 2020, for a discussion regarding the methodology used in developing AutoZone’s assumptions to determine the fair value of the option awards and a description of AutoZone’s Amended and Restated 2011 Equity Incentive Award Plan and the 2020 Director Compensation Program.

There were 166,456 anti-dilutive shares excluded from the diluted earnings per share computation for the thirty-six week period ended May 8, 2021, and 161,321 anti-dilutive shares excluded for the comparable prior year period.

See AutoZone’s Annual Report on Form 10-K for the year ended August 29, 2020 and other filings with the SEC, for a discussion regarding the methodology used in developing AutoZone’s assumptions to determine the fair value of the option awards and a description of AutoZone’s Amended and Restated 2011 Equity Incentive Award Plan, the AutoZone, Inc.

2020 Omnibus Incentive Award Plan and the 2020 Director Compensation Program.

Note C – Fair Value Measurements

8 unchanged sentences

The Company’s marketable debt securities measured at fair value on a recurring basis were as follows:

February 13, 2021

(in thousands)

5 unchanged sentences

Other long-term assets

At February 13, 2021, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance Sheets consisted of short-term marketable debt securities, which are included within Other current assets, and long-term marketable debt securities, which are included in Other long-term assets.

At May 8, 2021, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance Sheets consisted of short-term marketable debt securities, which are included within Other current assets, and long-term marketable debt securities, which are included in Other long-term assets.

The Company’s marketable debt securities are typically valued at the closing price in the principal active market as of the last business day of the quarter or through the use of other market inputs relating to the securities, including benchmark yields and reported trades.

7 unchanged sentences

The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” The Company’s available-for-sale marketable debt securities consisted of the following:

February 13, 2021

(in thousands)

9 unchanged sentences

Asset-backed securities and other

The debt securities held at February 13, 2021, had effective maturities ranging from less than one year to approximately six years .

The debt securities held at May 8, 2021, had effective maturities ranging from less than one year to approximately four years .

At May 8, 2021, the Company held eight securities that are in an unrealized loss position of approximately $ 13 thousand.

In evaluating whether a credit loss exists for the securities, the Company considers factors such as the severity of the loss position, the credit worthiness of the investee, the term to maturity and the intent and ability to hold the investments until maturity or until recovery of fair value.

2 unchanged sentences

Note E – Derivative Financial Instruments

At February 13, 2021, the Company had $ 29.5 million recorded in Accumulated other comprehensive loss related to realized losses associated with terminated interest rate swap and treasury rate lock derivatives, which were designated as hedging instruments.

At May 8, 2021, the Company had $ 28.6 million recorded in Accumulated other comprehensive loss related to realized losses associated with terminated interest rate swap and treasury rate lock derivatives, which were designated as hedging instruments.

Net losses are amortized into Interest expense over the remaining life of the associated debt.

During the twelve week periods ended February 13, 2021 and February 15, 2020, the Company reclassified $ 863 thousand and $ 508 thousand of net losses from Accumulated other comprehensive loss to Interest expense, respectively.

During the twenty-four week period ended February 13, 2021 and the comparable prior year period, the Company reclassified $ 1.7 million and $ 1.0 million of net losses from Accumulated other comprehensive loss to Interest expense, respectively.

The Company expects to reclassify $ 3.7 million of net losses from Accumulated other comprehensive loss to Interest expense over the next 13 periods.

During the twelve week periods ended May 8, 2021 and May 9, 2020, the Company reclassified $ 863 thousand and $ 509 thousand of net losses from Accumulated other comprehensive loss to Interest expense, respectively.

During the thirty-six week period ended May 8, 2021 and the comparable prior year period, the Company reclassified $ 2.6 million and $ 1.5 million of net losses from Accumulated other comprehensive loss to Interest expense, respectively.

The Company expects to reclassify $ 3.7 million of net losses from Accumulated other comprehensive loss to Interest expense over the next 12 months.

Note F – Merchandise Inventories

3 unchanged sentences

The Company’s policy is not to write up inventory in excess of replacement cost.

The difference between LIFO cost and replacement cost, which will be reduced upon experiencing price inflation on the Company’s merchandise purchases, was $ 363.3 million at February 13, 2021 and $ 357.0 million at August 29, 2020.

The difference between LIFO cost and replacement cost, which will be reduced upon experiencing price inflation on the Company’s merchandise purchases, was $ 363.7 million at May 8, 2021 and $ 357.0 million at August 29, 2020.

Note G – Financing

14 unchanged sentences

Total debt before discounts and debt issuance costs

Current portion of debt

Discounts and debt issuance costs

Debt, less current portion

As of February 13, 2021, the $ 250 million 2.500 % Senior Notes due April 2021 are classified as current in the accompanying Condensed Consolidated Balance Sheets.

Long-term debt

On March 15, 2021, the Company repaid the $ 250 million 2.500 % Senior Notes due April 2021, which were callable at par in March 2021.

As of February 13, 2021, the Company had $ 2.748 billion of availability under its $ 2.750 billion revolving credit agreements, which would allow the Company to replace these short-term obligations with long-term financing facilities.

As of May 8, 2021, the $ 500 million 3.700 % Senior Notes due April 2022 are classified as long-term in the accompanying Condensed Consolidated Balance Sheets as the Company has the ability and intent to refinance them on a long-term basis through available capacity in its Revolving Credit Agreement.

A s of May 8, 2021, the Company had $ 1.998 billion of availability under its $ 2.0 billion Revolving Credit Agreement, which would allow the Company to replace these short-term obligations with long-term financing facilities.

The Company entered into a Master Extension, New Commitment and Amendment Agreement dated as of November 18, 2017 (the “Extension Amendment”) to the Third Amended and Restated Credit Agreement dated as of November 18, 2016, as amended, modified, extended or restated from time to time (the “Revolving Credit Agreement”).

7 unchanged sentences

Interest accrues on base rate loans as defined in the Revolving Credit Agreement.

On April 3, 2020, the Company entered into a 364-Day Credit Agreement (the “364-Day Credit Agreement”) to augment the Company’s access to liquidity due to current macroeconomic conditions, specifically the pandemic, and to supplement the Company’s existing Revolving Credit Agreement.

As of May 8, 2021, the Company had no outstanding borrowings and $ 1.7 million of outstanding letters of credit under the Revolving Credit Agreement.

Under the Company’s Revolving Credit Agreement, covenants include restrictions on liens, a maximum debt to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the repayment obligations under certain circumstances.

On April 3, 2020, the Company entered into a 364-Day Credit Agreement (the “364-Day Credit Agreement”) to supplement the Company’s existing Revolving Credit Agreement.

The 364-Day Credit Agreement provided for loans in the aggregate principal amount of up to $ 750 million.

The 364-Day Credit Agreement had a termination date of, and any amounts borrowed under the 364-Day Credit Agreement were due and payable on, on April 2, 2021.

The 364-Day Credit Agreement had a termination date of, and any amounts borrowed under the 364-Day Credit Agreement were due and payable on, April 2, 2021.

Revolving loans under the 364-Day Credit Agreement could be base rate loans, Eurodollar loans, or a combination of both, at the Company’s election.

Effective February 22, 2021, the Company terminated the 364-Day Credit Agreement dated as of April 3, 2020 between the Company as borrower, the banks party thereto, and U.S.

Bank National Association as administrative agent.

There were no borrowings outstanding under this revolving credit agreement.

The Company entered into this credit agreement to augment its access to liquidity due to macroeconomic conditions existing at the time, and the Company has determined the additional access to liquidity is no longer necessary.

As of February 13, 2021, the Company had no outstanding borrowings under either of the revolving credit agreements and $ 1.7 million of outstanding letters of credit under the Revolving Credit Agreement.

Under the Company’s revolving credit agreements, covenants include restrictions on liens, a maximum debt to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the repayment obligations under certain circumstances.

The fair value of the Company’s debt was estimated at $ 6.007 billion as of February 13, 2021, and $ 6.081 billion as of August 29, 2020, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2).

Such fair value is greater than the carrying value of debt by $ 490.9 million and $ 567.5 million at February 13, 2021 and August 29, 2020, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

Effective February 22, 2021, the Company terminated the 364-Day Credit Agreement.

There were no borrowings outstanding under the 364-Day Credit Agreement.

The Company entered into the 364-Day Credit Agreement to augment its access to liquidity due to macroeconomic conditions existing at the time, and the Company determined the additional access to liquidity was no longer necessary.

All Senior Notes are subject to an interest rate adjustment if the debt ratings assigned are downgraded (as defined in the agreements).

2 unchanged sentences

All of the repayment obligations under its borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs.

As of February 13, 2021, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements.

The fair value of the Company’s debt was estimated at $ 4.758 billion as of May 8, 2021, and $ 6.081 billion as of August 29, 2020, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2).

Such fair value is less than the carrying value of debt by $ 509.5 million and greater than the carrying value of debt by $ 567.5 million at May 8, 2021 and August 29, 2020, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

As of May 8, 2021, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements.

Note H – Stock Repurchase Program

From January 1, 1998 to February 13, 2021, the Company has repurchased a total of 149.0 million shares of its common stock at an aggregate cost of $ 23.932 billion, including 1.3 million shares of its common stock at an aggregate cost of $ 1.578 billion during the twenty-four week period ended February 13, 2021.

From January 1, 1998 to May 8, 2021, the Company has repurchased a total of 149.7 million shares of its common stock at an aggregate cost of $ 24.832 billion, including 2.0 million shares of its common stock at an aggregate cost of $ 2.478 billion during the thirty-six week period ended May 8, 2021.

On December 15, 2020, the Board voted to increase the repurchase authorization by $ 1.5 billion.

On March 23, 2021, the Board voted to increase the repurchase authorization by an additional $ 1.5 billion.

This raised the total value of shares authorized to be repurchased to $ 26.15 billion.

Considering the cumulative repurchases as of February 13, 2021, the Company had $ 717.6 million remaining under the Board’s authorization to repurchase its common stock.

During the twenty-four week period ended February 13, 2021, the Company retired 1.0 million shares of treasury stock which had previously been repurchased under the Company’s share repurchase program.

Considering the cumulative repurchases as of May 8, 2021, the Company had $ 1.318 billion remaining under the Board’s authorization to repurchase its common stock.

During the thirty-six week period ended May 8, 2021, the Company retired 1.0 million shares of treasury stock which had previously been repurchased under the Company’s share repurchase program.

The retirement increased Retained deficit by $ 1.139 billion and decreased Additional paid-in capital by $ 60.0 million.

During the comparable prior year period, the Company retired 1.9 million shares of treasury stock, which increased Retained deficit by $ 1.879 billion and decreased Additional paid-in capital by $ 99.7 million.

Subsequent to February 13, 2021, the Company has repurchased 169,396 shares of its common stock at an aggregate cost of $ 203.0 million.

Subsequent to May 8, 2021, the Company has repurchased 119,391 shares of its common stock at an aggregate cost of $ 174.8 million.

Note I – Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes foreign currency translation adjustments, activity for interest rate swaps and treasury rate locks that qualify as cash flow hedges and unrealized gains (losses) on available-for-sale debt securities.

Changes in Accumulated other comprehensive loss for the twelve week periods ended February 13, 2021 and February 15, 2020 consisted of the following:

Changes in Accumulated other comprehensive loss for the twelve week periods ended May 8, 2021 and May 9, 2020 consisted of the following:

(in thousands)

on Securities

Balance at November 21, 2020

Other comprehensive income (loss) before reclassifications (1)

Amounts reclassified from Accumulated other comprehensive loss

Balance at February 13, 2021

Other comprehensive (loss) before reclassifications (1)(2)

Amounts reclassified from Accumulated other comprehensive (loss) (1)(2)

Balance at May 8, 2021

(in thousands)

on Securities

Balance at November 23, 2019

Other comprehensive income before reclassifications

Amounts reclassified from Accumulated other comprehensive income (loss) (1)

Balance at February 15, 2020

Changes in Accumulated other comprehensive loss for the twenty-four week periods ended February 13, 2021 and February 15, 2020 consisted of the following:

Other comprehensive (loss) income before reclassifications (1)(2)

Amounts reclassified from Accumulated other comprehensive income (loss) (1)(2)

Balance at May 9, 2020

Changes in Accumulated other comprehensive loss for the thirty-six week periods ended May 8, 2021 and May 9, 2020 consisted of the following:

(in thousands)

2 unchanged sentences

Other comprehensive income (loss) before reclassifications (1)(2)

Amounts reclassified from Accumulated other comprehensive loss

Balance at February 13, 2021

Amounts reclassified from Accumulated other comprehensive (loss) income (1)(2)

Balance at May 8, 2021

(in thousands)

1 unchanged sentence

Balance at August 31, 2019

Other comprehensive income (loss) before reclassifications (1)

Amounts reclassified from Accumulated other comprehensive loss

Balance at February 15, 2020

Other comprehensive (loss) income before reclassifications (1)(2)

Amounts reclassified from Accumulated other comprehensive income (loss) (1)(2)

Balance at May 9, 2020

(1) Amounts in parentheses indicate debits to Accumulated other comprehensive loss.

(2) Amounts shown are net of taxes/tax benefits.

(3) Foreign currency is shown net of U.S.

4 unchanged sentences

subsidiaries are intended to be permanently reinvested .

(3) Amounts shown are net of taxes/tax benefits .

Note J – Litigation

1 unchanged sentence

While the resolution of these matters cannot be predicted with certainty, management does not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to the Company’s Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Cash Flows.

Note K – Leases

The Company’s leases primarily relate to its retail stores, distribution centers and vehicles under various non-callable leases.

Retail leases typically have initial terms of between one and 20 years, with one to six optional renewal periods of one to five years each.

Finance leases for vehicles typically have original terms between one and five years , and finance leases for real estate leases typically have terms of 20 or more years.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease-related assets and liabilities recorded on the Condensed Consolidated Balance Sheet are as follows:

(in thousands)

Classification

Operating lease right-of-use assets

Property and equipment

Total lease assets

Current portion of operating lease liabilities

Accrued expenses and other

Operating lease liabilities, less current portion

Other long-term liabilities

Total lease liabilities

Accumulated amortization related to finance lease assets was $ 99.9 million as of February 13, 2021 and $ 107.3 million as of August 29, 2020.

Lease costs for finance and operating leases for the twelve weeks ended February 13, 2021 are as follows:

Twelve Weeks Ended

(in thousands)

Statement of Income Location

Finance lease cost:

Amortization of lease assets

Depreciation and amortization

Interest on lease liabilities

Interest expense, net

Operating lease cost (1)

Selling, general and administrative expenses

Total lease cost

Lease costs for finance and operating leases for the twenty-four weeks ended February 13, 2021 are as follows:

Twenty-Four Weeks Ended

(in thousands)

Statement of Income Location

Finance lease cost:

Amortization of lease assets

Depreciation and amortization

Interest on lease liabilities

Interest expense, net

Operating lease cost (1)

Selling, general and administrative expenses

Total lease cost

(1) Includes short-term leases, variable lease costs and sublease income, which are immaterial.

The following table summarizes the Company’s lease term and discount rate assumptions:

Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be exercised:

Finance leases – real estate

Finance leases – vehicles

Operating leases

Weighted-average discount rate:

Finance leases – real estate

Finance leases – vehicles

Operating leases

The following table summarizes the other information related to the Company’s lease liabilities:

Twenty-Four Weeks Ended

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from operating leases

Leased assets obtained in exchange for new finance lease liabilities

Leased assets obtained in exchange for new operating lease liabilities

As of February 13, 2021, the Company has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability.

These leases have undiscounted future payments of approximately $ 23.7 million and $ 159.5 million for real estate and vehicles, respectively, and will commence when the Company obtains possession of the underlying leased asset.

Commencement dates are expected to be from fiscal 2021 to fiscal 2022 .

Note L – Segment Reporting

Note K – Segment Reporting

The Company’s operating segments (Domestic Auto Parts, Mexico and Brazil) are aggregated as one reportable segment:

9 unchanged sentences

Twelve Weeks Ended

Twenty-Four Weeks Ended

Thirty-Six Weeks Ended

(in thousands)

13 unchanged sentences

We have reviewed the accompanying condensed consolidated balance sheet of AutoZone, Inc.

(the Company) as of February 13, 2021, the related condensed consolidated statements of income, comprehensive income and stockholders’ deficit for the twelve and twenty-four week periods ended February 13, 2021 and February 15, 2020, the condensed consolidated statements of cash flows for the twenty-four week periods ended February 13, 2021 and February 15, 2020, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”).

(the Company) as of May 8, 2021, the related condensed consolidated statements of income, comprehensive income and stockholders’ deficit for the twelve and thirty-six week periods ended May 8, 2021 and May 9, 2020, the condensed consolidated statements of cash flows for the thirty-six week periods ended May 8, 2021 and May 9, 2020, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”).

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S.

13 unchanged sentences

Memphis, Tennessee

March 19, 2021

June 11, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements