What changed in this filing

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Item 1. Financial Statements

2023-03-17 compared with 2022-12-20 · 154 added, 70 removed, 299 unchanged (43% of the section changed)

33 unchanged sentences

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

20,794 shares issued and 18,797 shares outstanding as of November 19, 2022;

18,786 shares issued and 18,467 shares outstanding as of February 11, 2023;

20,732 shares issued and 19,126 shares outstanding as of August 27, 2022

2 unchanged sentences

( 4,471,842 )

( 1,330,067 )

Accumulated other comprehensive loss

1 unchanged sentence

( 3,262,769 )

Total stockholders’ deficit

6 unchanged sentences

Twelve Weeks Ended

Twenty-Four Weeks Ended

(in thousands, except per share data)

14 unchanged sentences

Twelve Weeks Ended

Twenty-Four Weeks Ended

(in thousands)

1 unchanged sentence

Foreign currency translation adjustments

Unrealized losses on marketable debt securities, net of taxes

Unrealized gains (losses) on marketable debt securities, net of taxes

Net derivative activities, net of taxes

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Twelve Weeks Ended

Twenty-Four Weeks Ended

(in thousands)

2 unchanged sentences

Depreciation and amortization of property and equipment

Other non-cash

Other non-cash charges

Amortization of debt origination fees

15 unchanged sentences

Net proceeds from commercial paper

Proceeds from issuance of debt

Repayment of debt

Net proceeds from sale of common stock

Purchase of treasury stock

( 1,799,997 )

( 2,459,995 )

Repayment of principal portion of finance lease liabilities

Net cash used in financing activities

( 1,859,900 )

Effect of exchange rate changes on cash

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Twelve Weeks Ended November 19, 2022

Twelve Weeks Ended February 11, 2023

Comprehensive

(in thousands)

Balance at November 19, 2022

( 4,162,767 )

( 3,837,923 )

Total other comprehensive income

Retirement of treasury shares

( 4,157,637 )

Purchase of 372 shares of treasury stock

Issuance of common stock under stock options and stock purchase plans

Share-based compensation expense

Balance at February 11, 2023

( 4,471,842 )

( 4,184,170 )

Twelve Weeks Ended February 12, 2022

Comprehensive

(in thousands)

Balance at November 20, 2021

( 3,435,617 )

( 2,124,750 )

Total other comprehensive income

Retirement of treasury shares

( 3,337,892 )

Purchase of 783 shares of treasury stock

( 1,559,998 )

Issuance of common stock under stock options and stock purchase plans

Share-based compensation expense

Balance at February 12, 2022

( 2,730,731 )

( 1,362,804 )

( 3,137,477 )

Twenty-Four Weeks Ended February 11, 2023

Comprehensive

(in thousands)

Balance at August 27, 2022

3 unchanged sentences

Total other comprehensive income

Retirement of treasury shares

( 4,157,637 )

Purchase of 764 shares of treasury stock

( 1,805,790 )

Issuance of common stock under stock options and stock purchase plans

Share-based compensation expense

Balance at November 19, 2022

Balance at February 11, 2023

( 4,471,842 )

( 4,184,170 )

Twelve Weeks Ended November 20, 2021

Twenty-Four Weeks Ended February 12, 2022

Comprehensive

4 unchanged sentences

Total other comprehensive loss

Retirement of treasury shares

( 3,337,892 )

Purchase of 1,298 shares of treasury stock

( 2,459,995 )

Issuance of common stock under stock options and stock purchase plans

Share-based compensation expense

Balance at November 20, 2021

Balance at February 12, 2022

( 2,730,731 )

( 1,362,804 )

( 3,137,477 )

See Notes to Condensed Consolidated Financial Statements.

9 unchanged sentences

(“AutoZone” or the “Company”) Annual Report on Form 10-K for the year ended August 27, 2022.

Operating results for the twelve weeks ended November 19, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 26, 2023.

Operating results for the twelve and twenty-four weeks ended February 11, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 26, 2023.

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.

7 unchanged sentences

In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50) .

The update requires that a buyer in a supplier finance program disclose sufficient qualitative and quantitative information about the program to allow a reader of the financial statements to understand the program’s nature, activity during the period, changes from period to period and the program’s potential magnitude.

ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those years, except for the disclosure of rollforward information which is effective for fiscal years beginning after December 15, 2023.

This ASU requires buyers in a supplier finance program to disclose sufficient qualitative and quantitative information about the program to allow a reader of the financial statements to understand the program’s nature, activity during the period, changes from period to period and the program’s potential magnitude.

This ASU is effective for all companies for fiscal years beginning after December 15, 2022, including interim periods within those years, and requires retrospective adoption.

Early adoption is permitted.

The Company will adopt this standard beginning with its first quarter ending November 18, 2023.

The Company is currently evaluating the new guidance to determine the impact the adoption will have on the Company's consolidated financial statements and related disclosures.

The Company is currently evaluating the new guidance to determine the impact the adoption will have on the Company’s disclosures.

Note B – Share-Based Payments

5 unchanged sentences

Stock Options:

The Company made stock option grants of 157,113 shares during the twelve week period ended November 19, 2022 and granted options to purchase 163,786 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 Company made stock option grants for 157,870 shares during the twenty-four week period ended February 11, 2023 and granted options to purchase 164,262 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 twelve week periods ended November 19, 2022 and November 20, 2021, using the Black-Scholes-Merton multiple-option pricing valuation model, was $ 760.82 and $ 462.80 per share, respectively, using the following weighted average key assumptions:

Twelve Weeks Ended

The weighted average fair value of the stock option awards granted during the twenty-four week periods ended February 11, 2023 and February 12, 2022, using the Black-Scholes-Merton multiple-option pricing valuation model, was $ 760.98 and $ 463.09 per share, respectively, using the following weighted average key assumptions:

Twenty-Four Weeks Ended

Expected price volatility

3 unchanged sentences

Dividend yield

During the twelve week period ended November 19, 2022, 57,092 stock options were exercised at a weighted average exercise price of $ 725.86 .

In the comparable prior year period, 47,705 stock options were exercised at a weighted average exercise price of $ 549.86 .

As of November 19, 2022, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $ 158.1 million, before income taxes, which we expect to recognize over an estimated weighted average period of 3.5 years.

During the twenty-four week period ended February 11, 2023, and the comparable prior year period, 96,080 and 123,216 stock options were exercised at a weighted average exercise price of $ 709.98 and $ 584.81 , respectively.

As of February 11, 2023, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $ 137.7 million, before income taxes, which we expect to recognize over an estimated weighted average period of 3.3 years.

Restricted Stock Units:

3 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 November 19, 2022, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $ 13.7 million, before income taxes, which we expect to recognize over an estimated weighted average period of 3.0 years.

Transactions related to restricted stock units for the twelve weeks ended November 19, 2022 were as follows:

As of February 11, 2023, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $ 11.7 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.8 years.

Transactions related to restricted stock units for the twenty-four weeks ended February 11, 2023 were as follows:

Average Grant

1 unchanged sentence

Nonvested at August 27, 2022

Nonvested at November 19, 2022

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $ 19.0 million for the twelve week period ended November 19, 2022, and $ 14.3 million for the comparable prior year period.

For the twelve week period ended November 19, 2022, 87,696 stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive.

For the comparable prior year period, 97,942 anti-dilutive stock options were excluded from the dilutive earnings per share computation.

Nonvested at February 11, 2023

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) for the twelve and twenty-four week periods ended February 11, 2023, was $ 23.4 million and $ 42.4 million, respectively.

For the comparable prior year periods, total share-based compensation expense was $ 16.4 million and $ 30.7 million, respectively.

For the twelve and twenty-four week periods ended February 11, 2023, 156,925 and 122,072 , respectively, stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive.

For the comparable prior year periods, 162,955 and 128,399 , respectively, anti-dilutive stock options were excluded from the dilutive earnings per share computation.

See AutoZone’s Annual Report on Form 10-K for the year ended August 27, 2022 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.

10 unchanged sentences

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

November 19, 2022

February 11, 2023

(in thousands)

5 unchanged sentences

Other long-term assets

At November 19, 2022, 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.

At February 11, 2023, 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 fair values of the marketable debt securities, by asset class, are described in “Note D – Marketable Debt Securities.”

2 unchanged sentences

The carrying amounts of these financial instruments approximate fair value because of their short maturities.

A discussion of the carrying values and fair values of the Company’s debt is included in “Note F – Financing.”

A discussion of the carrying values and fair values of the Company’s debt is included in “Note G – Financing.”

Note D – Marketable Debt Securities

2 unchanged sentences

The Company’s available-for-sale marketable debt securities consisted of the following:

November 19, 2022

February 11, 2023

(in thousands)

9 unchanged sentences

Asset-backed securities and other

The debt securities held at November 19, 2022, had effective maturities ranging from less than one year to approximately three years .

Securities maturing in less than one year totaled $ 51.8 million and $ 49.7 million at November 19, 2022 and August 27, 2022, respectively.

Securities maturing between one and three years totaled $ 67.0 million and $ 62.8 million at November 19, 2022 and August 27, 2022, respectively.

At November 19, 2022, the Company held 75 securities that are in an unrealized loss position of approximately $ 3.6 million.

The debt securities held at February 11, 2023, had effective maturities ranging from less than one year to approximately three years .

Securities maturing in less than one year totaled $ 62.5 million and $ 49.7 million at February 11, 2023 and August 27, 2022, respectively.

Securities maturing between one and three years totaled $ 60.5 million and $ 62.8 million at February 11, 2023 and August 27, 2022, respectively.

At February 11, 2023, the Company held 70 securities that are in an unrealized loss position of approximately $ 2.9 million.

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.

1 unchanged sentence

Included above in total available-for-sale marketable debt securities are $ 103.7 million of marketable debt securities transferred by the Company’s insurance captive to a trust account to secure its obligations to an insurance company related to future workers’ compensation and casualty losses.

Note E – Merchandise Inventories

Note E – Derivative Financial Instruments

During the second quarter of fiscal 2023, the Company entered into two treasury rate locks designated as cash flow hedges used to manage our exposure to interest rate volatility associated with anticipated debt financing, each with a notional amount of $ 250 million.

The treasury rate locks had fixed rates of 3.45 % and 3.38 % benchmarked based on the 5-year and the 10-year U.S.

treasury notes, respectively.

These locks expired on January 27, 2023 and resulted in gains of $ 1.9 million and $ 2.9 million, respectively, which have been deferred in Accumulated other comprehensive loss and will be reclassified to Interest expense over the life of the underlying debt.

The hedges remained highly effective until they expired, and no ineffectiveness was recognized in earnings.

At February 11, 2023, the Company had $ 12.2 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 and twenty-four week periods ended February 11, 2023, the Company reclassified $ 741 thousand and $ 1.5 million, respectively, of net losses from Accumulated other comprehensive loss to Interest expense.

During the comparable prior year periods, $ 911 thousand and $ 1.8 million, respectively, were reclassified from Accumulated other comprehensive loss to Interest expense.

The Company expects to reclassify $ 2.3 million of net losses from Accumulated other comprehensive loss to Interest expense over the next 12 months.

Note F – Merchandise Inventories

Merchandise inventories include related purchasing, storage and handling costs.

1 unchanged sentence

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

Due to recent price inflation on the Company’s merchandise purchases, primarily driven by increased freight costs, the Company’s LIFO credit reserve balance was $ 96.0 million at November 19, 2022, and $ 15.0 million at August 27, 2022.

Due to recent price inflation on the Company’s merchandise purchases, primarily driven by increased freight costs, the Company’s LIFO credit reserve balance was $ 106.0 million at February 11, 2023, and $ 15.0 million at August 27, 2022.

Increases to the Company’s LIFO credit reserve balance are recorded as a non-cash charge to cost of sales.

Note F – Financing

Note G – Financing

The Company’s debt consisted of the following:

(in thousands)

2.875 % Senior Notes due January 2023 , effective interest rate of 3.21 %

3.125 % Senior Notes due July 2023 , effective interest rate of 3.26 %

2.875 % Senior Notes due January 2023 , effective interest rate 3.21 %

3.125 % Senior Notes due July 2023 , effective interest rate 3.26 %

3.125 % Senior Notes due April 2024 , effective interest rate 3.32 %

1 unchanged sentence

3.625 % Senior Notes due April 2025 , effective interest rate 3.78 %

3.125 % Senior Notes due April 2026 , effective interest rate of 3.28 %

3.750 % Senior Notes due June 2027 , effective interest rate of 3.83 %

3.750 % Senior Notes due April 2029 , effective interest rate of 3.86 %

3.125 % Senior Notes due April 2026 , effective interest rate 3.28 %

1.650 % Senior Notes due January 2031 , effective interest rate of 2.19 %

4.750 % Senior Notes due August 2032 , effective interest rate of 4.76 %

Commercial paper, weighted average interest rate of 3.96 % and 2.43 % at November 19, 2022 and August 27, 2022, respectively

3.750 % Senior Notes due June 2027 , effective interest rate 3.83 %

4.500 % Senior Notes due February 2028 , effective interest rate 4.43 %

3.750 % Senior Notes due April 2029 , effective interest rate 3.86 %

4.000 % Senior Notes due April 2030 , effective interest rate 4.09 %

1.650 % Senior Notes due January 2031 , effective interest rate 2.19 %

4.750 % Senior Notes due August 2032 , effective interest rate 4.76 %

4.750 % Senior Notes due February 2033 , effective interest rate 4.70 %

Commercial paper, weighted average interest rate 4.68 % and 2.43 % at February 11, 2023 and August 27, 2022, respectively

Total debt before discounts and debt issuance costs

7 unchanged sentences

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.

As of November 19, 2022, the Company had no outstanding borrowings and $ 1.8 million of outstanding letters of credit under the Revolving Credit Agreement.

As of February 11, 2023, the Company had no outstanding borrowings and $ 1.8 million of outstanding letters of credit under the Revolving Credit Agreement.

The Company also maintains a letter of credit facility that allows it to request the participating bank to issue letters of credit on its behalf up to an aggregate amount of $ 25 million.

The letter of credit facility is in addition to the letters of

credit that may be issued under the Revolving Credit Agreement.

As of November 19, 2022, the Company had $ 25.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2025.

In addition to the outstanding letters of credit issued under the committed facilities discussed above, the Company had $ 107.2 million in letters of credit outstanding as of November 19, 2022.

The letter of credit facility is in addition to the letters of credit that may be issued under the Revolving Credit Agreement.

As of February 11, 2023, the Company had $ 25.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2025.

In addition to the outstanding letters of credit issued under the committed facilities discussed above, the Company had $ 107.2 million in letters of credit outstanding as of February 11, 2023.

These letters of credit have various maturity dates and were issued on an uncommitted basis.

As of November 19, 2022, the commercial paper borrowings, the $ 300 million 2.875 % Senior Notes due January 2023 and the $ 500 million 3.125 % Senior Notes due July 2023 were classified as long-term in the accompanying Consolidated Balance Sheets as the Company currently has the ability and intent to refinance them on a long-term basis through available capacity under its Revolving Credit Agreement.

As of November 19, 2022, the Company had $ 2.2 billion of availability under its Revolving Credit Agreement, without giving effect to commercial paper borrowings, which would allow it to replace these short-term obligations with a long-term financing facility.

The Senior Notes contain a provision that repayment may be accelerated if the Company experiences a change in control (as defined in the agreements).

As of February 11, 2023, the commercial paper borrowings and the $ 500 million 3.125 % Senior Notes due July 2023 were classified as long-term in the accompanying Consolidated Balance Sheets as the Company currently has the ability and intent to refinance them on a long-term basis through available capacity under its Revolving Credit Agreement.

As of February 11, 2023, the Company had $ 2.2 billion of availability under its Revolving Credit Agreement, without giving effect to commercial paper borrowings, which would allow it to replace these short-term obligations with a long-term financing facility.

On January 17, 2023, the Company repaid its outstanding $ 300 million 2.875 % Senior Notes due January 2023.

On January 27, 2023, the Company issued $ 450 million in 4.500 % Senior Notes due February 2028 and $ 550 million in 4.750 % Senior Notes due February 2033.

Proceeds from the debt issuance were used to repay a portion of the Company’s outstanding commercial paper borrowings and for other general corporate purposes.

The Senior Notes contain a provision that repayment may be accelerated if the Company experiences both a change of control (as defined in the agreements) and a rating event (as defined in the agreements).

The Company’s borrowings under its Senior Notes contain minimal covenants, primarily restrictions on liens.

1 unchanged sentence

Interest for the Senior Notes is paid on a semi-annual basis.

The fair value of the Company’s debt was estimated at $ 6.0 billion as of November 19, 2022, and $ 5.9 billion as of August 27, 2022, 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 $ 341.1 million and $ 182.8 million at November 19, 2022 and August 27, 2022, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

As of November 19, 2022, the Company was in compliance with all covenants and expects to remain in compliance with all covenants under its borrowing arrangements.

Note G – Stock Repurchase Program

From January 1, 1998 to November 19, 2022, the Company has repurchased a total of 152.9 million shares of its common stock at an aggregate cost of $ 31.0 billion, including 392.2 thousand shares of its common stock at an aggregate cost of $ 900.0 million during the twelve week period ended November 19, 2022.

The fair value of the Company’s debt was estimated at $ 6.7 billion as of February 11, 2023, and $ 5.9 billion as of August 27, 2022, 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 $ 298.4 million and $ 182.8 million at February 11, 2023 and August 27, 2022, respectively, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

As of February 11, 2023, 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 11, 2023, the Company has repurchased a total of 153.3 million shares of its common stock at an aggregate cost of $ 31.9 billion, including 764.3 thousand shares of its common stock at an aggregate cost of $ 1.8 billion (inclusive of excise tax of $ 5.8 million) during the twenty-four week period ended February 11, 2023.

The excise tax is assessed at one percent of the fair market value of net stock repurchases after December 31, 2022.

On October 4, 2022, the Board voted to authorize the repurchase of an additional $ 2.5 billion of the Company’s common stock in connection with its ongoing share repurchase program, which raised the total value of shares authorized to be repurchased to $ 33.7 billion.

Considering the cumulative repurchases as of November 19, 2022, the Company had $ 2.7 billion remaining under the Board’s authorization to repurchase its common stock.

Subsequent to November 19, 2022 and through December 9, 2022, the Company has repurchased 42.9 thousand shares of its common stock at an aggregate cost of $ 108.0 million.

Note H – Accumulated Other Comprehensive Loss

Considering the cumulative repurchases as of February 11, 2023, the Company had $ 1.8 billion remaining under the Board’s authorization to repurchase its common stock.

During the twenty-four week period ended February 11, 2023, the Company retired 2.1 million shares of treasury stock which had been previously repurchased under the Company’s share repurchase program.

The retirement increased Retained deficit by $ 4.2 billion and decreased Additional paid-in capital by $ 143.4 million.

During the comparable prior year period, the Company retired 2.5 million shares of treasury stock, which increased Retained deficit by $ 3.3 billion and decreased Additional paid-in capital by $ 294.9 million.

Subsequent to February 11, 2023 and through March 10, 2023, the Company has repurchased 83.5 thousand shares of its common stock at an aggregate cost of $ 210.0 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 qualified as cash flow hedges and unrealized gains (losses) on available-for-sale marketable debt securities.

Changes in Accumulated other comprehensive loss for the twelve week periods ended November 19, 2022 and November 20, 2021 consisted of the following:

Changes in Accumulated other comprehensive loss for the twelve week periods ended February 11, 2023 and February 12, 2022 consisted of the following:

(in thousands)

on Securities

Balance at November 19, 2022

Other comprehensive income before reclassifications (2)(3)

Amounts reclassified from Accumulated other comprehensive loss (3)

Balance at February 11, 2023

(in thousands)

on Securities

Balance at November 20, 2021

Other comprehensive income (loss) before reclassifications (2)(3)

Amounts reclassified from Accumulated other comprehensive loss (3)

Balance at February 12, 2022

Changes in Accumulated other comprehensive loss for the twenty-four week periods ended February 11, 2023 and February 12, 2022 consisted of the following:

(in thousands)

on Securities

Balance at August 27, 2022

1 unchanged sentence

Amounts reclassified from Accumulated other comprehensive loss (3)

Balance at November 19, 2022

Balance at February 11, 2023

(in thousands)

3 unchanged sentences

Amounts reclassified from Accumulated other comprehensive loss (3)

Balance at November 20, 2021

Balance at February 12, 2022

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

6 unchanged sentences

(3) Amounts shown are net of tax .

Note I – Litigation

Note J – Litigation

The Company is involved in various legal proceedings incidental to the conduct of its business, including, but not limited to, several lawsuits containing class-action allegations in which the plaintiffs are current and former hourly and salaried employees who allege various wage and hour violations and unlawful termination practices.

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 J – 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

(in thousands)

5 unchanged sentences

( 1,158,466 )

( 2,531,615 )

( 2,329,141 )

Interest expense, net

5 unchanged sentences

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

(the Company) as of November 19, 2022, the related condensed consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for the twelve week periods ended November 19, 2022 and November 20, 2021, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”).

(the Company) as of February 11, 2023, the related condensed consolidated statements of income, comprehensive income and stockholders’ deficit for the twelve week and twenty-four week periods ended February 11, 2023 and February 12, 2022, the condensed consolidated statements of cash flows for the twenty-four week periods ended February 11, 2023 and February 12, 2022, 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

December 20, 2022

March 17, 2023

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