AUTOZONE INC 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk At February 15, 2025, the only material change to our instruments and positions that are sensitive to market risk since the disclosures in our Annual Report on Form 10-K for the year ended August 31, 2024, was the $22.0 million net increase in commercial paper. The fair value of the Company’s debt was estimated at $9.0 billion as of February 15, 2025, and August 31, 2024, 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 $92.1 million at February 15, 2025, and greater than the carrying value of debt by $3.5 million at August 31, 2024, and reflects their face amount, adjusted for any unamortized debt issuance costs and discounts. We had $602.0 million and $580.0 million of variable rate debt outstanding at February 15, 2025, and at August 31, 2024, respectively. At these borrowing levels for variable rate debt, a one percentage point increase in interest rates would have an unfavorable annual impact on our pre-tax earnings and cash flows of $6.0 million in fiscal 2025. The primary interest rate exposure is based on the federal funds rate. We had outstanding fixed rate debt of $8.5 billion, net of unamortized debt issuance costs of $49.9 million at February 15, 2025, and $8.4 billion, net of unamortized debt issuance costs of $55.6 million at August 31, 2024. A one percentage point increase in interest rates would have reduced the fair value of our fixed rate debt by $354.8 million at February 15, 2025.