| Document and Entity Information (USD $) | |||
| 9 Months Ended
May. 08, 2010 | Jun. 11, 2010
| Feb. 14, 2009
| |
| Document and Entity Information [Abstract] | |||
| Entity Registrant Name | AUTOZONE INC | ||
| Entity Central Index Key | 0000866787 | ||
| Document Type | 10-Q | ||
| Document Period End Date | 2010-05-08 | ||
| Amendment Flag | false | ||
| Document Fiscal Year Focus | 2,010 | ||
| Document Fiscal Period Focus | Q3 | ||
| Current Fiscal Year End Date | --08-29 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Current Reporting Status | Yes | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Public Float | $7,449,415,374 | ||
| Entity Common Stock, Shares Outstanding | 47,010,595 |
| Condensed Consolidated Balance Sheets (Unaudited) (USD $) | ||
| In Thousands | 9 Months Ended
May. 08, 2010 | 12 Months Ended
Aug. 29, 2009 |
| Current assets: | ||
| Cash and cash equivalents | $95,762 | $92,706 |
| Accounts receivable | 121,325 | 126,514 |
| Merchandise inventories | 2,288,364 | 2,207,497 |
| Other current assets | 73,497 | 135,013 |
| Total current assets | 2,578,948 | 2,561,730 |
| Property and equipment: | ||
| Property and equipment | 3,950,799 | 3,809,414 |
| Less: Accumulated depreciation and amortization | 1,525,756 | 1,455,057 |
| Property and equipment, net | 2,425,043 | 2,354,357 |
| Other assets: | ||
| Goodwill, net of accumulated amortization | 302,645 | 302,645 |
| Deferred income taxes | 46,642 | 59,067 |
| Other long-term assets | 99,492 | 40,606 |
| Other non-current assets | 448,779 | 402,318 |
| Total assets | 5,452,770 | 5,318,405 |
| Current liabilities: | ||
| Accounts payable | 2,235,766 | 2,118,746 |
| Accrued expenses and other current liabilities | 385,250 | 381,271 |
| Income taxes payable | 88,151 | 35,145 |
| Deferred income taxes | 162,909 | 171,590 |
| Total current liabilities | 2,872,076 | 2,706,752 |
| Debt | 2,698,500 | 2,726,900 |
| Other liabilities | 344,144 | 317,827 |
| Commitments and contingencies | ||
| Stockholders' deficit: | ||
| Preferred stock, authorized 1,000 shares; no shares issued | 0 | 0 |
| Common stock, par value $.01 per share, authorized 200,000 shares; 49,760 shares issued and 47,648 shares outstanding as of May 8, 2010; 57,881 shares issued and 50,801 shares outstanding as of August 29, 2009 | 498 | 579 |
| Additional paid-in capital | 515,865 | 549,326 |
| Retained (deficit) earnings | (514,278) | 136,935 |
| Accumulated other comprehensive loss | (84,012) | (92,035) |
| Treasury stock, at cost | (380,023) | (1,027,879) |
| Total stockholders' deficit | (461,950) | (433,074) |
| Total liabilities and stockholders' equity | $5,452,770 | $5,318,405 |
| Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) | ||
| May. 08, 2010
| Aug. 29, 2009
| |
| Stockholders' deficit: | ||
| Preferred stock, shares authorized | 1,000 | 1,000 |
| Preferred stock, shares issued | 0 | 0 |
| Common stock, par value | 0.01 | 0.01 |
| Common stock, shares authorized | 200,000 | 200,000 |
| Common stock, shares issued | 49,760 | 57,881 |
| Common stock, shares outstanding | 47,648 | 50,801 |
| Condensed Consolidated Statements of Income (Unaudited) (USD $) | ||||
| In Thousands, except Per Share data | 3 Months Ended
May. 08, 2010 | 3 Months Ended
May. 09, 2009 | 9 Months Ended
May. 08, 2010 | 9 Months Ended
May. 09, 2009 |
| Condensed Consolidated Statements of Income [Abstract] | ||||
| Net sales | $1,821,990 | $1,658,160 | $4,917,459 | $4,584,330 |
| Cost of sales, including warehouse and delivery expenses | 898,869 | 825,253 | 2,440,678 | 2,290,934 |
| Gross profit | 923,121 | 832,907 | 2,476,781 | 2,293,396 |
| Operating, selling, general and administrative expenses | 567,256 | 527,675 | 1,630,106 | 1,534,930 |
| Operating profit | 355,865 | 305,232 | 846,675 | 758,466 |
| Interest expense, net | 36,833 | 31,482 | 109,483 | 94,554 |
| Income before income taxes | 319,032 | 273,750 | 737,192 | 663,912 |
| Income taxes | 116,287 | 100,061 | 267,814 | 242,989 |
| Net income | $202,745 | $173,689 | $469,378 | $420,923 |
| Weighted average shares for basic earnings per share | 48,377 | 54,652 | 49,309 | 56,498 |
| Effect of dilutive stock equivalents | 835 | 804 | 778 | 681 |
| Adjusted weighted average shares for diluted earnings per share | 49,212 | 55,456 | 50,087 | 57,179 |
| Basic earnings per share | 4.19 | 3.18 | 9.52 | 7.45 |
| Diluted earnings per share | 4.12 | 3.13 | 9.37 | 7.36 |
| Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||
| In Thousands | 9 Months Ended
May. 08, 2010 | 9 Months Ended
May. 09, 2009 |
| Cash flows from operating activities: | ||
| Net income | $469,378 | $420,923 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization of property and equipment | 129,918 | 123,273 |
| Amortization of debt origination fees | 4,505 | 1,861 |
| Income tax benefit from exercise of stock options | (10,167) | (7,514) |
| Deferred income taxes | (4,516) | 20,104 |
| Share-based compensation expense | 13,215 | 13,492 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | 5,307 | (70,337) |
| Merchandise inventories | (79,177) | (108,047) |
| Accounts payable and accrued expenses | 125,622 | 84,700 |
| Income taxes payable | 61,908 | 54,449 |
| Other, net | 25,014 | 2,116 |
| Net cash provided by operating activities | 741,007 | 535,020 |
| Cash flows from investing activities: | ||
| Capital expenditures | (180,066) | (160,087) |
| Purchase of marketable securities | (31,417) | (27,730) |
| Proceeds from sale of marketable securities | 28,255 | 23,299 |
| Disposal of capital assets and other, net | 6,452 | 8,556 |
| Net cash used in investing activities | (176,776) | (155,962) |
| Cash flows from financing activities: | ||
| Net (payments) proceeds of commercial paper | (28,400) | 156,600 |
| Repayment of debt | (700) | |
| Net proceeds from sale of common stock | 28,818 | 36,795 |
| Purchase of treasury stock | (558,269) | (712,606) |
| Income tax benefit from exercise of stock options | 10,167 | 7,514 |
| Payments of capital lease obligations | (13,864) | (12,621) |
| Net cash used in financing activities | (561,548) | (525,018) |
| Effect of exchange rate changes on cash | 373 | (2,214) |
| Net increase (decrease) in cash and cash equivalents | 3,056 | (148,174) |
| Cash and cash equivalents at beginning of period | 92,706 | 242,461 |
| Cash and cash equivalents at end of period | $95,762 | $94,287 |
| General | |
| 9 Months Ended
May. 08, 2010 | |
| General [Abstract] | |
| General | Note A General The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Article10 of RegulationS-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in the Annual Report to Stockholders for AutoZone, Inc. (AutoZone or the Company) for the year ended August 29, 2009 (the 2009 Annual Report to Stockholders). Operating results for the twelve and thirty-six weeks ended May8, 2010, are not necessarily indicative of the results that may be expected for the fiscal year ending August28, 2010. Each of the first three quarters of AutoZones fiscal year consists of 12weeks, and the fourth quarter consists of 16 or 17weeks. The fourth quarters for fiscal 2009 and fiscal 2010 each have 16 weeks. Additionally, the Companys business is somewhat seasonal in nature, with the highest sales generally occurring during the months of February through September and the lowest sales generally occurring in the winter months of December and January. Recent Accounting Pronouncements: In October2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2009-13, Revenue Arrangements with Multiple Deliverables, which amends Accounting Standards Codification (ASC) Topic 605 (formerly Emerging Issues Task Force Issue No.00-21, Revenue Arrangements with Multiple Deliverables). This ASU addresses the accounting for multiple-deliverable revenue arrangements to enable vendors to account for deliverables separately rather than as a combined unit. This ASU will be effective prospectively for revenue arrangements entered into commencing with the Companys first fiscal quarter beginning August29, 2010. The Company does not expect the provisions of ASU 2009-13 to have a material effect on the consolidated financial statements. In January2010, the FASB issued ASU 2010-06, Improving Disclosures about Fair Value Measurements, which amends ASC 820 (formerly FASB Statement No. 157, Fair Value Measurements). This ASU requires a number of additional disclosures regarding fair value measurements such as transfers in and out of Levels 1 and 2 and separate disclosures about activity relating to Level 3 measurements. It also clarifies existing disclosure requirements related to the level of disaggregation and input valuation techniques. This ASU became effective for the Company commencing with the Companys third fiscal quarter beginning February14, 2010, and its adoption has been reflected within Note C Fair Value Measurements. The provisions of ASU 2010-06 did not have a material effect on the consolidated financial statements. |
| Share-Based Payments | |
| 9 Months Ended
May. 08, 2010 | |
| Share-Based Payments [Abstract] | |
| Share-Based Payments | Note B Share-Based Payments AutoZone recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. Share-based payments include stock option grants and the discount on shares sold to employees under share purchase plans. Additionally, directors may defer a portion of their fees in units with value equivalent to the value of shares of common stock as of the grant date. Total share-based compensation expense (a component of operating, selling, general and administrative expenses) was $4.3million for the twelve week period ended May8, 2010, and was $4.2million for the comparable prior year period. Share-based compensation expense was $13.2 million for the thirty-six week period ended May8, 2010, and was $13.5million for the comparable prior year period. During the thirty-six week period ended May8, 2010, the Company made stock option grants of 496,580 shares. The Company granted options to purchase 593,842 shares during the comparable prior year period. The weighted average fair value of the stock option awards granted during the thirty-six week periods ended May8, 2010 and May9, 2009, using the Black-Scholes-Merton multiple-option pricing valuation model, was $40.75 and $34.05 per share, respectively, using the following weighted average key assumptions: Thirty-Six Weeks Ended May 8, May 9, 2010 2009 Expected price volatility 31 % 28 % Risk-free interest rate 1.8 % 2.4 % Weighted average expected lives in years 4.3 4.1 Forfeiture rate 10.0 % 10.0 % Dividend yield 0.0 % 0.0 % See AutoZones 2009 Annual Report to Stockholders for a discussion of the methodology used in developing AutoZones assumptions to determine the fair value of the option awards. For the twelve week period ended May8, 2010, there were no stock options excluded from the diluted earnings per share computation because they would have been anti-dilutive. For the comparable prior year period, 2,400 anti-dilutive shares were excluded. There were 24,900 anti-dilutive shares excluded from the diluted earnings per share computation for the thirty-six week period ended May8, 2010 and 32,952 shares excluded for the comparable prior year period. |
| Fair Value Measurements | |
| 9 Months Ended
May. 08, 2010 | |
| Fair Value Measurements [Abstract] | |
| Fair Value Measurements | Note C Fair Value Measurements The Company defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a hierarchy of valuation inputs to measure fair value. The hierarchy prioritizes the inputs into three broad levels: Level 1 inputsunadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occur with sufficient frequency and volume to provide ongoing pricing information. Level 2 inputsinputs other than quoted market prices included in Level 1 that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. Level 3 inputsunobservable inputs for the asset or liability. The carrying value of certain of the Companys financial instruments, including cash and cash equivalents, accounts receivable, prepaid assets and accounts payable, approximate fair value because of their short maturities. A discussion of the carrying values and fair values of the Companys debt is included in Note F Debt. The Company holds investments in its wholly owned insurance captive in a money market fund and marketable debt securities and classifies them as available-for-sale. The investments are recorded at fair value, which is typically valued at the closing quoted price in the principal active market as of the last business day of the quarter. At May8, 2010, the debt securities measured at fair value include Level 1 investments of $11.7million and $60.7million, which are included in other current assets and other long-term assets, respectively, in the accompanying Condensed Consolidated Balance Sheet. Unrealized gains and losses on the marketable securities are recorded in accumulated other comprehensive income, net of tax. The Companys basis for determining the cost of a security sold is the Specific Identification Model. The Companys available-for-sale marketable securities consisted of the following: May 8, 2010 Amortized Gross Gross Cost Unrealized Unrealized (in thousands) Basis Gains Losses Fair Value Corporate securities $ 26,445 $ 446 $ (4 ) $ 26,887 Government bonds 28,954 268 29,222 Mortgage-backed securities 10,126 276 10,402 Asset-backed securities and other 5,801 89 5,890 Total $ 71,326 $ 1,079 $ (4 ) $ 72,401 August 29, 2009 |
| Merchandise Inventories | |
| 9 Months Ended
May. 08, 2010 | |
| Merchandise Inventories [Abstract] | |
| Merchandise Inventories | Note D Merchandise Inventories Inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method for domestic inventories and the first-in, first-out (FIFO) method for Mexico inventories. Included in inventories are related purchasing, storage and handling costs. Due to price deflation on the Companys merchandise purchases, the Companys domestic inventory balances are effectively maintained under the FIFO method. The Companys policy is not to write up inventory in excess of replacement cost. The cumulative balance of this unrecorded adjustment, which will be reduced upon experiencing price inflation on the Companys merchandise purchases, was $243.0million at May8, 2010, and $223.0million at August29, 2009. |
| Pension Plans | |
| 9 Months Ended
May. 08, 2010 | |
| Pension Plans [Abstract] | |
| Pension Plans | Note E Pension Plans The components of net periodic pension expense (income)related to the Companys pension plans for all periods presented are as follows: Twelve Weeks Ended Thirty-Six Weeks Ended May 8, May 9, May 8, May 9, (in thousands) 2010 2009 2010 2009 Interest cost $ 2,611 $ 2,457 $ 7,833 $ 7,371 Expected return on plan assets (2,087 ) (2,927 ) (6,261 ) (8,780 ) Amortization of prior service cost 14 41 Amortization of net loss 1,877 17 5,631 51 Net periodic pension expense (income) $ 2,401 $ (439 ) $ 7,203 $ (1,317 ) The Company makes contributions in amounts at least equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006. During the thirty-six week period ended May8, 2010, the Company did not make any contributions to its funded plan and does not expect to make any additional cash contributions during the remainder of fiscal 2010. |
| Debt | |
| 9 Months Ended
May. 08, 2010 | |
| Debt [Abstract] | |
| Debt | Note F Debt The Companys debt consisted of the following: May 8, August 29, (in thousands) 2010 2009 4.75% Senior Notes due November2010, effective interest rate of 4.17% $ 199,300 $ 199,300 5.875% Senior Notes due October2012, effective interest rate of 6.33% 300,000 300,000 4.375% Senior Notes due June2013, effective interest rate of 5.65% 200,000 200,000 6.5% Senior Notes due January2014, effective interest rate of 6.63% 500,000 500,000 5.75% Senior Notes due January2015, effective interest rate of 5.89% 500,000 500,000 5.5% Senior Notes due November2015, effective interest rate of 4.86% 300,000 300,000 6.95% Senior Notes due June2016, effective interest rate of 7.09% 200,000 200,000 7.125% Senior Notes due August2018, effective interest rate of 7.28% 250,000 250,000 Commercial paper, weighted average interest rate of 0.36% and 0.49% at May8, 2010 and August29, 2009, respectively 249,200 277,600 $ 2,698,500 $ 2,726,900 As of May8, 2010, the 4.75% Senior Notes due November2010 and the commercial paper borrowings mature in the next twelve months, but are classified as long-term in the accompanying Condensed Consolidated Balance Sheet, as the Company has the ability and intent to refinance the borrowings on a long-term basis. Before considering the effect of commercial paper borrowings, the Company had $693.0million of availability under its $800million revolving credit facility, expiring in July 2012, which would allow it to replace these short-term obligations with long-term financing. The fair value of the Companys debt was estimated at $2.946billion as of May8, 2010, and $2.853 billion as of August29, 2009, 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. Such fair value is greater than the carrying value of debt by $247.6million at May8, 2010, and $126.5million at August29, 2009. Subsequent to May8, 2010, the Company executed a new $100million letter of credit facility. |
| Stock Repurchase Program | |
| 9 Months Ended
May. 08, 2010 | |
| Stock Repurchase Program [Abstract] | |
| Stock Repurchase Program | Note G Stock Repurchase Program From January1, 1998 to May8, 2010, the Company has repurchased a total of 118.9million shares at an aggregate cost of $8.1billion, including 3,532,605 shares of its common stock at an aggregate cost of $558.3million during the thirty-six week period ended May8, 2010. On December16, 2009, the Board of Directors (the Board) voted to increase the authorization by $500million to raise the cumulative share repurchase authorization from $7.9billion to $8.4billion. Considering cumulative repurchases as of May8, 2010, the Company had $250.8million remaining under the Boards authorization to repurchase its common stock. On June15, 2010, the Board voted to increase the authorization by $500million to raise the cumulative share repurchase authorization from $8.4billion to $8.9billion. Subsequent to May8, 2010, the Company has repurchased 816,390 shares of its common stock at an aggregate cost of $153.9 million. During the thirty-six week period ended May8, 2010, the Company retired 8.5million shares of treasury stock which had previously been repurchased under the Companys share repurchase program. The retirement decreased retained (deficit)earnings by $1,120.3million and additional paid-in capital by $85.7million. |
| Comprehensive Income | |
| 9 Months Ended
May. 08, 2010 | |
| Comprehensive Income [Abstract] | |
| Comprehensive Income | Note H Comprehensive Income Comprehensive income includes foreign currency translation adjustments; the impact from certain derivative financial instruments designated and effective as cash flow hedges, including changes in fair value, as applicable; the reclassification of gains and/or losses from accumulated other comprehensive loss to net income to offset the earnings impact of the underlying items being hedged; pension liability adjustments and changes in the fair value of certain investments classified as available-for- sale. During the thirty-six week period ended May8, 2010, the Mexican Peso remained relatively flat against the US Dollar. The foreign currency translation adjustment of $40.5million in the thirty-six week period ended May9, 2009, was attributable to the weakening of the Mexican Peso against the US Dollar, which as of May9, 2009, had decreased by approximately 27% when compared to the fiscal year ended August30, 2008. Comprehensive income for all periods presented is as follows: Twelve Weeks Ended Thirty-Six Weeks Ended May 8, May 9, May 8, May 9, (in thousands) 2010 2009 2010 2009 Net income, as reported $ 202,745 $ 173,689 $ 469,378 $ 420,923 Foreign currency translation adjustments 6,417 12,310 5,068 (40,473 ) Net impact from derivative instruments (141 ) 737 (423 ) (1,549 ) Pension liability adjustments (309 ) 3,435 Unrealized (losses)gains from marketable securities (154 ) 250 (55 ) 389 Comprehensive income $ 208,558 $ 186,986 $ 477,403 $ 379,290 |
| Segment Reporting | |
| 9 Months Ended
May. 08, 2010 | |
| Segment Reporting [Abstract] | |
| Segment Reporting | Note I Segment Reporting The Companys two operating segments (Domestic Auto Parts and Mexico) are aggregated as one reportable segment: Auto Parts Stores. The criteria the Company used to identify the reportable segment are primarily the nature of the products the Company sells and the operating results that are regularly reviewed by the Companys chief operating decision maker to make decisions about the resources to be allocated to the business units and to assess performance. The accounting policies of the Companys reportable segment are the same as those described in Note A in its 2009 Annual Report to Stockholders. The Auto Parts Stores segment is a retailer and distributor of automotive parts and accessories through the Companys 4,521 stores in the United States, including Puerto Rico, and Mexico. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. The Other category reflects business activities that are not separately reportable, including ALLDATA, which produces, sells and maintains diagnostic and repair information software used in the automotive repair industry, and E-commerce, which includes direct sales to customers through www.autozone.com. The Company evaluates its reportable segment primarily on the basis of net sales and segment profit, which is defined as gross profit. Segment results for the periods presented are as follows: Twelve Weeks Ended Thirty-Six Weeks Ended May 8, May 9, May 8, May 9, (in thousands) 2010 2009 2010 2009 Net Sales Auto Parts Stores $ 1,787,069 $ 1,624,806 $ 4,816,288 $ 4,485,258 Other 34,921 33,354 101,171 99,072 Total $ 1,821,990 $ 1,658,160 $ 4,917,459 $ 4,584,330 Segment Profit Auto Parts Stores $ 895,163 $ 805,589 $ 2,394,959 $ 2,211,687 Other 27,958 27,318 81,822 81,709 Gross profit 923,121 832,907 2,476,781 2,293,396 Operating, selling, general and administrative expenses (567,256 ) (527,675 ) (1,630,106 ) (1,534,930 ) Interest expense, net (36,833 ) (31,482 ) (109,483 ) (94,554 ) Income before income taxes $ 319,032 $ 273,750 $ 737,192 $ 663,912 |
