Nevada
|
|
62-1482048
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
123 South Front Street, Memphis, Tennessee
|
|
38103
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of Each Class
|
|
Trading Symbol(s)
|
|
Name of Each Exchange on which Registered
|
Common Stock ($0.01 par value)
|
|
AZO
|
|
New York Stock Exchange
|
Large accelerated filer ☒
|
|
Accelerated filer
☐
|
Non-accelerated
filer
☐
Emerging growth company ☐
|
|
Smaller reporting company ☐
|
PART I.
|
3
|
|||||
Item 1.
|
3
|
|||||
|
3
|
|||||
|
4
|
|||||
|
4
|
|||||
|
5
|
|||||
|
6
|
|||||
|
7
|
|||||
|
18
|
|||||
Item 2.
|
19
|
|||||
Item 3.
|
26
|
|||||
Item 4.
|
26
|
|||||
PART II.
|
27
|
|||||
Item 1.
|
27
|
|||||
Item 1A.
|
27
|
|||||
Item 2.
|
27
|
|||||
Item 3.
|
28
|
|||||
Item 4.
|
28
|
|||||
Item 5.
|
28
|
|||||
Item 6.
|
29
|
|||||
|
30
|
(in thousands)
|
February 15,
2020
|
|
August 31,
2019 |
|
||||
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
152,970
|
|
|
$
|
176,300
|
|
Accounts receivable
|
|
|
340,280
|
|
|
|
308,995
|
|
Merchandise inventories
|
|
|
4,606,211
|
|
|
|
4,319,113
|
|
Other current assets
|
|
|
201,086
|
|
|
|
224,277
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
5,300,547
|
|
|
|
5,028,685
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
7,948,231
|
|
|
|
7,713,196
|
|
Less: Accumulated depreciation and amortization
|
|
|
(3,471,805
|
)
|
|
|
(3,314,445
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
4,476,426
|
|
|
|
4,398,751
|
|
Operating lease
right-of-use
assets
|
|
|
2,579,217
|
|
|
|
–
|
|
Goodwill
|
|
|
302,645
|
|
|
|
302,645
|
|
Deferred income taxes
|
|
|
27,945
|
|
|
|
26,861
|
|
Other long-term assets
|
|
|
176,969
|
|
|
|
138,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,086,776
|
|
|
|
468,477
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,863,749
|
|
|
$
|
9,895,913
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
4,869,914
|
|
|
$
|
4,864,912
|
|
Current portion of operating lease liabilities
|
|
|
234,506
|
|
|
|
–
|
|
Accrued expenses and other
|
|
|
632,343
|
|
|
|
621,932
|
|
Income taxes payable
|
|
|
42,797
|
|
|
|
25,297
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
5,779,560
|
|
|
|
5,512,141
|
|
Long-term debt
|
|
|
5,451,471
|
|
|
|
5,206,344
|
|
Operating lease liabilities, less current portion
|
|
|
2,494,840
|
|
|
|
–
|
|
Deferred income taxes
|
|
|
325,263
|
|
|
|
311,980
|
|
Other
l
ong-term
liabilities
|
|
|
523,734
|
|
|
|
579,299
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Stockholders’ deficit:
|
|
|
||||||
Preferred stock, authorized 1,000
shares; no
shares issued
|
|
|
–
|
|
|
|
–
|
|
Common stock, par value $.01
per share, authorized 200,000
shares; 23,653
shares issued and 23,488
shares outstanding as of February 15
, 2020
; 25,445
shares issued and 24,038
shares outstanding as
of August 31
, 2019
|
|
|
237
|
|
|
|
254
|
|
Additional
paid-in
capital
|
|
|
1,241,733
|
|
|
|
1,264,448
|
|
Retained deficit
|
|
|
(2,534,322
|
)
|
|
|
(1,305,347
|
)
|
Accumulated other comprehensive loss
|
|
|
(228,337
|
)
|
|
|
(269,322
|
)
|
Treasury stock, at cost
|
|
|
(190,430
|
)
|
|
|
(1,403,884
|
)
|
|
|
|
|
|
|
|
|
|
Total stockholders’ deficit
|
|
|
(1,711,119
|
)
|
|
|
(1,713,851
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,863,749
|
|
|
$
|
9,895,913
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks Ended
|
|
|
Twenty-Four
Weeks Ended
|
|
||||||||||
(in thousands, except per share data)
|
February 15,
2020
|
|
February 9,
2019
|
|
February 15,
2020
|
|
February 9,
2019
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ |
2,513,663
|
$ |
2,450,568
|
$ |
5,306,700
|
$ |
5,092,302
|
||||||||
Cost of sales, including warehouse and delivery expenses
|
1,147,600
|
1,125,461
|
2,439,569
|
2,349,721
|
||||||||||||
|
||||||||||||||||
Gross profit
|
1,366,063
|
1,325,107
|
2,867,131
|
2,742,581
|
||||||||||||
Operating, selling, general and administrative expenses
|
958,125
|
925,087
|
1,959,170
|
1,854,742
|
||||||||||||
|
||||||||||||||||
Operating profit
|
407,938
|
400,020
|
907,961
|
887,839
|
||||||||||||
Interest expense, net
|
44,335
|
41,362
|
88,078
|
80,369
|
||||||||||||
|
||||||||||||||||
Income before income taxes
|
363,603
|
358,658
|
819,883
|
807,470
|
||||||||||||
Income tax expense
|
64,321
|
64,020
|
170,263
|
161,426
|
||||||||||||
|
||||||||||||||||
Net income
|
$ |
299,282
|
$ |
294,638
|
$ |
649,620
|
$ |
646,044
|
||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares for basic earnings per share
|
23,570
|
25,166
|
23,722
|
25,397
|
||||||||||||
Effect of dilutive stock equivalents
|
590
|
477
|
604
|
473
|
||||||||||||
|
||||||||||||||||
Weighted average shares for diluted earnings per share
|
24,160
|
25,643
|
24,326
|
25,870
|
||||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
$ |
12.70
|
$ |
11.71
|
$ |
27.38
|
$ |
25.44
|
||||||||
|
||||||||||||||||
Diluted earnings per share
|
$ |
12.39
|
$ |
11.49
|
$ |
26.70
|
$ |
24.97
|
||||||||
|
|
Twelve Weeks Ended
|
|
|
Twenty-Four
Weeks Ended
|
|
||||||||||
(in thousands)
|
|
February 15,
2020
|
|
|
February 9,
2019
|
|
|
February 15,
2020
|
|
|
February 9,
2019
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$ |
299,282
|
$ |
294,638
|
$ |
649,620
|
$ |
646,044
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
21,178
|
39,332
|
40,218
|
(1,241
|
) | |||||||||||
Unrealized gains (losses) on marketable debt securities, net of taxes
(1)
|
178
|
508
|
(10
|
) |
431
|
|||||||||||
Net derivative activities, net of taxes
(2)
|
388
|
389
|
777
|
778
|
||||||||||||
Total other comprehensive income (loss)
|
21,744
|
40,229
|
40,985
|
(32
|
) | |||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
$ |
321,026
|
$ |
334,867
|
$ |
690,605
|
$ |
646,012
|
||||||||
|
(1)
|
Unrealized gains on marketable debt securities are presented net of taxes of $47 in fiscal 2020 and $135 in fiscal 2019 for the twelve weeks ended. Unrealized losses on marketable securities are presented net of tax benefit of $3 in fiscal 2020, and unrealized gains on marketable securities are presented net of taxes of $115 in fiscal 2019 for the twenty-four weeks ended.
|
(2)
|
Net derivative activities are presented net of taxes of $120 in fiscal 2020 and fiscal 2019 for the twelve weeks ended and $240 for fiscal 2020 and fiscal 2019 for the twenty-four weeks ended.
|
|
|
Twenty-Four
Weeks Ended
|
||||||||||||||
(in thousands)
|
|
|
February 15,
2020 |
|
|
|
February 9,
2019 |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
||||||||||||
Net income
|
|
$ |
649,620
|
|
$ |
646,044
|
||||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||||||||||
Depreciation and amortization of property and equipment and intangibles
|
|
180,420
|
|
166,230
|
||||||||||||
Amortization of debt origination fees
|
|
4,216
|
|
3,668
|
||||||||||||
Deferred income taxes
|
|
11,154
|
|
7,211
|
||||||||||||
Share-based compensation expense
|
|
22,107
|
|
21,558
|
||||||||||||
Changes in operating assets and liabilities:
|
|
|
|
|
||||||||||||
Accounts receivable
|
|
(28,897
|
) |
|
(38,338
|
) | ||||||||||
Merchandise inventories
|
|
(262,234
|
) |
|
(364,392
|
) | ||||||||||
Accounts payable and accrued expenses
|
|
6,571
|
|
256,969
|
||||||||||||
Income taxes payable
|
|
11,124
|
|
31,701
|
||||||||||||
Other, net
|
|
57,563
|
|
86,418
|
||||||||||||
|
|
|
||||||||||||||
Net cash provided by operating activities
|
|
651,644
|
|
817,069
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
||||||||||||
Capital expenditures
|
|
(190,563
|
) |
|
(195,832
|
) | ||||||||||
Purchase of marketable debt securities
|
|
(56,347
|
) |
|
(21,054
|
) | ||||||||||
Proceeds from sale of marketable debt securities
|
|
70,812
|
|
34,531
|
||||||||||||
Proceeds from disposal of capital assets and other, net
|
|
1,185
|
|
6,152
|
||||||||||||
|
|
|
||||||||||||||
Net cash used in investing activities
|
|
(174,913
|
) |
|
(176,203
|
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
||||||||||||
Net proceeds from commercial paper
|
|
242,700
|
|
103,500
|
||||||||||||
Net proceeds from sale of common stock
|
|
48,705
|
|
107,578
|
||||||||||||
Purchase of treasury stock
|
|
(764,846
|
) |
|
(847,097
|
) | ||||||||||
Repayment of principal portion of finance lease liabilities
|
|
(29,324
|
) |
|
(25,529
|
) | ||||||||||
|
|
|
||||||||||||||
Net cash used in financing activities
|
|
(502,765
|
) |
|
(661,548
|
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
|
2,704
|
|
(1,477
|
) | |||||||||||
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Net (decrease) in cash and cash equivalents
|
|
(23,330
|
) |
|
(22,159
|
) | ||||||||||
Cash and cash equivalents at beginning of period
|
|
176,300
|
|
217,824
|
||||||||||||
|
|
|
||||||||||||||
Cash and cash equivalents at end of period
|
|
$ |
152,970
|
|
$ |
195,665
|
||||||||||
|
|
|
|
|
Twelve Weeks Ended
February 15, 2020
|
|
|
|
|||||||||||||||||||||||||
(in thousands)
|
|
Common
Shares
Issued
|
|
|
Common
Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Retained
Deficit
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
|
Treasury
Stock
|
|
|
Total
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at November 23, 2019
|
|
|
25,465
|
|
|
$
|
254
|
|
|
$
|
1,282,629
|
|
|
$
|
(955,009
|
)
|
|
$
|
(250,081
|
)
|
|
$
|
(1,853,883
|
)
|
|
$
|
(1,776,090
|
)
|
||
Net income
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
299,282
|
|
|
|
–
|
|
|
|
–
|
|
|
|
299,282
|
|
||
Total other comprehensive income
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
21,744
|
|
|
|
–
|
|
|
|
21,744
|
|
||
Retirement of treasury shares
|
|
|
(1,912
|
)
|
|
|
(19
|
)
|
|
|
(99,686
|
)
|
|
|
(1,878,595
|
)
|
|
|
–
|
|
|
|
1,978,300
|
|
|
|
–
|
|
||
Purchase of 267 shares of treasury stock
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(314,847
|
)
|
|
|
(314,847
|
)
|
||
Issuance of common stock under stock options and stock purchase plans
|
|
|
100
|
|
|
|
2
|
|
|
|
46,477
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
46,479
|
|
||
Share-based compensation expense
|
|
|
–
|
|
|
|
–
|
|
|
|
12,313
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
12,313
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Balance at February 15, 2020
|
|
|
23,653
|
|
|
$
|
237
|
|
|
$
|
1,241,733
|
|
|
$
|
(2,534,322
|
)
|
|
$
|
(228,337
|
)
|
|
$
|
(190,430
|
)
|
|
$
|
(1,711,119
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Weeks Ended
February 9, 2019
|
|
|
|
|
|
|||||||||||||||||||||||||
(in thousands)
|
|
Common
Shares
Issued
|
|
|
Common
Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Retained
Deficit
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
|
Treasury
Stock
|
|
|
Total
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at November 17, 2018
|
|
|
27,658
|
|
|
$
|
277
|
|
|
$
|
1,209,851
|
|
|
$
|
(864,191
|
)
|
|
$
|
(276,066
|
)
|
|
$
|
(1,728,487
|
)
|
|
$
|
(1,658,616
|
)
|
||||
Net income
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
294,638
|
|
|
|
–
|
|
|
|
–
|
|
|
|
294,638
|
|
||||
Total other comprehensive income
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
40,229
|
|
|
|
–
|
|
|
|
40,229
|
|
||||
Retirement of treasury shares
|
|
|
(2,563
|
)
|
|
|
(26
|
)
|
|
|
(125,442
|
)
|
|
|
(1,706,972
|
)
|
|
|
–
|
|
|
|
1,832,440
|
|
|
|
–
|
|
||||
Purchase of 422 shares of treasury stock
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(350,037
|
)
|
|
|
(350,037
|
)
|
||||
Issuance of common stock under stock options and stock purchase plans
|
|
|
164
|
|
|
|
2
|
|
|
|
69,018
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
69,020
|
|
||||
Share-based compensation expense
|
|
|
–
|
|
|
|
–
|
|
|
|
10,404
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
10,404
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at February 9, 2019
|
|
|
25,259
|
|
|
$
|
253
|
|
|
$
|
1,163,831
|
|
|
$
|
(2,276,525
|
)
|
|
$
|
(235,837
|
)
|
|
$
|
(246,084
|
)
|
|
$
|
(1,594,362
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Four Weeks Ended
February 15, 2020
|
|
|
|
|
||||||||||||||||||||||||||
(in thousands)
|
|
Common
Shares
Issued
|
|
|
Common
Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Retained
Deficit
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
|
Treasury
Stock
|
|
|
Total
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at August 31, 2019
|
|
|
25,445
|
|
|
$
|
254
|
|
|
$
|
1,264,448
|
|
|
$
|
(1,305,347
|
)
|
|
$
|
(269,322
|
)
|
|
$
|
(1,403,884
|
)
|
|
$
|
(1,713,851
|
)
|
||||
Net income
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
649,620
|
|
|
|
–
|
|
|
|
–
|
|
|
|
649,620
|
|
||||
Total other comprehensive income
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
40,985
|
|
|
|
–
|
|
|
|
40,985
|
|
||||
Retirement of treasury shares
|
|
|
(1,912
|
)
|
|
|
(19
|
)
|
|
|
(99,686
|
)
|
|
|
(1,878,595
|
)
|
|
|
–
|
|
|
|
1,978,300
|
|
|
|
–
|
|
||||
Purchase of 670 shares of treasury stock
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(764,846
|
)
|
|
|
(764,846
|
)
|
||||
Issuance of common stock under stock options and stock purchase plans
|
|
|
120
|
|
|
|
2
|
|
|
|
55,299
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
55,301
|
|
||||
Share-based compensation expense
|
|
|
–
|
|
|
|
–
|
|
|
|
21,672
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
21,672
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at February 15, 2020
|
|
|
23,653
|
|
|
$
|
237
|
|
|
$
|
1,241,733
|
|
|
$
|
(2,534,322
|
)
|
|
$
|
(228,337
|
)
|
|
$
|
(190,430
|
)
|
|
$
|
(1,711,119
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-Four Weeks Ended
February 9, 2019
|
|
|
|
|
|
|||||||||||||||||||||||||
(in thousands)
|
|
Common
Shares
Issued
|
|
|
Common
Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Retained
Deficit
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
|
Treasury
Stock
|
|
|
Total
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at August 25, 2018
|
|
|
27,530
|
|
|
$
|
275
|
|
|
$
|
1,155,426
|
|
|
$
|
(1,208,824
|
)
|
|
$
|
(235,805
|
)
|
|
$
|
(1,231,427
|
)
|
|
$
|
(1,520,355
|
)
|
||||
Cumulative effect of adoption of ASU
2014-09
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(6,773
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
(6,773
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at August 25, 2018, as adjusted
|
|
|
27,530
|
|
|
$
|
275
|
|
|
$
|
1,155,426
|
|
|
$
|
(1,215,597
|
)
|
|
$
|
(235,805
|
)
|
|
$
|
(1,231,427
|
)
|
|
$
|
(1,527,128
|
)
|
||||
Net income
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
646,044
|
|
|
|
–
|
|
|
|
–
|
|
|
|
646,044
|
|
||||
Total other comprehensive loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(32
|
)
|
|
|
–
|
|
|
|
(32
|
)
|
||||
Retirement of treasury shares
|
|
|
(2,563
|
)
|
|
|
(26
|
)
|
|
|
(125,442
|
)
|
|
|
(1,706,972
|
)
|
|
|
–
|
|
|
|
1,832,440
|
|
|
|
–
|
|
||||
Purchase of 1,076 shares of treasury stock
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(847,097
|
)
|
|
|
(847,097
|
)
|
||||
Issuance of common stock under stock options and stock purchase plans
|
|
|
292
|
|
|
|
4
|
|
|
|
113,942
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
113,946
|
|
||||
Share-based compensation expense
|
|
|
–
|
|
|
|
–
|
|
|
|
19,905
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
19,905
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at February 9, 2019
|
|
|
25,259
|
|
|
$
|
253
|
|
|
$
|
1,163,831
|
|
|
$
|
(2,276,525
|
)
|
|
$
|
(235,837
|
)
|
|
$
|
(246,084
|
)
|
|
$
|
(1,594,362
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 15, 2020
|
|
|||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
$ |
47,079
|
$ |
872
|
$ |
–
|
$ |
47,951
|
||||||||
Other long-term assets
|
67,355
|
9,141
|
–
|
76,496
|
||||||||||||
|
$ |
114,434
|
$ |
10,013
|
$ |
–
|
$ |
124,447
|
||||||||
|
|
|
|
|||||||||||||
|
|
August 31, 2019
|
|
|||||||||||||
(in thousands)
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Fair Value
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
$ |
65,344
|
$ |
2,614
|
$ |
–
|
$ |
67,958
|
||||||||
Other long-term assets
|
65,573
|
5,395
|
–
|
70,968
|
||||||||||||
|
$ |
130,917
|
$ |
8,009
|
$ |
–
|
$ |
138,926
|
||||||||
|
February 15, 2020
|
|||||||||||||||
(in thousands)
|
Amortized
Cost
Basis
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair Value
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
$ |
33,784
|
$ |
62
|
$ |
–
|
$ |
33,846
|
||||||||
Government bonds
|
57,554
|
662
|
–
|
58,216
|
||||||||||||
Mortgage-backed securities
|
3,414
|
12
|
(8
|
) |
3,418
|
|||||||||||
Asset-backed securities and other
|
28,956
|
13
|
(2
|
) |
28,967
|
|||||||||||
|
$ |
123,708
|
$ |
749
|
$ |
(10
|
) | $ |
124,447
|
|||||||
|
|
August 31, 2019
|
|
|||||||||||||
(in thousands)
|
|
Amortized
Cost
Basis
|
|
|
Gross
Unrealized Gains |
|
|
Gross
Unrealized Losses |
|
|
Fair Value
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate debt securities
|
$ |
36,998
|
$ |
29
|
$ |
(19
|
) | $ |
37,008
|
|||||||
Government bonds
|
45,741
|
763
|
–
|
46,504
|
||||||||||||
Mortgage-backed securities
|
2,089
|
2
|
(15
|
) |
2,076
|
|||||||||||
Asset-backed securities and other
|
53,345
|
–
|
(7
|
) |
53,338
|
|||||||||||
|
$ |
138,173
|
$ |
794
|
$ |
(41
|
) | $ |
138,926
|
|||||||
(in thousands)
|
February 15,
2020
|
|
August 31,
2019 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
4.000% Senior Notes due November 2020, effective interest rate of 4.43%
|
|
$ |
500,000
|
|
$ |
500,000
|
||||||||||
2.500% Senior Notes due April 2021, effective interest rate of 2.62%
|
|
250,000
|
|
250,000
|
||||||||||||
3.700% Senior Notes due April 2022, effective interest rate of 3.85%
|
|
500,000
|
|
500,000
|
||||||||||||
2.875% Senior Notes due January 2023, effective interest rate of 3.21%
|
|
300,000
|
|
300,000
|
||||||||||||
3.125% Senior Notes due July 2023, effective interest rate of 3.26%
|
|
500,000
|
|
500,000
|
||||||||||||
3.125% Senior Notes due April 2024, effective interest rate 3.32%
|
|
300,000
|
|
300,000
|
||||||||||||
3.250% Senior Notes due April 2025, effective interest rate 3.36%
|
|
400,000
|
|
400,000
|
||||||||||||
3.125% Senior Notes due April 2026, effective interest rate of 3.28%
|
|
400,000
|
|
400,000
|
||||||||||||
3.750% Senior Notes due June 2027, effective interest rate of 3.83%
|
|
600,000
|
|
600,000
|
||||||||||||
3.750% Senior Notes due April 2029, effective interest rate of 3.86%
|
|
450,000
|
|
450,000
|
||||||||||||
Commercial paper, weighted average interest rate of 1.72% and 2.28% at February 15, 2020 and August 31, 2019, respectively
|
|
1,272,700
|
|
1,030,000
|
||||||||||||
|
|
|||||||||||||||
Total debt before discounts and debt issuance costs
|
|
5,472,700
|
|
5,230,000
|
||||||||||||
Less: Discounts and debt issuance costs
|
|
21,229
|
|
23,656
|
||||||||||||
|
|
|||||||||||||||
Long-term debt
|
|
$ |
5,451,471
|
|
$ |
5,206,344
|
||||||||||
|
|
(in thousands)
|
|
|
|
Foreign
Currency and Other
(2)
|
|
|
Net
Unrealized
Gain (Loss) on Securities |
|
|
Derivatives
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at November 23, 2019
|
|
|
$ |
(246,558
|
) | $ |
403
|
$ |
(3,926
|
) | $ |
(250,081
|
) | |||||
Other comprehensive income before reclassifications
(1)
|
|
|
21,178
|
180
|
–
|
21,358
|
||||||||||||
Amounts reclassified from Accumulated other comprehensive
(loss)
income
(
1
)
|
|
|
|
–
|
|
|
|
(2
|
)
|
|
|
388
|
(3)
|
|
|
386
|
|
|
|
|
|
||||||||||||||||
Balance at February 15, 2020
|
|
|
$ |
(225,380
|
) | $ |
581
|
$ |
(3,538
|
) | $ |
(228,337
|
) | |||||
|
|
(in thousands)
|
|
|
|
Foreign
Currency and Other
(2)
|
|
Net
Unrealized
Gain (Loss) on Securities |
|
Derivatives
|
|
Total
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Balance at November 17, 2018
|
|
|
$ |
(269,472
|
) | $ |
(950
|
) | $ |
(5,644
|
) | $ |
(276,066
|
) | ||||
Other comprehensive income before reclassifications
(1)
|
|
|
39,332
|
507
|
–
|
39,839
|
||||||||||||
Amounts reclassified from Accumulated other comprehensive income
(
1
)
|
|
|
|
|
–
|
|
|
|
1
|
|
|
|
389
|
(3)
|
|
|
390
|
|
|
|
|
||||||||||||||||
Balance at February 9, 2019
|
|
|
$ |
(230,140
|
) | $ |
(442
|
) | $ |
(5,255
|
) | $ |
(235,837
|
) |
(1)
|
Amounts in parentheses indicate debits to Accumulated other comprehensive loss.
|
(2)
|
Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed
non-U.S.
subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of
non-U.S.
subsidiaries are intended to be permanently reinvested.
|
(3)
|
Represents gains on derivatives, net of taxes of $120 for the twelve weeks ended February 15, 2020 and February 9, 2019, which is recorded in Interest expense, net, on the Condensed Consolidated Statements of Income. See “Note E – Derivative Financial Instruments” for further discussion.
|
(in th
ousands)
|
|
Foreign
Currency and Other
(2)
|
|
|
Net
Unrealized Gain (Loss) on Securities |
|
|
Derivatives
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at August 31, 2019
|
$ |
(265,598
|
) | $ |
591
|
$ |
(4,315
|
) | $ |
(269,322
|
) | |||||
Other comprehensive income (loss) before reclassifications
(1)
|
40,218
|
(53
|
) |
–
|
40,165
|
|||||||||||
Amounts reclassified from Accumulated other comprehensive income (loss)
(1)
|
–
|
43
|
(3)
|
777
|
(4)
|
820
|
||||||||||
|
||||||||||||||||
Balance at February 15, 2020
|
$ |
(225,380
|
) | $ |
581
|
$ |
(3,538
|
) |
$
|
(228,337
|
) | |||||
(in th
ousands)
|
|
Foreign
Currency and Other
(2)
|
|
|
Net
Unrealized Gain (Loss) on Securities |
|
|
Derivatives
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at August 25, 2018
|
$ |
(228,899
|
) | $ |
(873
|
) | $ |
(6,033
|
) | $ |
(235,805
|
) | ||||
Other comprehensive income (loss) before reclassifications
(1)
|
(1,241
|
) |
430
|
–
|
(811
|
) | ||||||||||
Amounts reclassified from Accumulated other comprehensive (loss)
(1)
|
–
|
1
|
778
|
(4)
|
779
|
|||||||||||
Balance at February 9, 2019
|
$
|
(230,140
|
) | $ |
(442
|
) | $ |
(5,255
|
) |
$
|
(235,837
|
) | ||||
|
(1)
|
Amounts in parentheses indicate debits to Accumulated other comprehensive loss.
|
|
(2)
|
Foreign currency is shown net of U.S. tax to account for foreign currency impacts of certain undistributed
non-U.S.
subsidiaries earnings. Other foreign currency is not shown net of additional U.S. tax as other basis differences of
non-U.S.
subsidiaries are intended to be permanently reinvested.
|
|
(3)
|
Represents realized losses on marketable debt securities, net of tax benefit of $12 for the twenty-four weeks ended February 15, 2020, which is recorded in Operating, selling general and administrative expenses on the Condensed Consolidated Statements of Income. See “Note D – Marketable Debt Securities” for further discussion.
|
|
(4)
|
Represents gains on derivatives, net of taxes of $240 for the twenty-four weeks ended February 15, 2020 and February 9, 2019, which is recorded in Interest expense, net, on the Condensed Consolidated Statements of Income. See “Note E – Derivative Financial Instruments” for further discussion.
|
(in thousands)
|
Estimated
Useful Life |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying
Amount |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortizing intangible assets:
|
|
|
|
|
||||||||||||
Technology
|
3-5
years
|
$ |
870
|
$ |
(870
|
) | $ |
–
|
||||||||
Customer relationships
|
3-10
years
|
29,376
|
(25,685
|
) |
3,691
|
|||||||||||
Total intangible assets other than goodwill
|
|
$ |
30,246
|
$ |
(26,555
|
) |
$
|
3,691
|
||||||||
(in thousands)
|
|
Classification
|
|
, 2020
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
||||
Operating
|
Operating lease
right-of-use
assets
|
$ |
2,579,217
|
|||
Finance
|
Property and equipment
|
294,449
|
||||
Total lease assets
|
|
$ |
2,873,666
|
|||
|
||||||
Liabilities:
Current:
|
|
|
||||
Operating
|
Current portion of operating lease liabilities
|
$ |
234,506
|
|||
Finance
|
Accrued expenses and other
|
58,864
|
||||
Noncurrent:
|
|
|
||||
Operating
|
Operating lease liabilities, less current portion
|
2,494,840
|
||||
Finance
|
Other long-term liabilities
|
137,182
|
||||
Total lease liabilities
|
|
$ |
2,925,392
|
|||
(in thousands)
|
|
Statement of Income Location
|
|
Twelve
Weeks Ended
February 15, 2020
|
|
|
Twenty-Four
Weeks Ended
February 15, 2020
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Finance lease cost:
|
|
|
|
|||||||
Amortization of lease assets
|
Depreciation and amortization
|
$ |
12,872
|
$ |
25,528
|
|||||
Interest on lease liabilities
|
Interest expense, net
|
1,282
|
2,667
|
|||||||
Operating lease cost
(1)
|
Selling, general and administrative expenses
|
80,396
|
162,195
|
|||||||
|
||||||||||
Total lease cost
|
$ |
94,550
|
$ |
190,390
|
||||||
(in thousands)
|
|
|
|
Finance
Leases |
|
|
|
|
|
Operating
Leases |
|
|
|
|
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2020
|
|
|
|
$
|
30,419
|
|
|
|
|
|
|
$
|
159,455
|
|
|
|
|
|
|
$
|
189,874
|
|
2021
|
|
|
|
|
61,560
|
|
|
|
|
|
|
|
320,472
|
|
|
|
|
|
|
|
382,032
|
|
2022
|
|
|
|
|
48,694
|
|
|
|
|
|
|
|
310,948
|
|
|
|
|
|
|
|
359,642
|
|
2023
|
|
|
|
|
33,567
|
|
|
|
|
|
|
|
291,256
|
|
|
|
|
|
|
|
324,823
|
|
2024
|
|
|
|
|
11,328
|
|
|
|
|
|
|
|
267,176
|
|
|
|
|
|
|
|
278,504
|
|
Thereafter
|
|
|
|
|
39,598
|
|
|
|
|
|
|
|
2,232,620
|
|
|
|
|
|
|
|
2,272,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total lease payments
|
|
|
|
|
225,166
|
|
|
|
|
|
|
|
3,581,927
|
|
|
|
|
|
|
|
3,807,093
|
|
Less: Interest
|
|
|
|
|
(29,120
|
)
|
|
|
|
|
|
|
(852,581
|
)
|
|
|
|
|
|
|
(881,701
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present value of lease liabilities
|
|
|
|
$
|
196,046
|
|
|
|
|
|
|
$
|
2,729,346
|
|
|
|
|
|
|
$
|
2,925,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 15, 2020
|
|
Weighted-average remaining lease term in years, inclusive of renewal options that are reasonably certain to be
exercised
|
|
|
|
Finance leases – real estate
|
|
|
30
|
Finance leases – vehicles
|
|
|
3
|
Operating leases
|
|
|
15
|
Weighted-average discount rate:
|
|
|
|
Finance leases – real estate
|
|
|
3.23%
|
Finance leases – vehicles
|
|
|
2.72%
|
Operating leases
|
|
|
3.55%
|
(in thousands)
|
|
Twenty-Four
Weeks
Ended
February 15, 2020
|
|
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from operating leases
|
|
|
98,021
|
Leased assets obtained in exchange for new finance lease liabilities
|
|
|
45,582
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
|
174,038
|
|
|
Twelve Weeks Ended
|
|
|
Twenty-Four Weeks Ended
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(in thousands)
|
|
February 15,
2020
|
|
|
February 9,
2019
|
|
|
February 15,
2020
|
|
|
February 9,
2019
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto Parts Stores
|
|
$
|
2,464,988
|
|
|
$
|
2,402,833
|
|
|
$
|
5,208,226
|
|
|
$
|
4,996,273
|
|
Other
|
|
|
48,675
|
|
|
|
47,735
|
|
|
|
98,474
|
|
|
|
96,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,513,663
|
|
|
$
|
2,450,568
|
|
|
$
|
5,306,700
|
|
|
$
|
5,092,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto Parts Stores
|
|
$
|
1,331,270
|
|
|
$
|
1,291,186
|
|
|
$
|
2,797,431
|
|
|
$
|
2,674,751
|
|
Other
|
|
|
34,793
|
|
|
|
33,921
|
|
|
|
69,700
|
|
|
|
67,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
1,366,063
|
|
|
|
1,325,107
|
|
|
|
2,867,131
|
|
|
|
2,742,581
|
|
Operating, selling, general and administrative expenses
|
|
|
(958,125
|
)
|
|
|
(925,087
|
)
|
|
|
(1,959,170
|
)
|
|
|
(1,854,742
|
)
|
Interest expense, net
|
|
|
(44,335
|
)
|
|
|
(41,362
|
)
|
|
|
(88,078
|
)
|
|
|
(80,369
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
$
|
363,603
|
|
|
$
|
358,658
|
|
|
$
|
819,883
|
|
|
$
|
807,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
|
|
B
|
|
A-B=C
|
|
D
|
|
C+D
|
|
||||||||||
(in thousands, except percentage)
|
Fiscal Year
Ended
August 31,
2019
(1)
|
|
Twenty-Four
Weeks Ended
February 9,
2019
|
|
Twenty-Nine
Weeks Ended
August 31,
2019
|
|
Twenty-Four
Weeks Ended
February 15,
2020
|
|
Trailing Four
Quarters Ended
February 15,
2020
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$ |
1,617,221
|
$ |
646,044
|
$ |
971,177
|
$ |
649,620
|
$ |
1,620,797
|
||||||||||
Adjustments:
|
|
|
|
|
|
|||||||||||||||
Interest expense
|
184,804
|
80,369
|
104,435
|
88,078
|
192,513
|
|||||||||||||||
Rent expense
|
332,726
|
144,360
|
188,366
|
150,751
|
339,117
|
|||||||||||||||
Tax effect
(2)
|
(107,129
|
) |
(46,519
|
) |
(60,610
|
) |
(49,438
|
) |
(110,048
|
) | ||||||||||
Deferred tax liabilities, net of repatriation tax
|
(6,340
|
) |
(6,340
|
) |
–
|
–
|
–
|
|||||||||||||
Adjusted
after-tax
return
|
$ |
2,021,282
|
$ |
817,914
|
$ |
1,203,368
|
$ |
839,011
|
$ |
2,042,379
|
||||||||||
Average debt
(3)
|
|
|
|
|
$ |
5,241,651
|
||||||||||||||
Average stockholders’ deficit
(3)
|
|
|
|
|
(1,676,987
|
) | ||||||||||||||
Add : Rent x 6
(4)
|
|
|
|
|
2,034,702
|
|||||||||||||||
Average finance lease liabilities
(3)
|
|
|
|
|
178,416
|
|||||||||||||||
Invested capital
|
|
|
|
|
$ |
5,777,782
|
||||||||||||||
Adjusted
after-tax
ROIC
|
|
|
|
|
35.3%
|
|||||||||||||||
|
A
|
|
B
|
|
A-B=C
|
|
D
|
|
C+D
|
|
||||||||||
(in thousands, except percentage)
|
Fiscal Year
Ended
August 25,
2018
|
|
Twenty-Four
Weeks Ended
February 10,
2018
|
|
Twenty-Eight
Weeks Ended
August 25,
2018
|
|
Twenty-Four
Weeks Ended
February 9,
2019
|
|
Trailing Four
Quarters Ended February 9,
2019
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$ |
1,337,536
|
$ |
570,533
|
$ |
767,003
|
$ |
646,044
|
$ |
1,413,047
|
||||||||||
Adjustments:
|
|
|
|
|
|
|||||||||||||||
Impairment before tax impact
|
193,162
|
193,162
|
–
|
–
|
–
|
|||||||||||||||
Pension termination charges before tax impact
|
130,263
|
–
|
130,263
|
–
|
130,263
|
|||||||||||||||
Interest expense
|
174,527
|
78,229
|
96,298
|
80,369
|
176,667
|
|||||||||||||||
Rent expense
|
315,580
|
142,712
|
172,868
|
144,360
|
317,228
|
|||||||||||||||
Tax effect
(2)
|
(211,806
|
) |
(112,656
|
) |
(99,150
|
) |
(52,861
|
) |
(152,011
|
) | ||||||||||
Deferred tax liabilities, net of repatriation tax
|
(132,113
|
) |
(136,679
|
) |
4,566
|
(6,340
|
) |
(1,774
|
) | |||||||||||
Adjusted
after-tax
return
|
$ |
1,807,149
|
$ |
735,301
|
$ |
1,071,848
|
$ |
811,572
|
$ |
1,883,420
|
||||||||||
Average debt
(3)
|
|
|
|
|
$ |
5,054,281
|
||||||||||||||
Average stockholders’ deficit
(3)
|
|
|
|
|
(1,493,097
|
) | ||||||||||||||
Add: Rent x 6
|
|
|
|
|
1,903,368
|
|||||||||||||||
Average finance lease liabilities
(3)
|
|
|
|
|
156,840
|
|||||||||||||||
Invested capital
|
|
|
|
|
$ |
5,621,392
|
||||||||||||||
Adjusted
after-tax
ROIC
|
|
|
|
|
33.5%
|
|||||||||||||||
(1) |
The fiscal year ended August 31, 2019 consists of 53 weeks.
|
(2) |
Effective tax rate over trailing four quarters ended February 15, 2020 is 20.7% . Effective tax rate over trailing four quarters ended February 9, 2019 is 28.1% for pension termination and 23.5% for interest and rent expense.
|
(3) |
All averages are computed based on trailing 5 quarter balances.
|
(4) |
Effective September 1, 2019, the Company adopted ASU
2016-02,
Leases (Topic 842), the new lease accounting standard that required the Company to recognize operating lease assets and liabilities in the balance sheet. The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the twenty-four weeks ended February 15, 2020.
|
Total lease cost per ASC 842, for the 24 weeks ended February 15, 2020
|
$ |
190,390
|
||
Less: Finance lease interest and amortization
|
(28,195
|
) | ||
Less: Variable operating lease components, related to insurance and common area maintenance for the 24 weeks ended February 15, 2020
|
(11,444
|
) | ||
Rent expense for the 24 weeks ended February 15, 2020
|
150,751
|
|||
Add: Rent expense for the 29 weeks ended August 31, 2019, as previously reported prior to the adoption of ASC 842
|
188,366
|
|||
Rent expense for the 53 weeks ended February 15, 2020
|
$ |
339,117
|
||
Reconciliation of Non-GAAP Financial Measure: Adjusted Debt to EBITDAR
|
|
A
|
|
B
|
|
A-B=C
|
|
D
|
|
C+D
|
|
||||||||||
(in thousands, except ratio)
|
Fiscal Year
Ended
August 31,
2019
|
|
Twenty-Four
Weeks Ended
February 9,
2019
|
|
Twenty-Nine
Weeks Ended
August 31,
2019
|
|
Twenty-Four
Weeks Ended
February 15,
2020
|
|
Trailing Four
Quarters Ended
February 15,
2020
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$ |
1,617,221
|
$ |
646,044
|
$ |
971,177
|
$ |
649,620
|
$ |
1,620,797
|
||||||||||
Add: Interest expense
|
184,804
|
80,369
|
104,435
|
88,078
|
192,513
|
|||||||||||||||
Income tax expense
|
414,112
|
161,426
|
252,686
|
170,263
|
422,949
|
|||||||||||||||
Adjusted EBIT
|
2,216,137
|
887,839
|
1,328,298
|
907,961
|
2,236,259
|
|||||||||||||||
Add: Depreciation expense
|
369,957
|
166,230
|
203,727
|
180,420
|
384,147
|
|||||||||||||||
Rent expense
|
332,726
|
144,360
|
188,366
|
150,751
|
339,117
|
|||||||||||||||
Share-based expense
|
43,255
|
21,558
|
21,697
|
22,107
|
43,804
|
|||||||||||||||
Adjusted EBITDAR
|
$ |
2,962,075
|
$ |
1,219,987
|
$ |
1,742,088
|
$ |
1,261,239
|
$ |
3,003,327
|
||||||||||
Debt
|
|
|
|
|
$ |
5,451,471
|
||||||||||||||
Finance lease liabilities
|
|
|
|
|
196,047
|
|||||||||||||||
Add: Rent x 6
(1)
|
|
|
|
|
2,034,702
|
|||||||||||||||
Adjusted debt
|
|
|
|
|
$ |
7,682,220
|
||||||||||||||
Adjusted debt to EBITDAR
|
|
|
|
|
2.6
|
|||||||||||||||
|
A
|
|
B
|
|
A-B=C
|
|
D
|
|
C+D
|
|
||||||||||
(in thousands, except ratio)
|
Fiscal Year
Ended
August 25,
2018
|
|
Twenty-Four
Weeks Ended
February 10,
2018
|
|
Twenty-Eight
Weeks Ended
August 25,
2018
|
|
Twenty-Four
Weeks Ended
February 9,
2019
|
|
Trailing Four
Quarters Ended
February 9,
2019
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$ |
1,337,536
|
$ |
570,533
|
$ |
767,003
|
$ |
646,044
|
$ |
1,413,047
|
||||||||||
Add: Impairment before tax impact
|
193,162
|
193,162
|
–
|
–
|
–
|
|||||||||||||||
Pension termination charges before tax impact
|
130,263
|
–
|
130,263
|
–
|
130,263
|
|||||||||||||||
Interest expense
|
174,527
|
78,229
|
96,298
|
80,369
|
176,667
|
|||||||||||||||
Income tax expense
|
298,793
|
25,090
|
273,703
|
161,426
|
435,129
|
|||||||||||||||
Adjusted EBIT
|
2,134,281
|
867,014
|
1,267,267
|
887,839
|
2,155,106
|
|||||||||||||||
Add: Depreciation expense
|
345,084
|
157,337
|
187,747
|
166,230
|
353,977
|
|||||||||||||||
Rent expense
|
315,580
|
142,712
|
172,868
|
144,360
|
317,228
|
|||||||||||||||
Share-based expense
|
43,674
|
23,764
|
19,910
|
21,558
|
41,468
|
|||||||||||||||
Adjusted EBITDAR
|
$ |
2,838,619
|
$ |
1,190,827
|
$ |
1,647,792
|
$ |
1,219,987
|
$ |
2,867,779
|
||||||||||
Debt
|
|
|
|
|
$ |
5,111,201
|
||||||||||||||
Finance lease liabilities
|
|
|
|
|
154,923
|
|||||||||||||||
Add: Rent x 6
|
|
|
|
|
1,903,368
|
|||||||||||||||
Adjusted debt
|
|
|
|
|
$ |
7,169,492
|
||||||||||||||
Adjusted debt to EBITDAR
|
|
|
|
|
2.5
|
|||||||||||||||
(1) |
Effective September 1, 2019, the Company adopted ASU
2016-02,
Leases (Topic 842), the new lease accounting standard that required the Company to recognize operating lease assets and liabilities in the balance sheet. The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the twenty-four weeks ended February 15, 2020.
|
Total lease cost per ASC 842, for the 24 weeks ended February 15, 2020
|
$ |
190,390
|
||
Less: Finance lease interest and amortization
|
(28,195
|
) | ||
Less: Variable operating lease components, related to insurance and common area maintenance for the 24 weeks ended February 15, 2020
|
(11,444
|
) | ||
Rent expense for the 24 weeks ended February 15, 2020
|
150,751
|
|||
Add: Rent expense for the 29 weeks ended August 31, 2019, as previously reported prior to the adoption of ASC 842
|
188,366
|
|||
Rent expense for the 53 weeks ended February 15, 2020
|
$ |
339,117
|
||
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
Maximum Dollar
Value that May Yet
Be Purchased Under
the Plans or
Programs
|
|
||||||||
November 24, 2019 to December 21, 2019
|
101,815
|
$ |
1,178.58
|
101,815
|
$ |
1,156,796,693
|
||||||||||
December 22, 2019 to January 18, 2020
|
165,045
|
1,180.58
|
165,045
|
961,947,076
|
||||||||||||
January 19, 2020 to February 15, 2020
|
–
|
–
|
–
|
961,947,076
|
||||||||||||
Total
|
266,860
|
$ |
1,179.82
|
266,860
|
$ |
961,947,076
|
||||||||||
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
3.1
|
||||
3.2
|
||||
15.1
|
||||
31.1
|
||||
31.2
|
||||
32.1*
|
||||
32.2*
|
||||
101. INS
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|||
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|||
104.
|
The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended February 15, 2020, has been formatted in Inline XBRL.
|
AUTOZONE, INC.
|
By:
/s/ WILLIAM T. GILES
|
William T. Giles
|
Chief Financial Officer and Executive Vice President
|
Finance, Information Technology and Store Development
|
(Principal Financial Officer)
|
By:
/s/ CHARLIE PLEAS, III
|
Charlie Pleas, III
|
Senior Vice President, Controller
|
(Principal Accounting Officer)
|
Exhibit 15.1
The Board of Directors and Stockholders
AutoZone, Inc.
We are aware of the incorporation by reference in the following Registration Statements:
Registration Statement (Form S-8 No. 333-139559) pertaining to the AutoZone, Inc. 2006 Stock Option Plan
Registration Statement (Form S-8 No. 333-103665) pertaining to the AutoZone, Inc. 2003 Director Compensation Award Plan
Registration Statement (Form S-8 No. 333-42797) pertaining to the AutoZone, Inc. Amended and Restated Employee Stock Purchase Plan
Registration Statement (Form S-8 No. 333-88241) pertaining to the AutoZone, Inc. Amended and Restated Director Compensation Plan
Registration Statement (Form S-8 No. 333-75140) pertaining to the AutoZone, Inc. Executive Stock Purchase Plan
Registration Statement (Form S-3ASR No. 333-152592) pertaining to a shelf registration to sell debt securities
Registration Statement (Form S-8 No. 333-171186) pertaining to the AutoZone, Inc. 2011 Equity Incentive Award Plan
Registration Statement (Form S-3ASR No. 333-180768) pertaining to a shelf registration to sell debt securities
Registration Statement (Form S-3ASR No. 333-203439) pertaining to a shelf registration to sell debt securities
Registration Statement (Form S-3ASR No. 333-230719) pertaining to a shelf registration to sell debt securities
and in the related Prospectuses of our report dated March 17, 2020, relating to the unaudited condensed consolidated interim financial statements of AutoZone, Inc. that are included in its Form 10-Q for the quarter ended February 15, 2020.
/s/ Ernst & Young LLP
Memphis, Tennessee
March 17, 2020
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William C. Rhodes, III, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q of AutoZone, Inc. (registrant); |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
March 17, 2020
/s/ WILLIAM C. RHODES, III |
William C. Rhodes, III |
Chairman, President and Chief Executive Officer |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William T. Giles, certify that:
1. |
I have reviewed this Quarterly Report on Form 10-Q of AutoZone, Inc. (registrant); |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) |
evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) |
disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
March 17, 2020
/s/ WILLIAM T. GILES |
William T. Giles |
Chief Financial Officer and Executive Vice President |
Finance, Information Technology and Store Development |
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AutoZone, Inc. (the Company) on Form 10-Q for the period ended February 15, 2020, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, William C. Rhodes, III, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(i) |
the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(ii) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 17, 2020
/s/ WILLIAM C. RHODES, III |
William C. Rhodes, III |
Chairman, President and Chief Executive Officer |
(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AutoZone, Inc. (the Company) on Form 10-Q for the period ended February 15, 2020, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, William T. Giles, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(i) |
the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(ii) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 17, 2020
/s/ WILLIAM T. GILES |
William T. Giles |
Chief Financial Officer and Executive Vice President |
Finance, Information Technology and Store Development |
(Principal Financial Officer) |