UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q

☒

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

~~For the quarterly period ended February 10, 2018, or~~

☐		For the quarterly period ended May 7, 2022, or

☐		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period from _______ to ________.

		Commission file number 1-10714

~~For the transition period from _______ to ________.~~

~~Commission file number1-10714~~

AUTOZONE, ~~INC.~~INC.

(Exact name of registrant as specified in its charter)


Nevada		62-1482048
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)


123 South Front Street, Memphis, Tennessee		38103
(Address of principal executive offices)		(Zip Code)

~~(901)~~(901) 495-6500

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act.


Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐ ~~(Do not check if a smaller~~	Smaller reporting ~~company)~~company ☐
Emerging growth company ☐		~~Smaller reporting company ☐~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule~~12b-2~~ 12b-2 of the Exchange Act). Yes ☐No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.01 Par Value – ~~26,900,873~~19,487,599 shares outstanding as of ~~March 9, 2018.~~June 3, 2022.

Table of Contents

TABLE OF CONTENTS


PART I.		FINANCIAL INFORMATION			3
	~~Item 1.~~		~~Financial Statements~~Item 1.		Financial Statements	3
			CONDENSED CONSOLIDATED BALANCE SHEETS			3
			CONDENSED CONSOLIDATED STATEMENTS OF INCOME			4
			CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME			4
			CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS			5
			CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT	6
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			6	7
			REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			17	15
	~~Item 2.~~		Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			18	16
	~~Item 3.~~		Item 3.		Quantitative and Qualitative Disclosures About Market Risk			26	25
	~~Item 4.~~		Item 4.		Controls and Procedures			26	25
PART II.		OTHER INFORMATION			27	25
	~~Item 1.~~		~~Legal Proceedings~~Item 1.		Legal Proceedings	27	25
	~~Item 1A.~~		~~Risk Factors~~Item 1A.		Risk Factors	27	26
	~~Item 2.~~		Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			27	26
	~~Item 3.~~		Item 3.		Defaults Upon Senior Securities			28	26
	~~Item 4.~~		Item 4.		Mine Safety Disclosures			28	26
	~~Item 5.~~		~~Other Information~~Item 5.		Other Information	28	26
	~~Item 6.~~		~~Exhibits~~Item 6.		Exhibits	29	26
SIGNATURES					30
~~EXHIBIT INDEX~~							28

Table of Contents

PART I. FINANCIAL INFORMATION

~~Item 1.~~

~~Financial Statements.~~

Item 1.Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)
February 10,
2018
   August 26,
2017
Assets

Current assets:

Cash and cash equivalents
      $ 288,522    $ 293,270
Accounts receivable
      282,532    280,733
Merchandise inventories
      4,085,528    3,882,086
Other current assets
      169,725    155,166




Total current assets
      4,826,307    4,611,255
Property and equipment:

Property and equipment
      7,041,562    6,873,193
Less: Accumulated depreciation and amortization
      (2,960,261 )    (2,842,175 )




      4,081,301    4,031,018
Goodwill
      302,645    391,887
Deferred income taxes
      34,251    35,308
Other long-term assets
      159,215    190,313




      496,111    617,508




      $ 9,403,719    $ 9,259,781




Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable
      $ 4,365,666    $ 4,168,940
Accrued expenses and other
      576,224    563,350
Income taxes payable
      5,338    34,011




Total current liabilities
      4,947,228    4,766,301
Long-term debt
      5,043,541    5,081,238
Deferred income taxes
      222,932    371,111
Other long-term liabilities
      520,565    469,508
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; 27,465 shares issued and 27,251 shares outstanding as of February 10, 2018; 28,735 shares issued and 27,833 shares outstanding as of August 26, 2017
      275    287
Additionalpaid-in capital
      1,112,748    1,086,671
Retained deficit
      (1,990,317 )    (1,642,387 )
Accumulated other comprehensive loss
      (286,384 )    (254,557 )
Treasury stock, at cost
      (166,869 )    (618,391 )




Total stockholders’ deficit
      (1,330,547 )    (1,428,377 )




      $     9,403,719    $     9,259,781


	May 7,		August 28,
(in thousands)	2022		2021

Assets
Current assets:
Cash and cash equivalents	$	263,044	$	1,171,335
Accounts receivable		439,820		378,392
Merchandise inventories		5,313,114		4,639,813
Other current assets		238,743		225,763
Total current assets		6,254,721		6,415,303

Property and equipment:
Property and equipment		9,139,576		8,807,178
Less: Accumulated depreciation and amortization		(4,167,950)		(3,950,287)
		4,971,626		4,856,891

Operating lease right-of-use assets		2,764,631		2,718,712
Goodwill		302,645		302,645
Deferred income taxes		40,707		41,043
Other long-term assets		186,235		181,605
		3,294,218		3,244,005
Total assets	$	14,520,565	$	14,516,199

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	6,793,205	$	6,013,924
Current portion of operating lease liabilities		268,975		236,568
Accrued expenses and other		925,271		1,039,788
Income taxes payable		76,625		79,474
Total current liabilities		8,064,076		7,369,754

Long-term debt		6,057,444		5,269,820
Operating lease liabilities, less current portion		2,659,535		2,632,842
Deferred income taxes		418,869		337,125
Other long-term liabilities		707,871		704,194

Commitments and contingencies

Stockholders’ deficit:
Preferred stock, authorized 1,000 shares; 0 shares issued		—		—
Common stock, par value $.01 per share, authorized 200,000 shares; 20,707 shares issued and 19,576 shares outstanding as of May 7, 2022; 23,007 shares issued and 21,138 shares outstanding as of August 28, 2021		207		230
Additional paid-in capital		1,315,717		1,465,669
Retained deficit		(2,138,160)		(419,829)
Accumulated other comprehensive loss		(302,191)		(307,986)
Treasury stock, at cost		(2,262,803)		(2,535,620)
Total stockholders’ deficit		(3,387,230)		(1,797,536)
Total liabilities and stockholders' deficit	$	14,520,565	$	14,516,199

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Twelve Weeks Ended				Thirty-Six Weeks Ended
	May 7,		May 8,		May 7,		May 8,
(in thousands, except per share data)	2022		2021		2022		2021

Net sales	$	3,865,222	$	3,651,023	$	10,903,875	$	9,716,101
Cost of sales, including warehouse and delivery expenses		1,858,808		1,736,077		5,187,075		4,566,155
Gross profit		2,006,414		1,914,946		5,716,800		5,149,946
Operating, selling, general and administrative expenses		1,220,744		1,111,441		3,549,885		3,249,449
Operating profit		785,670		803,505		2,166,915		1,900,497
Interest expense, net		41,888		45,026		127,642		137,217
Income before income taxes		743,782		758,479		2,039,273		1,763,280
Income tax expense		151,211		162,315		419,712		378,737
Net income	$	592,571	$	596,164	$	1,619,561	$	1,384,543

Weighted average shares for basic earnings per share		19,798		21,956		20,433		22,609
Effect of dilutive stock equivalents		616		559		627		545
Weighted average shares for diluted earnings per share		20,414		22,515		21,060		23,154

Basic earnings per share	$	29.93	$	27.15	$	79.26	$	61.24
Diluted earnings per share	$	29.03	$	26.48	$	76.90	$	59.80

See Notes to Condensed Consolidated Financial Statements.

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	Twelve Weeks Ended				Thirty-Six Weeks Ended
	May 7,		May 8,		May 7,		May 8,
(in thousands)	2022		2021		2022		2021

Net income	$	592,571	$	596,164	$	1,619,561	$	1,384,543
Other comprehensive income (loss):
Foreign currency translation adjustments		8,531		(3,865)		6,280		48,731
Unrealized losses on marketable debt securities, net of taxes		(1,138)		(337)		(2,438)		(838)
Net derivative activities, net of taxes		579		659		1,953		1,977
Total other comprehensive income (loss)		7,972		(3,543)		5,795		49,870
Comprehensive income	$	600,543	$	592,621	$	1,625,356	$	1,434,413

   Twelve Weeks Ended    Twenty-Four Weeks Ended
(in thousands, except per share data)
   February 10,
2018 February 11,
2017    February 10,
2018    February 11,
2017
Net sales
   $   2,413,026 $   2,289,219    $   5,002,156    $   4,757,065
Cost of sales, including warehouse and delivery expenses
   1,135,980 1,083,683    2,359,263    2,249,988






Gross profit
   1,277,046 1,205,536    2,642,893    2,507,077
Operating, selling, general and administrative expenses
   1,071,948 821,567    1,969,041    1,664,206






Operating profit
   205,098 383,969    673,852    842,871
Interest expense, net
   39,340 34,198    78,229    67,504






Income before income taxes
   165,758 349,771    595,623    775,367
Income taxes
   (123,772 ) 112,626    25,090    260,097






Net income
   $ 289,530 $ 237,145    $ 570,533    $ 515,270






Weighted average shares for basic earnings per share
   27,355 28,606    27,496    28,779
Effect of dilutive stock equivalents
   527 734    493    743






Weighted average shares for diluted earnings per share
   27,882 29,340    27,989    29,522






Basic earnings per share
   $ 10.58 $ 8.29    $ 20.75    $ 17.90






Diluted earnings per share
   $ 10.38 $ 8.08    $ 20.38    $ 17.45

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE INCOME~~CASH FLOWS

(Unaudited)

   Twelve Weeks Ended Twenty-Four Weeks Ended
(in thousands)
   February 10,
2018 February 11,
2017 February 10,
2018 February 11,
2017
Net income
   $      289,530 $      237,145 $      570,533 $      515,270
Other comprehensive income (loss):

Pension liability adjustments, net of taxes⁽¹⁾
   2,361 1,953 3,677 3,769
Foreign currency translation adjustments
   7,507 (2,342 ) (35,710 ) (42,933 )
Unrealized losses on marketable securities, net of taxes⁽²⁾
   (258 ) (46 ) (574 ) (275 )
Net derivative activities, net of taxes⁽³⁾
   457 321 780 651


Total other comprehensive income (loss)
   10,067 (114 ) (31,827 ) (38,788 )


Comprehensive income
   $ 299,597 $ 237,031 $ 538,706 $ 476,482

~~(1)~~

Pension liability adjustments are presented net of taxes of $117 in fiscal 2018 and $1,248 in fiscal 2017 for the twelve weeks ended and $1,278 in fiscal 2018 and $2,634 in fiscal 2017 for the twenty-four weeks ended.

~~(2)~~

Unrealized gains on marketable securities are presented net of taxes of $139 in fiscal 2018 and $2 in fiscal 2017 for the twelve weeks ended and $309 in fiscal 2018 and $146 in fiscal 2017 for the twenty-four weeks ended.

~~(3)~~

Net derivative activities are presented net of taxes of $52 in fiscal 2018 and $188 in fiscal 2017 for the twelve weeks ended and $237 in fiscal 2018 and $367 in fiscal 2017 for the twenty-four weeks ended.


	Thirty-Six Weeks Ended
	May 7,		May 8,
(in thousands)	2022		2021

Cash flows from operating activities:
Net income	$	1,619,561	$	1,384,543
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment and intangibles		301,365		278,044
Amortization of debt origination fees		7,826		9,326
Deferred income taxes		80,778		6,047
Share-based compensation expense		49,058		38,061
Changes in operating assets and liabilities:
Accounts receivable		(61,361)		8,335
Merchandise inventories		(671,087)		(162,271)
Accounts payable and accrued expenses		655,227		635,058
Income taxes payable		13,883		22,989
Other, net		(12,136)		10,215
Net cash provided by operating activities		1,983,114		2,230,347

Cash flows from investing activities:
Capital expenditures		(369,350)		(375,653)
Purchase of marketable debt securities		(46,540)		(52,553)
Proceeds from sale of marketable debt securities		37,918		72,268
Investment in tax credit equity investments		(21,398)		(3,908)
Proceeds from disposal of capital assets and other, net		38,651		1,183
Net cash used in investing activities		(360,719)		(358,663)

Cash flows from financing activities:
Net proceeds from commercial paper		1,283,310		—
Repayment of debt		(500,000)		(250,000)
Net proceeds from sale of common stock		98,090		121,924
Purchase of treasury stock		(3,359,994)		(2,478,322)
Repayment of principal portion of finance lease liabilities		(48,867)		(44,844)
Other, net		(3,362)		—
Net cash used in financing activities		(2,530,823)		(2,651,242)

Effect of exchange rate changes on cash		137		4,389

Net decrease in cash and cash equivalents		(908,291)		(775,169)
Cash and cash equivalents at beginning of period		1,171,335		1,750,815
Cash and cash equivalents at end of period	$	263,044	$	975,646

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

AUTOZONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~STOCKHOLDERS’ DEFICIT

(Unaudited)

       Twenty-Four Weeks Ended
(in thousands)
       February 10,
2018     February 11,
2017
Cash flows from operating activities:

Net income
   $ 570,533 $ 515,270
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property and equipment and intangibles
   157,337 144,645
Amortization of debt origination fees
   3,927 3,948
Deferred income taxes
   (150,613 ) 2,777
Share-based compensation expense
   23,764 20,711
Asset impairments
   193,162 –
Changes in operating assets and liabilities:

Accounts receivable
   (3,139 ) 38,697
Merchandise inventories
   (269,210 ) (290,921 )
Accounts payable and accrued expenses
   211,902 24,882
Income taxes payable
   (6,967 ) 82,620
Other, net
   21,647 21,269


Net cash provided by operating activities
   752,343 563,898


Cash flows from investing activities:

Capital expenditures
   (214,747 ) (216,103 )
Purchase of marketable securities
   (80,828 ) (27,798 )
Proceeds from sale of marketable securities
   63,102 40,473
Disposal of capital assets and other, net
   1,866 714


Net cash used in investing activities
   (230,607 ) (202,714 )


Cash flows from financing activities:

Net (payments) proceeds of commercial paper
   (39,600 ) 625,600
Repayment of debt
   – (400,000 )
Net proceeds from sale of common stock
   65,244 23,302
Purchase of treasury stock
   (527,454 ) (560,619 )
Payments of capital lease obligations
   (21,247 ) (22,627 )
Other, net
   (1,250 ) (2,224 )


Net cash used in financing activities
   (524,307 ) (336,568 )


Effect of exchange rate changes on cash
   (2,177 ) (3,701 )


Net (decrease) increase in cash and cash equivalents
   (4,748 ) 20,915
Cash and cash equivalents at beginning of period
   293,270 189,734


Cash and cash equivalents at end of period
   $ 288,522 $ 210,649


	Twelve Weeks Ended May 7, 2022
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at February 12, 2022	20,650	$	206	$	1,266,015	$	(2,730,731)	$	(310,163)	$	(1,362,804)	$	(3,137,477)
Net income	—		—		—		592,571		—		—		592,571
Total other comprehensive income	—		—		—		—		7,972		—		7,972
Purchase of 449 shares of treasury stock	—		—		—		—		—		(899,999)		(899,999)
Issuance of common stock under stock options and stock purchase plans	57		1		31,628		—		—		—		31,629
Share-based compensation expense	—		—		18,074		—		—		—		18,074
Balance at May 7, 2022	20,707	$	207	$	1,315,717	$	(2,138,160)	$	(302,191)	$	(2,262,803)	$	(3,387,230)


	Twelve Weeks Ended May 8, 2021
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at February 13, 2021	22,796	$	228	$	1,314,424	$	(1,801,764)	$	(300,839)	$	(735,622)	$	(1,523,573)
Net income	—		—		—		596,164		—		—		596,164
Total other comprehensive loss	—		—		—		—		(3,543)		—		(3,543)
Purchase of 663 shares of treasury stock	—		—		—		—		—		(899,999)		(899,999)
Issuance of common stock under stock options and stock purchase plans	101		1		55,413		—		—		—		55,414
Share-based compensation expense	—		—		12,145		—		—		—		12,145
Balance at May 8, 2021	22,897	$	229	$	1,381,982	$	(1,205,600)	$	(304,382)	$	(1,635,621)	$	(1,763,392)


	Thirty-Six Weeks Ended May 7, 2022
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at August 28, 2021	23,007	$	230	$	1,465,669	$	(419,829)	$	(307,986)	$	(2,535,620)	$	(1,797,536)
Net income	—		—		—		1,619,561		—		—		1,619,561
Total other comprehensive income	—		—		—		—		5,795		—		5,795
Retirement of treasury shares	(2,484)		(25)		(294,894)		(3,337,892)		—		3,632,811		—
Purchase of 1,746 shares of treasury stock	—		—		—		—		—		(3,359,994)		(3,359,994)
Issuance of common stock under stock options and stock purchase plans	184		2		98,084		—		—		—		98,086
Share-based compensation expense	—		—		46,858		—		—		—		46,858
Balance at May 7, 2022	20,707	$	207	$	1,315,717	$	(2,138,160)	$	(302,191)	$	(2,262,803)	$	(3,387,230)


	Thirty-Six Weeks Ended May 8, 2021
								Accumulated
	Common			Additional				Other
	Shares	Common		Paid-in		Retained		Comprehensive		Treasury
(in thousands)	Issued	Stock		Capital		Deficit		Loss		Stock		Total

Balance at August 29, 2020	23,697	$	237	$	1,283,495	$	(1,450,970)	$	(354,252)	$	(356,487)	$	(877,977)
Net income	—		—		—		1,384,543		—		—		1,384,543
Total other comprehensive income	—		—		—		—		49,870		—		49,870
Retirement of treasury shares	(1,044)		(10)		(60,005)		(1,139,173)		—		1,199,188		—
Purchase of 1,999 shares of treasury stock	—		—		—		—		—		(2,478,322)		(2,478,322)
Issuance of common stock under stock options and stock purchase plans	244		2		121,922		—		—		—		121,924
Share-based compensation expense	—		—		36,570		—		—		—		36,570
Balance at May 8, 2021	22,897	$	229	$	1,381,982	$	(1,205,600)	$	(304,382)	$	(1,635,621)	$	(1,763,392)

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

AUTOZONE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A – General

The accompanying unaudited ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and are presented in accordance with the requirements of Form10-Q and Article 10 of RegulationS-X of the Securities and Exchange Commission’s (the “SEC”) rules and regulations. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP 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 related notes included in the AutoZone, Inc. (“AutoZone” or the “Company”) Annual Report on Form10-K for the year ended August ~~26, 2017.~~28, 2021.

Operating results for the twelve and ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending August ~~25, 2018.~~27, 2022. 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. The fourth quarters ~~for~~of fiscal ~~2018~~2022 and ~~2017~~2021 each have 16 weeks. Additionally, the Company’s 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 months of December and January.

Recently Issued Accounting ~~Pronouncements:~~Pronouncements

In ~~May 2014,~~November 2021, the Financial Accounting Standards Board ~~(“FASB”)~~ issued Accounting ~~Standard~~Standards Update (“ASU”)~~2014-09,~~ 2021-10, ~~Revenue from Contracts with Customers.~~Government Assistance (Topic 832) – Disclosures by Business Entities about Government Assistance ~~This~~. The update increases the disclosures for entities receiving governmental assistance for more transparency. ASU ~~along with subsequent ASU’s issued to clarify certain provisions of ASU2014-09,~~2021-10 is a comprehensive new revenue recognition model that expands disclosure requirements and requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. It also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This update will be effective for ~~the Company at the~~fiscal years beginning of its fiscal 2019 year. The Company established a cross-functional implementation team to evaluate and identify the impact of the new standard on the Company’s financial position, results of operations and cash flows. Based on the preliminary work completed, the Company is considering the potential implications of the new standard on the Company’s recognition of customer related accounts receivable, warranty costs, the Company’s loyalty program, gift cards, subscriptions and other related topics in addition to all applicable financial statement disclosures required by the new guidance. The Company is currently in the process of identifying changes to its business processes, systems and controls to support adoption of the new standard. At this time, the team has not completed its full analysis on impact or means of adoption.

~~In February 2016, the FASB issued ASU2016-02,~~~~Leases (Topic 842).~~~~ASU2016-02~~ ~~requires an entity to recognize aright-of-use~~ asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Early adoption is permitted. The updated guidance requires a modified retrospective adoption. This update will be effective for the Company at the beginning of its fiscal 2020 year. The Company established a cross-functional implementation team to evaluate and identify the impact of ASU~~2016-02~~ on the Company’s financial position, results of operations and cash flows. Based on the preliminary work completed, the Company is considering the possible implications of the new standard, including the discount rate to be used in valuing new and existing leases, the treatment of existing favorable and unfavorable lease agreements acquired in connection with previous acquisitions, procedural and operational changes that may be necessary to comply with the provisions of the guidance and all applicable financial statement disclosures required by the new guidance. The Company is also in the process of identifying changes to its business processes, systems and controls to support adoption of the new standard. At this time, the team has not completed its full analysis and is unable to quantify the impact; however, the Company believes the adoption of the new guidance will have a material impact on the total assets and total liabilities reported on the Company’s consolidated balance sheets.

~~In October 2016, the FASB issued ASU2016-16,~~~~Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory~~~~. ASU2016-16~~ requires that an entity recognize the income tax consequences of an intra-entity transfer of assets other than inventory when the transfer occurs. The guidance must be applied using the modified retrospective basis. The Company does not expect the provisions of ASU~~2016-16~~ ~~to have a material impact on its financial statements. This update will be effective for the Company at the beginning of its fiscal 2019 year.~~

~~In January 2017, the FASB issued ASU2017-01,~~~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~~~. ASU2017-01~~ provides guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The updated guidance requires a prospective adoption.after December 15, 2021. Early adoption is permitted. The Company ~~does not expect~~will adopt this standard beginning with its first quarter ending November 19, 2022. The Company is currently evaluating the ~~provisions of ASU2017-01~~new guidance to determine the impact the adoption will have ~~a material impact~~ on ~~its~~the Company's consolidated financial ~~statements. This update will be effective for the Company at the beginning of its fiscal 2019 year.~~

statements and related disclosures.

~~In February 2018, the FASB issued ASU2018-02,~~~~Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income~~~~. ASU2018-02~~ allows a reclassification from accumulated other comprehensive income to retained earnings for “stranded tax effects” resulting from the Tax Cuts and Jobs Act (“Tax Reform”). The guidance states that because the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate is required to be included in income from continuing operations, the tax effects of items within accumulated other comprehensive income (“stranded tax effects”) do not reflect the appropriate tax rate. As stated within the guidance, the amendments in this update should be applied retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Reform is recognized. At this time, the Company is in the process of evaluating the impact of the provisions of ASU~~2018-02~~ ~~on its consolidated financial statements.~~R

Note B – Share-Based Payments

AutoZone maintains several equity incentive plans, which provide equity-based compensation to non-employee directors and eligible employees for their service to AutoZone, its subsidiaries or affiliates. The Company 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, restricted stock grants, restricted stock unit grants, ~~and the discount~~stock appreciation rights, discounts on shares sold to employees under share purchase ~~plans.~~plans and other awards. Additionally, directors’ fees are paid in restricted stock units with value equivalent to the value of shares of common stock as of the grant date. The change in fair value of liability-based stock awards is also recognized in share-based compensation expense.

Stock Options:

The Company made stock option grants of 164,262 shares during the thirty-six week period ended May 7, 2022 and granted options to purchase 196,520 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.

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The weighted average fair value of the stock option awards granted during the thirty-six week periods ended May 7, 2022 and May 8, 2021, using the Black-Scholes-Merton multiple-option pricing valuation model, was $463.09 and $299.99 per share, respectively, using the following weighted average key assumptions:


	Thirty-Six Weeks Ended
	May 7,		May 8,
	2022		2021

Expected price volatility	28	%	28	%
Risk-free interest rate	1.1	%	0.4	%
Weighted average expected lives (in years)	5.6		5.6
Forfeiture rate	10	%	10	%
Dividend yield	0	%	0	%

During the thirty-six week period ended May 7, 2022, 179,440 stock options were exercised at a weighted average exercise price of $574.79. In the comparable prior year period, 239,177 stock options were exercised at a weighted average exercise price of $513.51.

As of May 7, 2022, total unrecognized share-based expense related to stock options, net of estimated forfeitures, was approximately $77.3 million, before income taxes, which we expect to recognize over an estimated weighted average period of 3.3 years.

Restricted Stock Units:

Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant. Grants of employee restricted stock units vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line basis over the four-year service period, less estimated forfeitures, which are consistent with stock option forfeiture assumptions. Grants of non-employee director restricted stock units are made and expensed on January 1 of each year, as they vest immediately.

As of May 7, 2022, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $12.3 million, before income taxes, which we expect to recognize over an estimated weighted average period of 2.9 years.

Transactions related to restricted stock units for the thirty-six weeks ended May 7, 2022 were as follows:


		Weighted-
	Number	Average Grant
	of Shares	Date Fair Value

Nonvested at August 28, 2021	15,751	$	1,005.41
Granted	5,551		1,740.19
Vested	(6,572)		1,159.53
Canceled or forfeited	(1,698)		1,145.06
Nonvested at May 7, 2022	13,032	$	1,222.55

Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was ~~$12.7~~$18.3 million for the twelve week period ended ~~February 10, 2018,~~May 7, 2022, and ~~$10.9~~$13.9 million for the comparable prior year period. ~~Share-based~~Total share-based compensation expense was ~~$23.8~~$49.1 million for the ~~twenty-four~~thirty-six week period ended ~~February 10, 2018,~~May 7, 2022, and ~~$20.7~~$38.1 million for the comparable prior year period.

~~During~~

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For the ~~twenty-four~~twelve and thirty-six week ~~period~~periods ended ~~February 10, 2018, 234,114~~May 7, 2022, 120,515 and 136,994, respectively, stock options were ~~exercised at a weighted average exercise price of $278.69. In~~excluded from the diluted earnings per share computation because they would have been anti-dilutive. For the comparable prior year ~~period, 91,136~~periods, 142,660 and 166,456 anti-dilutive stock options were ~~exercised at a weighted average exercise price of $265.16.~~

~~The Company made stock option grants of 283,290 shares during~~excluded from the twenty-four week period ended February 10, 2018, and granted options to purchase 290,805 shares during the comparable prior year period. The weighted average fair value of the stock option awards granted during the twenty-four week period ended February 10, 2018, and February 11, 2017, using the Black-Scholes-Merton multiple-option pricing valuation model, was $128.99 and $139.80dilutive earnings per share ~~respectively, using the following weighted average key assumptions:~~computation.

   Twenty-Four Weeks Ended

       February 10,
2018        February 11,
2017
Expected price volatility
   20%        18%
Risk-free interest rate
   1.9%        1.2%
Weighted average expected lives (in years)
   5.1        5.1
Forfeiture rate
   10%        10%
Dividend yield
   0%        0%

See AutoZone’s Annual Report on Form10-K for the year ended August ~~26, 2017,~~28, 2021 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 ~~2011~~AutoZone, Inc. 2020 Omnibus Incentive Award Plan and the 2020 Director Compensation ~~Program and the 2014 Director Compensation Plan.~~ Program.

For the twelve week period ended February 10, 2018, 609,435 stock options were excluded from the diluted earnings per share computation because they would have been anti-dilutive. For the comparable prior year period, 645,561 anti-dilutive shares were excluded from the dilutive earnings per share computation. There were 844,912 anti-dilutive shares excluded from the diluted earnings per share computation for the twenty-four week period ended February 10, 2018, and 605,065 anti-dilutive shares excluded for the comparable prior year period.

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~~In accordance with ASC 820, Fair Value Measurements and Disclosures, the Company uses the fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are set forth below:

Level 1 inputs—unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 inputs—inputs other than quoted market prices included within Level 1 that are observable, either directly or indirectly, for the asset or liability.

Level 3 inputs—unobservable inputs for the asset or liability, which are based on the Company’s own assumptions as there is little, if any, observable activity in identical assets or liabilities.

~~Financial Assets & Liabilities~~Marketable Debt Securities Measured at Fair Value on a Recurring Basis

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


	February 10, 2018

													May 7, 2022
(in thousands)	Level 1			Level 2			Level 3			Fair Value			Level 1		Level 2		Level 3		Fair Value


Other current assets		$	30,007		$	1,928		$	–		$	31,935	$	57,927	$	335	$	—	$	58,262
Other long-term assets			61,534			24,248			–			85,782		49,213		11,934		—		61,147

		$	91,541		$	26,176		$	�� –		$	117,717


	August 26, 2017
(in thousands)	Level 1			Level 2			Level 3			Fair Value

Other current assets		$	18,453		$	120		$	–		$	18,573
Other long-term assets			53,319			28,981			–			82,300

		$	71,772		$	29,101		$	–		$	100,873

													$	107,140	$	12,269	$	—	$	119,409


	August 28, 2021
(in thousands)	Level 1		Level 2		Level 3		Fair Value

Other current assets	$	46,007	$	—	$	—	$	46,007
Other long-term assets		54,105		13,806		—		67,911
	$	100,112	$	13,806	$	—	$	113,918

At ~~February 10, 2018,~~May 7, 2022, the fair value measurement amounts for assets and liabilities recorded in the accompanying Condensed Consolidated Balance ~~Sheet~~Sheets consisted of short-term marketable debt securities, ~~of $31.9 million,~~ which are included within Other current assets, and long-term marketable debt securities, ~~of $85.8 million,~~ 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. The fair values of the marketable debt securities, by asset class, are described in “Note D – Marketable Debt Securities.”

~~Non-Financial~~ ~~Assets and Liabilities Measured at Fair Value on aNon-Recurring~~ ~~Basis~~9

~~Certainnon-financial~~ ~~assets and liabilities are required to be measured at fair value on anon-recurring~~ ~~basis in certain circumstances, including the event~~Table of ~~impairment. Thesenon-financial~~ assets and liabilities could include assets and liabilities acquired in an acquisition as well as goodwill, intangible assets and property, plant and equipment that are determined to be impaired. During the second quarter, the Company recorded impairment charges related to its Interamerican Motor Corporation (“IMC”) and AutoAnything businesses as the Company determined that the approximate fair value less costs to sell the businesses was significantly lower than the carrying value of the net assets. Based on the latest offers received as of the end of the second quarter from potential acquirers of these business operations, the Company recorded impairment charges related to goodwill, intangible assets and property, plant and equipment in order to record these assets at fair value. See “Note L – Assets Impairments” for further discussion. The fair value remeasurements are based on Level 2 inputs as defined in the fair value hierarchy. As of February 10, 2018 and August 26, 2017, the Company did not have any other significant~~non-financial~~ ~~assets or liabilities that had been measured at fair value on anon-recurring~~ ~~basis subsequent to initial recognition.~~Contents

Financial Instruments not Recognized at Fair Value

The Company has financial instruments, including cash and cash equivalents, accounts receivable, other current assets and accounts payable. 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 HF – Financing.”

Note D – Marketable Debt Securities

Marketable debt securities are carried at fair value, with unrealized gains and losses, net of income taxes, recorded in Accumulated other comprehensive loss until realized, and any credit risk related losses are recognized in net income in the period incurred. The Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” ~~Unrealized gains (losses) on~~

The Company’s available-for-sale marketable ~~securities are recorded in Accumulated other comprehensive loss. The Company’savailable-for-sale~~ ~~marketable~~debt securities consisted of the following:


	February 10, 2018

														May 7, 2022
														Amortized		Gross		Gross
														Cost		Unrealized		Unrealized		Fair
(in thousands)	Amortized Cost Basis			Gross Unrealized Gains			Gross Unrealized Losses				Fair Value			Basis		Gains		Losses		Value

Corporate securities		$	65,261		$	–		$	(533	)		$	64,728

Corporate debt securities														$	16,724	$	11	$	(264)	$	16,471
Government bonds			22,996			–			(129	)			22,867		82,988		12		(1,672)		81,328
Mortgage-backed securities			4,005			–			(79	)			3,926		5,120		18		(227)		4,911
Asset-backed securities and other			26,348			–			(152	)			26,196		16,958		1		(260)		16,699

		$	118,610		$	–		$	(893	)		$	117,717


	August 26, 2017
(in thousands)	Amortized Cost Basis			Gross Unrealized Gains			Gross Unrealized Losses				Fair Value

Corporate securities		$	39,917		$	73		$	(13	)		$	39,977
Government bonds			31,076			49			(74	)			31,051
Mortgage-backed securities			4,850			2			(42	)			4,810
Asset-backed securities and other			25,042			28			(35	)			25,035

		$	100,885		$	152		$	(164	)		$	100,873

														$	121,790	$	42	$	(2,423)	$	119,409


	August 28, 2021
	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized		Fair
(in thousands)	Basis		Gains		Losses		Value

Corporate debt securities	$	23,650	$	329	$	(2)	$	23,977
Government bonds		65,416		338		(2)		65,752
Mortgage-backed securities		6,552		58		(8)		6,602
Asset-backed securities and other		17,551		43		(7)		17,587
	$	113,169	$	768	$	(19)	$	113,918

The debt securities held at ~~February 10, 2018,~~May 7, 2022, had effective maturities ranging from less than one year to approximately three years. ~~The~~At May 7, 2022, the Company ~~did not realize any material gains or losses on its marketable securities during the twenty-four week period ended February 10, 2018.~~

~~The Company holds 112~~held 65 securities that are in an unrealized loss position of approximately $893 thousand at February 10, 2018. The Company has the intent and ability to hold these investments until recovery of fair value or maturity, and does not deem the investments to be impaired on an other than temporary basis.$2.4 million. In evaluating whether a credit loss exists for the securities, ~~are deemed to be impaired on an other than temporary basis,~~ the Company considers factors such as the ~~duration and~~ 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. An allowance for credit losses was deemed unnecessary given consideration of the factors above.

Included above in total available-for-sale marketable debt securities are ~~$85.0~~$91.2 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.

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Note E ~~– Derivative Financial Instruments~~

At February 10, 2018, the Company had $9.0 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. The Company reclassified $509 thousand of net losses from Accumulated other comprehensive loss to interest expense for the twelve weeks ended February 10, 2018 and the comparable prior year period. During the twenty-four week period ended February 10, 2018 and the comparable prior year period, the Company reclassified $1.0 million of net losses from Accumulated other comprehensive loss to Interest expense. The Company expects to reclassify $2.2 million of net losses from Accumulated other comprehensive loss to Interest expense over the next 12 months.

~~Note F~~ – Merchandise Inventories

~~Merchandise inventories are stated at the lower of cost or market.~~ Merchandise inventories include related purchasing, storage and handling costs. Inventory cost has been determined using thelast-in,first-out (“LIFO”) method stated at the lower of cost or net realizable value for domestic inventories and the weighted average cost method stated at the lower of cost or net realizable value for Mexico and Brazil inventories. Due to historical price deflation on the Company’s merchandise purchases, the Company has exhausted its LIFO reserve balance. The Company’s policy is not to write up inventory in excess of replacement ~~cost, which is based on average~~ cost. The difference between LIFO cost and replacement cost, which ~~will be~~has been reduced ~~upon experiencing~~due to price inflation on the Company’s merchandise purchases, was ~~$433.5~~$91.3 million at ~~February 10, 2018~~May 7, 2022 and ~~$414.9~~$335.3 million at August ~~26, 2017.~~

28, 2021.

Note ~~G – Pension and Savings Plans~~

~~The components of net periodic pension expense related to the Company’s pension plans consisted of the following:~~

   Twelve Weeks Ended Twenty-Four Weeks Ended
(in thousands)
   February 10,
2018 February 11,
2017 February 10,
2018   February 11,
2017
Interest cost
   $ 2,390 $ 2,385 $ 4,780 $ 4,770
Expected return on plan assets
   (4,384 ) (4,628 ) (8,768 ) (9,257 )
Amortization of net loss
   2,478 3,201 4,955 6,403


Net periodic pension expense
   $           484 $           958 $           967 $       1,916

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 twenty-four weeks period ended February 10, 2018, the Company did not make contributions to its funded plan.

On December 19, 2017, the Board of Directors approved a resolution to terminate the Company’s pension plans, effective March 15, 2018. Benefit accruals have been frozen, and the plan closed to new participants on January 1, 2003. The Company has commenced the plan termination process and expects to distribute a portion of the pension plan assets as lump sum payments with the remaining balance transferred to an insurance company in the form of an annuity. The total payments distributed will depend on the participation rate of eligible participants. Based on the estimated value of assets held in the plan, the Company currently estimates that a cash contribution of approximately $20—$30 million will be required to fully fund the plan’s liabilities at termination. The pension plan termination is expected to be completed by the end of fiscal 2018, and the Company is in the process of evaluating the impact of the termination and future settlement accounting on its consolidated financial statements and related disclosures.

~~Note H~~F – Financing

The Company’s ~~long-term~~ debt consisted of the following:


	May 7,		August 28,
(in thousands)	2022		2021

3.700% Senior Notes due April 2022, effective interest rate of 3.85%	$	—	$	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
3.625% Senior Notes due April 2025, effective interest rate 3.78%		500,000		500,000
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
4.000% Senior Notes due April 2030, effective interest rate 4.09%		750,000		750,000
1.650% Senior Notes due January 2031, effective interest rate of 2.19%		600,000		600,000
Commercial paper, weighted average interest rate of 0.80% at May 7, 2022		1,283,310		—
Total debt before discounts and debt issuance costs		6,083,310		5,300,000
Less: Discounts and debt issuance costs		25,866		30,180
Long-term Debt	$	6,057,444	$	5,269,820

(in thousands)
       February 10,
2018          August 26,
2017
7.125% Senior Notes due August 2018, effective interest rate of 7.28%
   $ 250,000    $ 250,000
1.625% Senior Notes due April 2019, effective interest rate of 1.77%
   250,000    250,000
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
3.250% 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
Commercial paper, weighted average interest rate of 1.80% and 1.44% at February 10, 2018 and August 26, 2017, respectively
   1,115,500    1,155,100




Total debt before discounts and debt issuance costs
   5,065,500    5,105,100
Less: Discounts and debt issuance costs
   21,959    23,862




Long-term debt
   $     5,043,541    $     5,081,238

~~As of February 10, 2018, the commercial paper borrowings and the $250 million 7.125% Senior Notes due August 2018 were classified as long-term in the accompanying Consolidated Balance Sheets as~~On November 15, 2021, the Company ~~had the ability~~amended and ~~intent to refinance on a long-term basis through available capacity in~~restated its ~~revolving credit facility. As of February 10, 2018, the Company had $1.997 billion of availability under its $2.0 billion~~existing revolving credit facility ~~which would allow it~~(the “Revolving Credit Agreement”) pursuant to ~~replace these short-term obligations with long-term financing facilities.~~

The Company entered into a Master Extension, New Commitment and Amendment Agreement dated as of November 18, 2017 (the “Extension Amendment”) to the Third Amended and Restated Credit Agreement dated as of November 18, 2016, as amended, modified, extended or restated from time to time. Under the Extension Amendment: (i)which the Company’s borrowing capacity ~~under the Revolving Credit Agreement~~ was increased from ~~$1.6~~$2.0 billion to ~~$2.0 billion; (ii) the Company’s option to increase its borrowing capacity under the Revolving Credit Agreement was “refreshed”~~$2.25 billion and ~~the amount of such option remained at $400 million;~~ the maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to lenders approval, be increased from ~~$2.0~~$2.25 billion to ~~$2.4 billion; (iii) the termination date of the~~$3.25 billion. The Revolving Credit Agreement ~~was extended from~~will terminate, and all amounts borrowed will be due and payable on November ~~18, 2021 until November 18, 2022; and (iv) the Company has the option~~15, 2026, but AutoZone may make up to ~~make one additional written request of the lenders~~two requests to extend the termination date ~~then in effect~~ for an additional period of one ~~year. Under~~year each. Revolving borrowings under the ~~revolving credit facility, the Company~~Revolving Credit Agreement may ~~borrow funds consisting of Eurodollar loans,~~be base rate loans, Eurodollar loans, or a combination of ~~both. Interest accrues on Eurodollar~~both, at AutoZone’s election. The Revolving Credit Agreement includes (i) a $75 million sublimit for swingline loans, at(ii) a ~~defined Eurodollar rate, defined as LIBOR plus the applicable percentage, as defined in the revolving~~

$50 million individual issuer letter of credit sublimit and (iii) a $250 million aggregate sublimit for all letters of credit.

~~credit facility, depending upon~~Under the Company’s ~~senior, unsecured,(non-credit~~ ~~enhanced) long-term~~Revolving Credit Agreement, covenants include restrictions on liens, a maximum debt ~~rating. Interest accrues on base rate loans as defined in~~to earnings ratio, a minimum fixed charge coverage ratio and a change of control provision that may require acceleration of the ~~credit facility.~~ repayment obligations under certain circumstances.

As of ~~February 10, 2018,~~May 7, 2022, the Company had ~~$3.3~~0 outstanding borrowings and $1.8 million of outstanding letters of credit under the Revolving Credit Agreement.

On ~~November~~January 18, ~~2016,~~2022, the Company ~~amended and restated its existing364-Day~~ ~~revolving credit facility (the “New364-Day~~ ~~Credit Agreement”) by decreasing~~repaid the ~~committed credit amount from~~ $500 million ~~to $400 million, extending~~3.700% Senior Notes due April 2022, which were callable at par in January 2022.

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As of May 7, 2022, the ~~expiration date by one year and renegotiating other terms and conditions. The credit facility was available to primarily support~~ commercial paper borrowings and ~~other short-term unsecured bank loans. Under~~ the ~~credit facility,~~$300 million 2.875% Senior Notes due January 2023 were classified as long-term in the accompanying Condensed Consolidated Balance Sheets, as the Company ~~could borrow funds consisting~~currently has the ability and intent to refinance them on a long-term basis through available capacity in its Revolving Credit Agreement. As of ~~Eurodollar loans, base~~May 7, 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.

All Senior Notes are subject to an interest rate ~~loans or a combination of both. Interest accrued on Eurodollar loans at a defined Eurodollar rate, defined as LIBOR plus~~adjustment if the ~~applicable margin, as~~debt ratings assigned are downgraded (as defined in the ~~revolving credit facility, depending upon~~agreements). Further, the ~~Company’s senior, unsecured,(non-credit~~ ~~enhanced) long-term debt rating. Interest accrued on base rate loans as~~Senior Notes contain a provision that repayment may be accelerated if the Company experiences a change in control (as defined in the ~~credit facility.~~agreements). The ~~New364-Day~~ ~~Credit Agreement expired~~Company’s borrowings under its Senior Notes contain minimal covenants, primarily restrictions on ~~November 17, 2017,~~liens, sale and leaseback transactions and consolidations, mergers and the ~~Company did not renew this revolving credit facility.~~sale of assets. All of the repayment obligations under its borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs.

The fair value of the Company’s debt was estimated at ~~$5.049~~$5.9 billion as of ~~February 10, 2018,~~May 7, 2022, and ~~$5.171~~$5.7 billion as of August ~~26, 2017,~~28, 2021, 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 $163.3 million at May 7, 2022, and greater than the carrying value of debt by ~~$5.4 million at February 10, 2018, and $90.3~~$413.1 million at August ~~26, 2017,~~28, 2021, which reflects their face amount, adjusted for any unamortized debt issuance costs and discounts.

All senior notes are subject to an interest rate adjustment if the debt ratings assigned to the senior notes are downgraded (as defined in the agreements). Further, the senior notes contain a provision that repayment of the senior notes may be accelerated if we experience a change in control (as defined in the agreements). Our borrowings under our senior notes contain minimal covenants, primarily restrictions on liens. Under our revolving credit facilities, 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. All of the repayment obligations under our borrowing arrangements may be accelerated and come due prior to the scheduled payment date if covenants are breached or an event of default occurs. As of ~~February 10, 2018, we were~~May 7, 2022, the Company was in compliance with all covenants and ~~expect~~expects to remain in compliance with all covenants under ~~our~~its borrowing arrangements.

Note IG – Stock Repurchase Program

From January 1, 1998 to ~~February 10, 2018,~~May 7, 2022, the Company has repurchased a total of ~~143.1~~152.0 million shares of its common stock at an aggregate cost of ~~$18.354~~$29.1 billion, including ~~824,733~~1.7 million shares of its common stock at an aggregate cost of ~~$527.5 million~~$3.4 billion during the ~~twenty-four~~thirty-six week period ended ~~February 10, 2018.~~ May 7, 2022.

On March ~~21, 2017,~~22, 2022, the Board voted to ~~increase~~authorize the ~~authorization by $750 million. This~~repurchase of an additional $2.0 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 ~~$18.65~~$31.2 billion. Considering the cumulative repurchases as of ~~February 10, 2018,~~May 7, 2022, the Company had ~~$296.2 million~~$2.1 billion remaining under the Board’s authorization to repurchase its common stock.

During the ~~twenty-four~~thirty-six week period ended ~~February 10, 2018,~~May 7, 2022, the Company retired ~~1.5~~2.5 million shares of treasury stock which had been previously ~~been~~ repurchased under the Company’s share repurchase program. The retirement increased Retained deficit by ~~$918.5 million~~$3.3 billion and decreased Additionalpaid-in capital by ~~$60.5~~$294.9 million. During the comparable prior year period, the Company retired ~~1.8~~1.0 million shares of treasury stock, which increased Retained deficit by ~~$1.321~~$1.1 billion and decreased Additionalpaid-in capital by ~~$64.9~~$60.0 million.

Subsequent to ~~February 10, 2018,~~May 7, 2022 and through June 3, 2022, the Company has repurchased ~~382,928~~103,726 shares of its common stock at an aggregate cost of ~~$264.9~~$203.6 million.

Note JH – Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss includes ~~certain adjustments to pension liabilities,~~ foreign currency translation adjustments, ~~certain~~ activity for interest rate swaps and treasury rate locks that ~~qualify~~qualified as cash flow hedges and unrealized gains (losses) onavailable-for-sale marketable debt securities.

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Changes in Accumulated other comprehensive loss for the twelve week periods ended ~~February 10, 2018~~May 7, 2022 and ~~February 11, 2017~~May 8, 2021 consisted of the following:


			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other⁽¹⁾		on Securities		Derivatives		Total

Balance at February 12, 2022	$	(289,889)	$	(711)	$	(19,563)	$	(310,163)
Other comprehensive income (loss) before reclassifications⁽²⁾⁽³⁾		8,531		(1,138)		0		7,393
Amounts reclassified from Accumulated other comprehensive loss⁽³⁾		—		—		579		579
Balance at May 7, 2022	$	(281,358)	$	(1,849)	$	(18,984)	$	(302,191)

(in thousands)
   Pension
    Liability     Foreign
  Currency⁽³⁾   Net
  Unrealized
Gain on
Securities    Derivatives          Total
Balance at November 18, 2017
   $   (71,060 ) $   (219,031 ) $           (327 ) $       (6,033 ) $      (296,451 )
Other comprehensive income (loss) before reclassifications⁽¹⁾
   – 7,507 (224 ) – 7,283
Amounts reclassified from Accumulated other comprehensive loss⁽¹⁾
   2,361 ⁽²⁾ – (34 )⁽⁴⁾ 457 ⁽⁵⁾ 2,784


Balance at February 10, 2018
   $ (68,699 ) $ (211,524 ) $ (585 ) $ (5,576 ) $ (286,384 )


(in thousands)
   Pension
Liability Foreign
Currency⁽³⁾ Net
Unrealized
Gain on
Securities Derivatives Total
Balance at November 19, 2016
   $ (87,074 ) $ (251,603 ) $ (109 ) $ (7,417 ) $ (346,203 )
Other comprehensive loss before reclassifications⁽¹⁾
   – (2,342 ) (13 ) – (2,355 )
Amounts reclassified from Accumulated other comprehensive loss⁽¹⁾
   1,953 ⁽²⁾ – (33 )⁽⁴⁾ 321 ⁽⁵⁾ 2,241


Balance at February 11, 2017
   $ (85,121 ) $ (253,945 ) $ (155 ) $ (7,096 ) $ (346,317 )


			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other⁽¹⁾		on Securities		Derivatives		Total

Balance at February 13, 2021	$	(279,725)	$	1,344	$	(22,458)	$	(300,839)
Other comprehensive (loss) before reclassifications⁽²⁾⁽³⁾		(3,865)		(346)		—		(4,211)
Amounts reclassified from Accumulated other comprehensive loss⁽³⁾		—		9		659		668
Balance at May 8, 2021	$	(283,590)	$	1,007	$	(21,799)	$	(304,382)

Changes in Accumulated other comprehensive loss for the thirty-six week periods ended May 7, 2022 and May 8, 2021 consisted of the following:


			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other⁽¹⁾		on Securities		Derivatives		Total

Balance at August 28, 2021	$	(287,638)	$	589	$	(20,937)	$	(307,986)
Other comprehensive income (loss) before reclassifications⁽²⁾⁽³⁾		6,280		(2,438)		0		3,842
Amounts reclassified from Accumulated other comprehensive loss⁽³⁾		—		—		1,953		1,953
Balance at May 7, 2022	$	(281,358)	$	(1,849)	$	(18,984)	$	(302,191)


			Net
	Foreign		Unrealized
	Currency and		Gain (Loss)
(in thousands)	Other⁽¹⁾		on Securities		Derivatives		Total

Balance at August 29, 2020	$	(332,321)	$	1,845	$	(23,776)	$	(354,252)
Other comprehensive income (loss) before reclassifications⁽²⁾⁽³⁾		48,731		(861)		—		47,870
Amounts reclassified from Accumulated other comprehensive loss ⁽³⁾		—		23		1,977		2,000
Balance at May 8, 2021	$	(283,590)	$	1,007	$	(21,799)	$	(304,382)

(1)

~~Amounts in parentheses indicate debits to Accumulated other comprehensive loss.~~

~~(2)~~

~~Represents amortization of pension liability adjustments,~~Foreign currency is shown net of ~~taxes~~U.S. tax to account for foreign currency impacts of $117 for the twelve weeks ended February 10, 2018 and $1,248 for the twelve weeks ended February 11, 2017, which is recorded in Operating, selling, general and administrative expenses on the Condensed Consolidated Statements of Income. See “Note G – Pension and Savings Plans” for further discussion.

~~(3)~~

~~Foreign~~certain undistributed non-U.S. subsidiaries’ earnings. Other foreign currency is not shown net of additional U.S. tax as ~~earnings~~other basis differences ofnon-U.S. subsidiaries are intended to be permanently reinvested.

~~(4)~~

Represents realized losses on marketable securities, net of taxes of $16 for the twelve weeks ended February 10, 2018 and $18 for the twelve weeks ended February 11, 2017, which is recorded in Operating, selling, general and administrative expenses on the Condensed Consolidated Statements of Income. See “Note D – Marketable Securities” for further discussion.

~~(5)~~

Represents gains and losses on derivatives, net of taxes of $52 for the twelve weeks ended February 10, 2018 and $188 for the twelve weeks ended February 11, 2017, which is recorded in Interest expense, net, on the Condensed Consolidated Statements of Income. See “Note E – Derivative Financial Instruments” for further discussion.

~~Changes in Accumulated other comprehensive loss for the twenty-four week periods ended February 10, 2018 and February 11, 2017, consisted of the following:~~

(in thousands)
   Pension
    Liability     Foreign
  Currency⁽³⁾   Net
  Unrealized
Gain on
Securities    Derivatives          Total
Balance at August 26, 2017
   $   (72,376 ) $   (175,814 ) $           (11 ) $       (6,356 ) $      (254,557 )
Other comprehensive income (loss) before reclassifications⁽¹⁾
   – (35,710 ) (538 ) – (36,248 )
Amounts reclassified from Accumulated other comprehensive loss⁽¹⁾
   3,677 ⁽²⁾ – (36 )⁽⁴⁾ 780 ⁽⁵⁾ 4,421


Balance at February 10, 2018
   $ (68,699 ) $ (211,524 ) $ (585 ) $ (5,576 ) $ (286,384 )


(in thousands)
   Pension
Liability Foreign
Currency⁽³⁾ Net
Unrealized
Gain on
Securities Derivatives Total
Balance at August 27, 2016
   $ (88,890 ) $ (211,012 ) $ 120 $ (7,747 ) $ (307,529 )
Other comprehensive (loss) before reclassifications⁽¹⁾
   – (42,933 ) (248 ) – (43,181 )
Amounts reclassified from Accumulated other comprehensive loss⁽¹⁾
   3,769 ⁽²⁾ – (27 )⁽⁴⁾ 651 ⁽⁵⁾ 4,393


Balance at February 11, 2017
   $ (85,121 ) $ (253,945 ) $ (155 ) $ (7,096 ) $ (346,317 )

~~(1)~~(2)

Amounts in parentheses indicate debits to Accumulated ~~other comprehensive loss.~~Other Comprehensive Loss.

~~(2)~~(3)

~~Represents amortization of pension liability adjustments,~~Amounts shown are net of taxes of $1,278 in fiscal 2018 and $2,634 in fiscal 2017, which is recorded in Operating, selling, general and administrative expenses on the Condensed Consolidated Statements of Income. See “Note G – Pension and Savings Plans” for further discussion.tax.

~~(3)~~

~~Foreign currency is not shown net of additional U.S. tax as earnings ofnon-U.S.~~ ~~subsidiaries are intended to be permanently reinvested.~~

~~(4)~~

Represents realized losses on marketable securities, net of taxes of $18 in fiscal 2018 and $15 in fiscal 2017, which is recorded in Operating, selling, general and administrative expenses on the Condensed Consolidated Statements of Income. See “Note D – Marketable Securities” for further discussion.

~~(5)~~

Represents gains and losses on derivatives, net of taxes of $237 in fiscal 2018 and $367 in fiscal 2017, which is recorded in Interest expense, net, on the Condensed Consolidated Statements of Income. See “Note E – Derivative Financial Instruments” for further discussion.

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Note KI – ~~Goodwill and Intangibles~~

~~The changes in the carrying amount of goodwill are as follows:~~

(in thousands)
       Auto Parts
Stores       Other             Total
Net balance as of August 26, 2017
   $ 326,703 $       65,184 $       391,887
Goodwill adjustments⁽¹⁾
   (24,058 ) (65,184 ) (89,242 )


Net balance as of February 10, 2018
   $       302,645 $ – $ 302,645

~~(1)~~

~~See “Note L – Asset Impairments” for further discussion.~~

~~The carrying amounts of intangible assets, other than goodwill, are included in Other long-term assets as follows:~~

(in thousands)
   Estimated
  Useful Life      Gross
  Carrying
Amount    Accumulated
  Amortization   Impairment⁽¹⁾
Net
    Carrying
Amount
  Amortizing intangible assets:

             Technology
   3-5 years    $ 10,570    $ (9,994 ) $ (576 ) $ –
             Noncompete agreements
   5 years    1,300    (1,223 ) (77 ) –
             Customer relationships
   3-10 years    49,676    (27,583 ) (10,057 ) 12,036




      $     61,546    $     (38,800 ) $     (10,710 )       12,036




  Non-amortizing intangible asset:

          Trade name
         $ (26,900 ) –


  Total intangible assets other than goodwill
         $ 12,036

~~(1)~~

~~See “Note L – Asset Impairments” for further discussion.~~

Amortization expense of intangible assets for the twelve and twenty-four week periods ended February 10, 2018 was $1.4 million and $2.8 million, respectively. Amortization expense of intangible assets for the twelve and twenty-four week periods ended February 11, 2017 was $1.9 million and $4.0 million, respectively.

~~Note L – Asset Impairments~~

During the second quarter, the Company recorded impairment charges related to its IMC and AutoAnything businesses totaling $193.2 million as the Company determined that the approximate fair value less costs to sell the businesses was significantly lower than the carrying value of the net assets based on recent offers received for these businesses as of the quarter ended February 10, 2018.

The impairment charge for the IMC business, which is reflected as a component of Auto Parts Locations in our segment reporting, includes $48.3 million related to inventory, $24.1 million related to goodwill, $18.0 million related to property and equipment, and $3.2 million related to other intangible assets. The impairment charge for AutoAnything, which is reflected as a component of the Other category in our segment reporting, includes $65.2 million related to goodwill and $34.4 million related to other intangible assets. The Company recorded these impairment charges within Operating, selling, general and administrative expenses in its condensed consolidated statements of income.

The carrying value for the assets and liabilities remaining after these impairment charges total $97.4 million and $59.0 million as of February 10, 2018 and are included in our condensed consolidated balance sheet at that date. The major classes of assets and liabilities included in those amounts consisted of accounts receivable of $22.2 million, merchandise inventories of $64.6 million and accounts payable of $47.7 million as of February 10, 2018.

~~Note M –~~ Litigation

In July 2014, the Company received a subpoena from the District Attorney of the County of Alameda, along with other environmental prosecutorial offices in the State of California, seeking documents and information related to the handling, storage and disposal of hazardous waste. The Company received notice that the District Attorney will seek injunctive and monetary relief. The Company is cooperating fully with the request and cannot predict the ultimate outcome of these efforts, although the Company has accrued all amounts it believes to be probable and reasonably estimable. The Company does not believe the ultimate resolution of this matter will have a material adverse effect on its consolidated financial position, results of operations or cash flows.

The Company is involved in various ~~other~~ 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. ~~The Company~~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 ~~its consolidated financial condition, results~~the Company’s Condensed Consolidated Statements of ~~operations~~Income, Condensed Consolidated Balance Sheets or ~~cash flows.~~Condensed Consolidated Statements of Cash Flows.

Note NJ – Segment Reporting

The Company’s ~~four~~ operating segments (Domestic Auto Parts, Mexico ~~Brazil~~ and ~~IMC)~~Brazil) are aggregated as ~~one~~1 reportable segment: Auto Parts ~~Locations.~~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 Company’s 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 Company’s reportable segment are the same as those described in ~~Note~~“Note A – Significant Accounting Policies” in its Annual Report on Form10-K for the year ended August ~~26, 2017.~~28, 2021.

The Auto Parts ~~Locations~~Stores segment is a retailer and distributor of automotive parts and accessories through the Company’s ~~6,088 locations~~6,846 stores in the ~~United States, Puerto Rico,~~U.S., Mexico and Brazil. Each ~~location~~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 andnon-automotive products.

The Other category reflects business activities of ~~three~~2 operating segments that are not separately reportable due to the materiality of these operating segments. The operating segments include ALLDATA, which produces, sells and maintains automotive diagnostic, repair and ~~repair information~~shop management software used in the automotive repair ~~industry;~~industry and E-commerce, which includes direct sales to customers through ~~www.autozone.com; and AutoAnything, which includes direct~~www.autozone.com for sales ~~to customers through www.autoanything.com.~~that are not fulfilled by local stores.

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 were as follows:


	Twelve Weeks Ended								Twenty-Four Weeks Ended

																	Twelve Weeks Ended				Thirty-Six Weeks Ended
																	May 7,		May 8,		May 7,		May 8,
(in thousands)	February 10, 2018				February 11, 2017				February 10, 2018				February 11, 2017				2022		2021		2022		2021


Net Sales
Auto Parts Locations		$	2,331,572			$	2,205,562			$	4,841,700			$	4,595,123
Auto Parts Stores																	$	3,795,290	$	3,590,281	$	10,707,019	$	9,551,576
Other			81,454				83,657				160,456				161,942			69,932		60,742		196,856		164,525

Total		$	2,413,026			$	2,289,219			$	5,002,156			$	4,757,065		$	3,865,222	$	3,651,023	$	10,903,875	$	9,716,101



Segment Profit
Auto Parts Locations		$	1,233,008			$	1,160,923			$	2,555,452			$	2,418,689
Auto Parts Stores																	$	1,966,089	$	1,877,240	$	5,600,778	$	5,042,124
Other			44,038				44,613				87,441				88,388			40,325		37,706		116,022		107,822

Gross profit			1,277,046				1,205,536				2,642,893				2,507,077			2,006,414		1,914,946		5,716,800		5,149,946
Operating, selling, general and administrative expenses⁽¹⁾			(1,071,948	)			(821,567	)			(1,969,041	)			(1,664,206	)
Operating, selling, general and administrative expenses																		(1,220,744)		(1,111,441)		(3,549,885)		(3,249,449)
Interest expense, net			(39,340	)			(34,198	)			(78,229	)			(67,504	)		(41,888)		(45,026)		(127,642)		(137,217)

Income before income taxes		$	165,758			$	349,771			$	595,623			$	775,367		$	743,782	$	758,479	$	2,039,273	$	1,763,280

~~(1)~~

~~Includes impairment charges of $193.2 million. See “Note L – Asset Impairments” for further discussion.~~

~~Note O – Income Taxes~~

~~Our effective income tax rate was (74.7%)~~

Table of pretax income for the twelve weeks ended February 10, 2018. The effective tax rate was lower than the U.S. statutory federal rate primarily due to a $111.9 million provisional tax benefit resulting from the enactment of the Tax Reform as described in further detail below; $32.1 million of excess tax benefits from option exercises; a $35.3 million benefit from the previously reported quarter one tax expense due to the reduction of the U.S. statutory rate from 35% to approximately 25.9%; and a second quarter tax benefit of $24.2 million due to the reduction of the U.S. statutory rate from 35% to approximately 25.9%.Contents

Our effective income tax rate was 4.2% of pretax income for the twenty-four weeks ended February 10, 2018. The effective tax rate was lower than the U.S. statutory federal rate primarily due to a $111.9 million provisional tax benefit resulting from the enactment of Tax Reform as described in further detail below; $34.3 million of excess tax benefits from option exercises; and a $59.5 million benefit from the reduction of the U.S. statutory rate from 35% to approximately 25.9%.

At the end of each interim period, the Company estimates its effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effects of changes in enacted tax laws or rates or tax status are recognized in the interim period in which the change occurs.

On December 22, 2017, Tax Reform was enacted by the U.S. government. Tax Reform contains several key provisions that affected the Company. The enacted provisions impacting the current financial statements include a mandatory~~one-time~~ transition tax on certain earnings of foreign subsidiaries and a permanent reduction of the U.S. corporate income tax rate from 35 to 21 percent, effective January 1, 2018. As the Company has an August 25^th ~~fiscalyear-end,~~ the impact of the lower rate will be phased in resulting in a U.S. statutory federal tax rate of approximately 25.9% for the fiscal year ending August 25, 2018 and a 21% U.S. statutory federal rate for fiscal years thereafter. Other enacted provisions which may impact the Company beginning in fiscal 2019 include: limitations on the deductibility of executive compensation, eliminating U.S. federal taxation of future remitted foreign earnings, and other new provisions requiring current inclusion of certain earnings of controlled foreign corporations. The Company maintained its permanent reinvestment assertion for~~non-U.S.~~ subsidiary earnings but will continue to evaluate and analyze potential impacts of any additional foreign and/or state income taxes on cash repatriation. The Company has not recorded deferred taxes attributable to its foreign operations at this time. Based on information currently available and subject to change, the Company currently forecasts its long-term effective tax rate to be approximately 24.5 percent.

The Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118 (SAB 118) to address the application of U.S. GAAP in situations where a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of Tax Reform. To the extent that a company’s accounting for certain income tax effects of Tax Reform is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of Tax Reform.

The ultimate impact may differ from provisional amounts recorded, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, and additional regulatory guidance that may be issued. The accounting is expected to be completed within one year from the enactment date of Tax Reform.

Based on the current analysis, the Company recorded a provisional income tax benefit of $111.9 million in its consolidated financial statements for the quarter ended February 10, 2018. The Company was able to determine a reasonable estimate for the mandatory~~one-time~~ ~~transition tax to increase tax expense by $24.8 million and for there-measurement~~ of the Company’s net U.S. federal deferred tax liability at the lower rate to reduce tax expense by $136.7 million. The Company’s analysis of these items is incomplete at this time. The Company will complete the accounting for these items during the measurement period, which will not exceed beyond one year from the enactment date.

As of February 10, 2018, the Company has estimated the following obligations with respect to the mandatory deemed repatriation of the Company’s foreign subsidiaries. The estimate may change, possibly materially, due to among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of Tax Reform.

(in thousands)
   Scheduled
Payments
2018
   $ 3,507
2019
   1,847
2020
   1,847
2021
   1,847
2022
   1,847
2023
   3,464
2024
   4,619
2025
   5,773



TotalOne-Time Transition Tax Forecasted Obligation Payments
   $         24,751

~~Note P – Subsequent Events~~

Subsequent to the balance sheet date, on February 22, 2018, the Company entered into an asset purchase agreement to sell substantially all of the assets, net of assumed liabilities related to its IMC operations for consideration that approximates the remaining net book value of the business. The transaction is expected to close in the third quarter of fiscal 2018. On February 26, 2018, the Company sold substantially all of the assets, net of assumed liabilities, related to its AutoAnything operations for consideration that approximates the remaining net book value of the business.

Report of Independent Registered Public Accounting Firm

~~The~~

To the Stockholders and Board of Directors ~~and Stockholders~~of

AutoZone, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of AutoZone, Inc. (the Company) as of ~~February 10, 2018,~~May 7, 2022, the related condensed consolidated statements of income, comprehensive income and stockholders’ deficit for the twelve and ~~twenty-four~~thirty-six week periods ended ~~February 10, 2018~~May 7, 2022 and ~~February 11, 2017, the condensed consolidated statements of comprehensive income for the twelve and twenty-four week periods ended February 10, 2018 and February 11, 2017, and~~May 8, 2021, the condensed consolidated statements of cash flows for the ~~twenty-four~~thirty-six week periods ended ~~February 10, 2018~~May 7, 2022 and ~~February 11, 2017. These~~May 8, 2021, 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 ~~are the responsibility of the Company’s management.~~for them to be in conformity with U.S. generally accepted accounting principles.

We ~~conducted our review~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of August 28, 2021, the related consolidated statements of income, comprehensive income, stockholders’ deficit and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated October 25, 2021, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 28, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial ~~information~~statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board,~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of AutoZone, Inc. as of August 26, 2017, and the related consolidated statements of income, comprehensive income, stockholders’ deficit, and cash flows for the year then ended, not presented herein, and, in our report dated October 25, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 26, 2017, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

~~/s/~~/s/ Ernst & Young LLP

Memphis, Tennessee

~~March 16, 2018~~

June 10, 2022

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~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we provide a historical and prospective narrative of our general financial condition, results of operations, liquidity and certain other factors that may affect ~~our~~the future ~~results.~~results of AutoZone, Inc. (“AutoZone” or the “Company”). The ~~review of Management’s Discussion and Analysis~~following MD&A discussion should be ~~made~~read in conjunction with our ~~condensed consolidated financial statements,~~Condensed Consolidated Financial Statements, related notes to those statements and other financial information, including forward-looking statements and ~~other~~ risk factors, ~~included~~that appear elsewhere in this ~~quarterly report.~~Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended August 28, 2021 and other filings we make with the SEC.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form10-Q constitute forward-looking statements that are ~~forward-looking statements.~~subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” ~~“strategy”~~“strategy,” “seek,” “may,” “could,” and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product ~~demand;~~demand, due to changes in fuel prices, miles driven or otherwise; energy prices; weather; competition; credit market conditions; cash flows; access to available and feasible financing; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; risks associated with self -insurance; war and the prospect of war, including terrorist activity; the impact of public health issues, such as the ongoing global coronavirus (“COVID-19”) pandemic; inflation; the ability to hire, train and retain qualified employees; construction delays; the compromising of confidentiality, availability or integrity of information, including ~~cyber attacks;~~due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges in international markets; failure or interruption of our information technology systems; origin and raw material costs of ~~suppliers.~~suppliers; inventory availability; disruption in our supply chain; impact of tariffs; anticipated impact of new accounting standards; and business interruptions. Certain of these risks and uncertainties are discussed in more detail in the “Risk Factors” section contained in Item 1A under Part 1 of our Annual Report on Form10-K for the year ended August ~~26, 2017,~~28, 2021, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance, ~~and~~ actual results, developments and business decisions may differ from those contemplated by such forward-looking statements, and events described above and in the “Risk Factors” could materially and adversely affect our business. However, it should be understood that it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. ~~Actual results may materially differ from anticipated results.~~

Overview

We are the ~~nation’s~~ leading retailer and ~~a leading~~ distributor of automotive replacement parts and accessories in the ~~United States.~~Americas. We began operations in 1979 and at ~~February 10, 2018,~~May 7, 2022, operated ~~5,514 AutoZone~~6,115 stores in the ~~United States, including Puerto Rico; 532~~U.S., 673 stores in ~~Mexico; 16~~Mexico and 58 stores in ~~Brazil; and 26 IMC branches.~~Brazil. Each ~~AutoZone~~ 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 andnon-automotive products. At ~~February 10, 2018,~~May 7, 2022, in ~~4,645~~5,276 of our domestic ~~AutoZone~~ stores, we also had a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. We also have commercial programs in ~~AutoZone~~all stores in Mexico and Brazil. We sell the ALLDATA brand automotive diagnostic, repair and ~~repair~~shop management software through ~~www.alldata.com and www.alldatadiy.com.~~www.alldata.com. Additionally, we sell automotive hard parts, maintenance items, accessories andnon-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com. We also provide product information on our Duralast branded products through www.duralastparts.com. We do not derive revenue from automotive repair or installation services.

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Operating results for the twelve and ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending August ~~25, 2018.~~27, 2022. Each of the first three quarters of our fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarters ~~for~~of fiscal ~~2017~~2022 and ~~2018~~2021 each have 16 weeks. Our 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 months of December and January.

COVID-19 Impact

The COVID-19 pandemic continues to impact the global economy and numerous aspects of our business including our customers, employees and suppliers. Our highest priority remains the safety and well-being of our customers and employees. Since the beginning of the COVID-19 pandemic, we have experienced strong same store sales, and our sales have remained at all-time high volumes.

The long-term impact of COVID-19 to our business remains unknown, may magnify risks associated with our business and operations and may continue to cause fluctuations in demand and availability for our products, our store hours and our workforce availability.

Please refer to the “Risk Factors” section of our Annual report on Form 10-K for the year ended August 28, 2021 for additional information.

Executive Summary

Net sales ~~were up 5.4%~~increased 5.9% for the quarter ended May 7, 2022 compared to the prior year period, which was driven by ~~sales of $43.1 million from new domestic AutoZone stores and~~ an increase in domestic same store sales (sales from stores open at least one year) of ~~2.2%~~2.6%. ~~Earnings~~Domestic commercial sales increased 26.0%, which represents approximately 30% of our domestic auto parts sales. Operating profit decreased 2.2% to $785.7 million compared to $803.5 million. Net income for the quarter decreased 0.6% to $592.6 million compared to $596.2 million. Diluted earnings per share increased ~~28.5% for the quarter and were significantly impacted by the Tax Reform and asset impairments recorded during the quarter.~~9.6% to $29.03 per share from $26.48 per share.

Our business is impacted by various factors within the economy that affect both our ~~consumer~~consumers and our industry, including but not limited to inflation, fuel costs, ~~unemployment~~wage rates, ~~foreign exchange and interest rates,~~supply chain disruptions, hiring and other economic ~~conditions.~~conditions, including the effects of, and responses to, the ongoing COVID-19 pandemic. Given the nature of these macroeconomic factors, we cannot predict whether or for how long certain trends will continue, nor can we predict to what degree these trends will impact us in the future.

During the ~~second~~third quarter of fiscal ~~2018,~~2022, failure and maintenance related categories represented the largest portion of our sales mix, at approximately ~~85%~~84% of total sales, which ~~was~~is consistent towith the comparable prior year period, with failure related categories continuing to be the largest portion of our ~~largest set of categories.~~ sales mix. We did not experience any fundamental shifts in our category sales mix as compared to the previous year. Our sales mix can be impacted by severe or unusual weather over a ~~short term~~short-term period. Over the ~~long term,~~long-term, we believe the impact of the weather on our sales mix is not significant.

~~Our primary response to fluctuations in the demand for the products we sell is to adjust our advertising message, store staffing and product assortment. In recent years, we initiated a variety~~

Table of strategic tests focused on increasing inventory availability in our domestic stores. As part of those tests, we closely studied our hub distribution model, store inventory levels and product assortment, which led to strategic tests onContents

increased frequency of delivery to our domestic stores and significantly expanding parts assortment in select domestic stores we call mega hubs. During fiscal 2016 and most of fiscal 2017, we continued the implementation of more frequent deliveries from our distribution centers to improve the~~in-stock~~ levels for SKUs stocked in our stores. In the latter part of fiscal 2017, we made substantial changes to test different scenarios to determine the optimal approach around increased delivery frequency. We completed our testing and determined that at certain volumes more frequent deliveries make economic sense. We will be implementing the new frequencies over the next several months. Once completed, approximately 25% of our stores representing 40% of our sales volume, and nearly 50% of our commercial sales, will receive distribution center deliveries three or more times per week.

The two statistics we believe have the ~~most positive~~closest correlation to our market growth over the long-term are miles driven and the number of seven year old or older vehicles on the road. While over the long-term we have seen a ~~positive~~close correlation between our net sales and the number of miles driven, we have also seen time frames of minimal correlation in sales performance and miles driven. During the periods of minimal correlation between net sales and miles driven, we believe net sales have been positively impacted by other factors, including macroeconomic factors and the number of seven year old or older vehicles on the road. The average age of the U.S. light vehicle fleet continues to trend in our industry’s ~~favor.~~favor as the average age has exceeded 11 years since 2012, according to the latest data provided by the Auto Care Association. As of January 1, 2022, the average age of light vehicles on the road was 12.2 years, up from 12.1 years in 2021. Since the beginning of ~~2017~~the fiscal year and through ~~December 2017~~March 2022 (latest publicly available information), miles driven in the U.S. increased ~~by 1.2%.~~7.9% compared to the same period in the prior year. We believe the increase in miles driven is due to the nation beginning to return to pre-pandemic levels, but we are unable to predict if the increase will continue, due to rising fuel prices, general macroeconomic conditions or otherwise, or the extent of the impact it will have on our business.

Twelve Weeks Ended ~~February 10, 2018~~May 7, 2022

Compared with Twelve Weeks Ended ~~February 11, 2017~~May 8, 2021

Net sales for the twelve weeks ended ~~February 10, 2018~~May 7, 2022 increased ~~$123.8~~$214.2 million to ~~$2.413~~$3.9 billion, or ~~5.4%,~~5.9% over net sales of ~~$2.289~~$3.7 billion for the comparable prior year period. Total auto parts sales increased by 5.7%, primarily driven by ~~net sales of $43.1 million from new domestic AutoZone stores and~~ an increase in domestic same store sales of ~~2.2%.~~2.6% and net sales of $69.6 million from new stores. Domestic commercial sales increased ~~$24.8~~$215.7 million to $1.0 billion, or ~~5.7%~~26.0%, over the comparable prior year period.

Gross profit for the twelve weeks ended ~~February 10, 2018~~May 7, 2022 was ~~$1.277~~$2.0 billion, compared with $1.9 billion during the comparable prior year period. Gross profit, as a percentage of sales, was 51.9% compared to 52.4% during the comparable prior year period. The decrease in gross margin was primarily driven by accelerated growth in our lower margin commercial business.

Operating, selling, general and administrative expenses for the twelve weeks ended May 7, 2022 were $1.2 billion, or ~~52.9%~~31.6% of net sales, compared with ~~$1.206~~$1.1 billion, or ~~52.7%~~30.4% of net sales during the comparable prior year period. The increase in ~~gross margin was attributable to lower distribution costs (17 basis points) and higher merchandise margins.~~

~~Operating, selling, general and administrative~~operating expenses, for the twelve weeks ended February 10, 2018 were $1.072 billion, or 44.4% of net sales and included impairment charges of approximately $193.2 million, or 8.0% of sales, compared with $821.6 million, or 35.9% of net sales, during the comparable prior year period. Operating expenses before impairment charges, as a percentage of sales, ~~were higher than~~was driven by payroll deleverage as last ~~year primarily due to incentive compensation(-16~~ ~~basis points), higher advertising costs(-12~~ ~~basis points) and deleverage on occupancy costs(-10~~ ~~basis points).~~year’s historic comparable store sales drove significant leverage.

Net interest expense for the twelve weeks ended ~~February 10, 2018~~May 7, 2022 was ~~$39.3~~$41.9 million compared with ~~$34.2~~$45.0 million during ~~the comparable prior year period. The increase was primarily due to higher weighted average borrowing rates over~~ the comparable prior year period. Average borrowings for the twelve weeks ended ~~February 10, 2018~~May 7, 2022 were ~~$5.033~~$6.0 billion, compared with ~~$5.133~~$5.4 billion for the comparable prior year period. Weighted average borrowing rates were ~~3.1%~~2.74% and 3.29% for the quarter ended May 7, 2022 and May 8, 2021, respectively.

Our effective income tax rate was 20.3% of pretax income for the twelve weeks ended ~~February 10, 2018~~May 7, 2022, and ~~2.6%~~21.4% for the comparable prior year period. The decrease in the tax rate was primarily attributable to an increased benefit from stock options exercised during the twelve weeks ended May 7, 2022. The benefit of stock options exercised for the twelve weeks ended ~~February 11, 2017.~~May 7, 2022 was $21.1 million compared to $16.0 million in the comparable prior year period.

Net income for the twelve week period ended ~~February 10, 2018 increased~~May 7, 2022 decreased by ~~$52.4~~$3.6 million to ~~$289.5~~$592.6 million due to the factors set forth above, and diluted earnings per share increased by ~~28.5%~~9.6% to ~~$10.38~~$29.03 from $8.08 in the comparable prior year period. Adjusted for impairment charges, Tax Reform, excess tax benefits from option exercises and operating results from IMC and AutoAnything, adjusted net income for the twelve week period ended February 10, 2018 increased by $8.8 million to $236.3 million, while adjusted diluted earnings per share increased by 9.3% to $8.47 from $7.75 in the comparable prior year period.$26.48. The impact on current quarter diluted earnings per share from stock repurchases since the end of the comparable prior year period was an increase of ~~$0.40.~~$2.51.

~~Twenty-Four~~

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Thirty-Six Weeks Ended ~~February 10, 2018~~May 7, 2022

Compared with ~~Twenty-Four~~Thirty-Six Weeks Ended ~~February 11, 2017~~May 8, 2021

Net sales for the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 increased ~~$245.1 million~~$1.2 billion to ~~$5.002~~$10.9 billion, or ~~5.2%,~~12.2% over net sales of ~~$4.757~~$9.7 billion for the comparable prior year period. Total auto parts sales increased by ~~5.4%~~12.1%, primarily driven by ~~net sales of $87.5 million from new domestic AutoZone stores and~~ an increase in domestic same store sales of ~~2.3%.~~9.5% and net sales of $200.3 million from new stores. Domestic commercial sales increased ~~$55.4~~$625.3 million to $2.8 billion, or ~~6.2%~~28.9%, over the comparable prior year period.

Gross profit for the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 was ~~$2.643~~$5.7 billion, compared with $5.1 billion during the comparable prior year period. Gross profit, as a percentage of sales was 52.4% compared to 53.0% during the comparable prior year period. The decrease in gross margin was primarily driven by initiatives to accelerate commercial business growth.

Operating, selling, general and administrative expenses for the thirty-six weeks ended May 7, 2022 were $3.5 billion, or ~~52.8%~~32.6% of net sales, compared with ~~$2.507~~$3.2 billion, or ~~52.7%~~33.4% of net sales during the comparable prior year period. The ~~increase~~decrease in ~~gross margin was attributable to lower distribution costs (13 basis points) and higher merchandise margins.~~

~~Operating, selling, general and administrative~~operating expenses, for the twenty-four weeks ended February 10, 2018 were $1.969 billion, or 39.4% of net sales, and included impairment charges of approximately $193.2 million, or 3.9% of sales, compared with $1.664 billion, or 35.0% of net sales, during the comparable prior year period. Operating expenses before impairment charges, as a percentage of sales, ~~were higher than last~~was driven by strong sales growth and approximately $46 million in prior year ~~primarily due to hurricane-related~~pandemic related expenses, ~~incurred during the first quarter(-17~~ ~~basis points), higher incentive compensation(-17~~ ~~basis points), deleverage on occupancy(-15~~ ~~basis points) and higher advertising costs(-5~~ ~~basis points).~~including Emergency Time-Off benefit enhancements for our AutoZoners.

Net interest expense for the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 was ~~$78.2~~$127.6 million compared with ~~$67.5~~$137.2 million during the comparable prior year period. ~~The increase was primarily due to higher weighted average borrowing rates over the comparable year period.~~ Average borrowings for the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 were ~~$4.990~~$5.6 billion, compared with ~~$5.034~~$5.5 billion for the comparable prior year period. Weighted average borrowing rates were ~~3.1%~~3.03% and 3.28% for the ~~twenty-four~~thirty-six week periods ended May 7, 2022 and May 8, 2021, respectively.

Our effective income tax rate was 20.6% of pretax income for the thirty-six weeks ended ~~February 10, 2018~~May 7, 2022, and ~~2.6%~~21.5% for the ~~twenty-four~~comparable prior year period. The decrease in the tax rate was primarily attributable to an increased benefit from stock options exercised during the thirty-six weeks ended ~~February 11, 2017.~~May 7, 2022. The benefit of stock options exercised for the thirty-six week period ended May 7, 2022 was $55.9 million compared to $35.2 million in the comparable prior year period.

Net income for the ~~twenty-four weeks~~thirty-six week period ended ~~February 10, 2018~~May 7, 2022 increased by ~~$55.3~~$235.0 million to ~~$570.5 million~~$1.6 billion due to the factors set forth above, and diluted earnings per share increased by ~~16.8%~~28.6% to ~~$20.38~~$76.90 from $17.45 in the comparable prior year period. Adjusted for impairment charges, Tax Reform, excess tax benefits from option exercises and operating results from IMC and AutoAnything, adjusted net income for the twenty-four weeks period ended February 10, 2018 increased by $11.4 million to $517.2 million, while adjusted diluted earnings per share increased by 7.8% to $18.47 from $17.13 in the comparable prior year period.$59.80. The impact on current year to date diluted earnings per share from stock repurchases since the end of the comparable prior year period was an increase of ~~$0.91.~~

~~Income Taxes~~

On December 22, 2017, the U.S. government enacted the Tax Reform legislation. The Tax Reform contains several key provisions that affected the Company. The enacted provisions impacting the current financial statements include a mandatory~~one-time~~ transition tax on certain earnings of foreign subsidiaries and a permanent reduction of the U.S. corporate income tax rate from 35 to 21 percent, effective January 1, 2018. As the Company has an August 25^th ~~fiscalyear-end,~~ the impact of the lower rate will be phased in resulting in a U.S. statutory federal tax rate of approximately 25.9% for the fiscal year ending August 25, 2018 and a 21% U.S. statutory federal rate for fiscal years thereafter. Other enacted provisions which may impact the Company beginning in fiscal 2019 include limitations on the deductibility of executive compensation, eliminating U.S. federal taxation of future remitted foreign earnings, and other new provisions requiring current inclusion of certain earnings of controlled foreign corporations. The Company maintained its permanent reinvestment assertion for~~non-U.S.~~ subsidiary earnings but will continue to evaluate and analyze potential impacts of any additional foreign and/or state income taxes on cash repatriation. We have not recorded deferred taxes attributable to its foreign operations at this time. Based on information currently available and subject to change, we currently forecasts its long-term effective tax rate to be approximately 24.5 percent.

Based on our current analysis, we recorded a provisional income tax benefit of $111.9 million in its consolidated financial statements for the quarter ended February 10, 2018. We were able to determine a reasonable estimate for the mandatory~~one-time~~ ~~transition tax to increase tax expense by $24.8 million and for there-measurement~~ of our net U.S. federal deferred tax liability at the lower rate to reduce tax expense by $136.7 million. Our analysis of these items is incomplete at this time. We will complete the accounting for these items during the measurement period, which will not extend beyond one year from the enactment date.

Our effective income tax rate was (74.7%) of pretax income for the twelve weeks ended February 10, 2018 and 32.2% for the comparable prior year period. The lower tax rate resulted from the $111.9 million provisional amount discussed above, $32.1 million of excess tax benefits from option exercises, $35.3 million benefit from the previously reported 2018 first quarter tax expense due to the reduction of the U.S. statutory rate from 35% to approximately 25.9% and a 2018 second quarter tax benefit of $24.2 million due to the reduction of the U.S. statutory rate from 35% to approximately 25.9%.

Our effective income tax rate was 4.2% of pretax income for the twenty-four weeks ended February 10, 2018 and 33.5% for the comparable prior year period. The lower tax rate resulted from the $111.9 million provisional amount discussed above, $34.3 million of excess tax benefits from option exercises and a $59.5 million benefit from the reduction of the U.S. statutory rate from 35% to approximately 25.9%.$4.58.

Liquidity and Capital Resources

The primary source of our liquidity is our cash flows realized through the sale of automotive parts, products and accessories. Our cash flow results benefitted from the quarter’s strong sales and continued progress on our initiatives. We believe that our cash generated from operating activities and available credit, supplemented with our long-term borrowings will provide ample liquidity to fund our operations while allowing us to make strategic investments to support long-term growth initiatives and return excess cash to shareholders in the form of share repurchases. As of May 7, 2022, we held $263.0 million of cash and cash equivalents, as well as $2.2 billion in undrawn capacity on our Revolving Credit Agreement, before giving effect to commercial paper borrowings. We believe our sources of liquidity will continue to be adequate to fund our operations and investments to grow our business, repay our debt as it becomes due and fund our share repurchases over the short-term and long-term. In addition, we believe we have the ability to obtain alternative sources of financing, if necessary. However, decreased demand for our products or changes in customer buying patterns would negatively impact our ability to generate cash from operating activities. Decreased demand or changes in buying patterns could also impact our ability to meet our debt covenants of our credit agreements and, therefore, negatively impact the funds available under our Revolving Credit Agreement. In the event our liquidity is insufficient, we may be required to limit our spending.

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For the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018,~~May 7, 2022, our net cash flows from operating activities provided ~~$752.3 million, as~~$2.0 billion compared with ~~$563.9 million provided~~$2.2 billion during the comparable prior year period. The ~~increase~~decrease is primarily driven by higher inventory growth, net of accounts payable in the current year, and a decrease in accrued benefits and withholdings in the current period, as compared to the same period in the prior year due to ~~increased earnings~~the ability to defer certain payroll tax payments in the prior year under the Coronavirus Aid, Relief, and ~~favorable changes~~Economic Security Act. The decrease was partially offset by growth in ~~taxes payable.~~net income due to accelerated sales growth.

Our net cash flows used in investing activities for the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018 was $230.6~~May 7, 2022 were $360.7 million as compared with ~~$202.7~~$358.7 million in the comparable prior year period. Capital expenditures for the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 were ~~$214.7~~$369.4 million compared to ~~$216.1~~$375.7 million ~~for~~in the comparable prior year period. ~~During the twenty-four week period ended February 10, 2018, we opened 59 net new locations. In the comparable prior year period, we opened 58 net new locations.~~ Investing cash flows were impacted by our wholly owned captive, which purchased ~~$80.8~~$46.5 million and sold ~~$63.1~~$37.9 million in marketable debt securities during the ~~twenty-four~~thirty-six weeks ended

~~February 10, 2018.~~ May 7, 2022. During the comparable prior year period, the captive purchased ~~$27.8~~$52.6 million in marketable debt securities and sold ~~$40.5 million in marketable securities.~~$72.3 million.

Our net cash flows used in financing activities for the ~~twenty-four~~thirty-six weeks ended ~~February 10, 2018~~May 7, 2022 were ~~$524.3 million~~$2.5 billion compared to $336.6 million in the comparable prior year period. During the twenty-four week period ended February 10, 2018, we repaid no debt. During the comparable prior year period, we repaid our $400 million 1.35% Senior Notes due in January 2017 using commercial paper borrowings. For the twenty-four week period ended February 10, 2018, our commercial paper activity resulted in $39.6 million in net repayments of commercial paper, as compared to $625.6 million in net proceeds$2.7 billion in the comparable prior year period. Stock repurchases were ~~$527.5 million~~$3.4 billion in the current ~~twenty-four~~thirty-six week period as compared with ~~$560.6~~$2.5 billion in the prior year period. The treasury stock repurchases were primarily funded by cash flows from operations. During the thirty-six weeks ended May 7, 2022, we repaid our $500 million 3.700% Senior Notes due April 2022, which were callable at par in January 2022. In the comparable prior year ~~period.~~period, we repaid the $250 million 2.500% Senior Notes due April 2021, which were callable at par in March 2021. For the ~~twenty-four weeks~~thirty-six week period ended ~~February 10, 2018,~~May 7, 2022, our commercial paper activity resulted in $1.3 billion in net proceeds from commercial paper compared to no commercial paper borrowings in the prior year period. Proceeds from the sale of common stock and exercises of stock options for the thirty-six weeks ended May 7, 2022 and May 8, 2021 provided ~~$65.2 million. In the comparable prior year period, proceeds from the sale of common stock~~$98.1 million and ~~exercises of stock options provided $23.3 million.~~$121.9 million, respectively.

During fiscal ~~2018,~~2022, we expect to ~~invest~~increase the investment in our business ~~at a rate consistent with~~as compared to fiscal ~~2017.~~2021. Our investments ~~continue~~are expected to be directed primarily to ~~new locations,~~expansion of our store base and supply chain ~~infrastructure, enhancements~~ to fuel the growth of our domestic and international businesses, which includes new stores, including hubs and mega hubs, as well as new distribution centers and expansions of existing ~~locations and investments in technology.~~distribution centers. The amount of ~~our~~ investments in our new ~~locations~~stores is impacted by different factors, including ~~such factors as~~ whether the building and land are purchased (requiring higher investment) or leased (generally lower initial investment), and whether such buildings are located in the ~~United States,~~U.S., Mexico or Brazil, or located in urban or rural areas.

In addition to the building and land costs, our new ~~locations~~stores require working capital, predominantly for inventories. Historically, we have negotiated extended payment terms from suppliers, reducing the working capital required and resulting in a high accounts payable to inventory ratio. We plan to continue leveraging our inventory purchases; however, our ability to do so may be limited by our vendors’ capacity to factor their receivables from us. Certain vendors participate in ~~financing~~ arrangements with financial institutions whereby they factor their AutoZone receivables, ~~from us,~~ allowing them to receive early payment from the financial institution on our invoices at a discounted rate. ~~In recent years,~~The terms of these agreements are between the vendor and the financial institution. Upon request from the vendor, we ~~initiated a variety~~confirm to the vendor’s financial institution the balances owed to the vendor, the due date and agree to waive any right of ~~strategic tests focused on increasing inventory availability,~~offset to the confirmed balances. A downgrade in our credit or changes in the financial markets may limit the financial institutions’ willingness to participate in these arrangements, which ~~increased our inventory per location. Many of our vendors have supported our initiative~~may result in the vendor wanting to ~~update our product assortments by providing extended~~renegotiate payment terms. ~~These extended~~A reduction in payment terms would increase the working capital required to fund future inventory investments. Extended payment terms from our vendors have allowed us to continue our high accounts payable to inventory ratio. Accounts payable, as a percentage of gross inventory, was ~~106.9%~~127.9% at ~~February 10, 2018,~~May 7, 2022, compared to ~~105.5%~~123.9% at ~~February 11, 2017.~~May 8, 2021. The ~~slight~~ increase ~~in this ratio is~~from the comparable prior year period was primarily due to ~~inventory impairment charges related to IMC and increases in accounts payable due to~~increased purchases with favorable vendor ~~payment terms.~~terms and higher inventory turns.

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Depending on the timing and magnitude of our future investments (either in the form of leased or purchased properties or acquisitions), we anticipate that we will rely primarily on internally generated funds and available borrowing capacity to support a majority of our capital expenditures, working capital requirements and stock repurchases. The balance may be funded through new borrowings. We anticipate that we will be able to obtain such financing ~~in view of~~based on our current credit ratings and favorable experiences in the debt markets in the past.

Tax Reform was enacted on December 22, 2017. As part of the transition to the new territorial tax system, Tax Reform imposes a tax on the mandatory deemed repatriation of earnings of the Company’s foreign subsidiaries. It is estimated that the deemed repatriation tax will be approximately $24.8 million, which has been recorded to income tax expense. The estimate may change, possibly materially, due to among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of Tax Reform.

For the trailing four quarters ended ~~February 10, 2018,~~May 7, 2022, our adjusted after-tax return on invested capital (“ROIC”), which is a non-GAAP measure, was ~~30.2%~~51.4% as compared to ~~31.0%~~40.2% for the comparable prior year period. Adjusted ROIC is calculated as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize operating leases). We use adjusted ROIC to evaluate whether we are effectively using our capital resources and believe it is an important indicator of our overall operating performance. Refer to the “Reconciliation ofNon-GAAP Financial Measures” section for further details of our calculation.

Debt Facilities

~~We entered into a Master Extension, New Commitment~~On November 15, 2021, we amended and ~~Amendment Agreement dated as of November 18, 2017~~restated our existing revolving credit facility (the ~~“Extension Amendment”~~“Revolving Credit Agreement”) pursuant to ~~the Third Amended and Restated Credit Agreement dated as of November 18, 2016, as amended, modified, extended or restated from time to time. Under the Extension Amendment: (i)~~which our borrowing capacity under the Revolving Credit Agreement was increased from ~~$1.6~~$2.0 billion to ~~$2.0 billion; (ii) our option to increase the borrowing capacity under the Revolving Credit Agreement was “refreshed”~~$2.25 billion and ~~the amount of such option remained at $400 million;~~ the maximum borrowing under the Revolving Credit Agreement may, at our option, subject to lenders approval, be increased from ~~$2.0~~$2.25 billion to ~~$2.4 billion; (iii) the termination date of the~~$3.25 billion. The Revolving Credit Agreement ~~was extended from~~will terminate, and all amounts borrowed will be due and payable, on November ~~18, 2021 until November 18, 2022; and (iv)~~15, 2026, but we ~~have the option~~may make up to ~~make one additional written request of the lenders~~two requests to extend the termination date ~~then in effect~~ for an additional period of one ~~year. Under~~year each. Revolving borrowings under the ~~revolving credit facility, we~~Revolving Credit Agreement may ~~borrow funds consisting of Eurodollar loans,~~be base rate loans, Eurodollar loans, or a combination of ~~both. Interest accrues on Eurodollar loans~~both, at ~~a defined Eurodollar rate, defined as LIBOR plus the applicable percentage, as defined in the revolving credit facility, depending upon~~ our ~~senior, unsecured,(non-credit~~ ~~enhanced) long-term debt rating. Interest accrues on base rate loans as defined in the credit facility. As of February 10, 2018, we had $3.3 million of outstanding letters of credit under the~~election. The Revolving Credit ~~Agreement.~~

~~On November 18, 2016, we amended and restated our existing364-Day~~ ~~revolving credit facility (the “New364-Day~~ ~~Credit Agreement”) by decreasing the committed credit amount from $500~~Agreement includes (i) a $75 million ~~to $400~~sublimit for swingline loans, (ii) a $50 million extending the expiration date by one year and renegotiating other terms and conditions. The credit facility was available to primarily support commercial paper borrowings and other short-term unsecured bank loans. Under the credit facility, we could borrow funds consisting of Eurodollar loans, base rate loans or a combination of both.

~~Interest accrued on Eurodollar loans at a defined Eurodollar rate, defined as LIBOR plus the applicable margin, as defined in the revolving credit facility, depending upon our senior, unsecured,(non-credit~~ ~~enhanced) long-term debt rating. Interest accrued on base rate loans as defined in the credit facility. The New364-Day~~ ~~Credit Agreement expired on November 17, 2017, and we did not renew this revolving credit facility.~~

~~We also maintain a~~individual issuer letter of credit ~~facility that allows us to request the participating bank to issue~~sublimit and (iii) a $250 million aggregate sublimit for all letters of ~~credit on~~credit.

Under our ~~behalf up to an aggregate amount of $75 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 February 10, 2018, we had $75.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2019.~~

In addition to the outstanding letters of credit issued under the committed facilities discussed above, we had $30.1 million in letters of credit outstanding as of February 10, 2018. These letters of credit have various maturity dates and were issued on an uncommitted basis.

As of May 7, 2022, we had no outstanding borrowings and $1.8 million of outstanding letters of credit under our Revolving Credit Agreement.

We also maintain a letter of credit facility that allows us to request the participating bank to issue letters of credit on our 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 May 7, 2022, we had $25.0 million in letters of credit outstanding under the letter of credit facility, which expires in June 2022. On May 16, 2022, we amended and restated the letter of credit facility to, among other things, extend the facility through June 2025.

In addition to the outstanding letters of credit issued under the committed facilities discussed above, we had $105.1 million in letters of credit outstanding as of May 7, 2022. These letters of credit have various maturity dates and were issued on an uncommitted basis.

On January 18, 2022, we repaid the $500 million 3.700% Senior Notes due April 2022, which were callable at par in January 2022.

As of May 7, 2022, our $1.3 billion of commercial paper borrowings and the $300 million 2.875% Senior Notes due January 2023 were classified as long-term in the Consolidated Balance Sheets, as we have the current ability and intent to refinance them on a long-term basis through available capacity in our Revolving Credit Agreement. As of May 7, 2022, we had $2.2 billion of availability under our Revolving Credit Agreement, without giving effect to commercial paper borrowings, which would allow us to replace these short-term obligations with a long-term financing facility.

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All Senior Notes are subject to an interest rate adjustment if the debt ratings assigned are downgraded (as defined in the agreements). Further, the Senior Notes contain a provision that repayment may be accelerated if we experience a change in control (as defined in the agreements). Our borrowings under our Senior Notes contain minimal covenants, primarily restrictions on liens, sale and leaseback transactions and consolidations, mergers and the sale of assets. All of the repayment obligations under our borrowing arrangements may be accelerated and come due prior to the applicable scheduled payment date if covenants are breached or an event of default occurs. As of ~~February 10, 2018,~~May 7, 2022, we were in compliance with all covenants and expect to remain in compliance with all covenants under our borrowing arrangements.

As of February 10, 2018, $1.116 billion of commercial paper borrowings and the $250 million 7.125% Senior Notes due August 2018 were classified as long-term in the Consolidated Balance Sheets as we had the ability and intent to refinance them on a long-term basis through available capacity in our revolving credit facility. As of February 10, 2018, we had $1.997 billion of availability under our $2.0 billion revolving credit facilities, which would allow us to replace these short-term obligations with long-term financing facility.

Our adjusted debt to earnings before ~~impairment,~~ interest, taxes, depreciation, amortization, rent and share-based compensation expense (“EBITDAR”) ratio was ~~2.5:~~2.1:1 as of ~~February 10, 2018,~~May 7, 2022 and was ~~2.6:~~2.0:1 as of ~~February 11, 2017.~~May 8, 2021. We calculate adjusted debt as the sum of total debt, ~~capital~~financing lease ~~obligations~~liabilities and rent times six; and we calculate adjusted EBITDAR by adding ~~impairment before tax impact,~~ interest, taxes, depreciation, amortization, rent, and share-based ~~expenses~~compensation expense to net income. Adjusted debt to EBITDAR is calculated on a trailing four quarter basis. We target our debt levels to a ratio of adjusted debt to EBITDAR in order to maintain our investment grade credit ratings. We believe this is important information for the management of our debt levels. ToManagement expects the ratio of adjusted debt to EBITDAR to return to pre-pandemic levels in the future, increasing debt levels. Once the target ratio is achieved, to the extent adjusted EBITDAR ~~continues to grow in future years,~~increases, we expect our debt levels to increase; conversely, if adjusted EBITDAR ~~declines,~~decreases, we would expect our debt levels to decrease. Refer to the “Reconciliation ofNon-GAAP Financial Measures” section for further details of our calculation.

Stock Repurchases

From January 1, 1998 to ~~February 10, 2018,~~May 7, 2022, we have repurchased a total of ~~143.1~~152.0 million shares of our common stock at an aggregate cost of ~~$18.354~~$29.1 billion, including ~~824,733~~1.7 million shares of our common stock at an aggregate cost of ~~$527.5 million~~$3.4 billion during the ~~twenty-four~~thirty-six week period ended ~~February 10, 2018.~~ May 7, 2022.

On March ~~21, 2017,~~22, 2022, the Board voted to ~~increase~~authorize the ~~authorization by $750 million. This~~repurchase of an additional $2.0 billion of our common stock in connection with our ongoing share repurchase program, which raised the total value of shares authorized to be repurchased to ~~$18.65~~$31.2 billion. Considering the cumulative repurchases as of ~~February 10, 2018,~~May 7, 2022, we had ~~$296.2 million~~$2.1 billion remaining under the Board’s authorization to repurchase our common stock.

During the twenty-four week period ended February 10, 2018, we retired 1.5 million shares of treasury stock which had previously been repurchased under our share repurchase program. The retirement increased Retained deficit by $918.5 million and decreased Additional~~paid-in~~ ~~capital by $60.5 million. During the comparable prior year period, we retired 1.8 million shares of treasury stock, which increased Retained deficit by $1.321 billion and decreased Additionalpaid-in~~ ~~capital by $64.9 million.~~

Subsequent to ~~February 10, 2018,~~May 7, 2022 and through June 3, 2022, we have repurchased ~~382,928~~103,726 shares of our common stock at an aggregate cost of ~~$264.9~~$203.6 million.

Off-Balance Sheet Arrangements

Since our fiscal year end, we have ~~cancelled,~~canceled, issued and modifiedstand-by letters of credit that are primarily renewed on an annual basis to cover deductible payments to our casualty insurance carriers. Our totalstand-by letters of credit commitment at ~~February 10, 2018,~~May 7, 2022, was ~~$108.4~~$131.9 million, compared with ~~$88.6~~$162.4 million at August ~~26, 2017,~~28, 2021, and our total surety bonds commitment at ~~February 10, 2018,~~May 7, 2022, was ~~$32.5~~$37.6 million, compared with ~~$28.8~~$35.4 million at August ~~26, 2017.~~28, 2021.

Financial Commitments

Except for the previously discussed ~~amendments to our existing revolving credit facilities, debt issuance~~Revolving Credit Agreement and ~~retirement,~~the repayment of the $500 million 3.700% Senior Notes due April 2022, as of ~~February 10, 2018,~~May 7, 2022, there were no significant changes to our contractual obligations as described in our Annual Report on Form10-K for the year ended August ~~26, 2017.~~28, 2021.

Reconciliation ofNon-GAAP Financial Measures

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes certain financial measures not derived in accordance with GAAP. Thesenon-GAAP financial measures provide additional information for determining our ~~optimum~~optimal capital structure and are used to assist management in evaluating performance and in making appropriate business decisions to maximize stockholders’ value.

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Non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purpose of analyzing our operating performance, financial position or cash flows. However, we have presented ~~the~~non-GAAP financial measures, as we believe they provide additional information that is useful to ~~investors.~~investors as it indicates more clearly our comparative year-to-year operating results. Furthermore, our management and the Compensation Committee of the Board use ~~the abovementioned~~these non-GAAP financial measures to analyze and compare our underlying operating results and use select measurements to determine payments of performance-based compensation. We have included a reconciliation of this information to the most comparable GAAP measures in the following reconciliation tables.

Reconciliation ofNon-GAAP Financial Measure: Adjusted After-Tax ~~Return on Invested Capital “ROIC”~~ ROIC

The following tables calculate the percentages of adjusted ROIC for the trailing four quarters ended ~~February 10, 2018~~May 7, 2022 and ~~February 11, 2017.~~May 8, 2021.


	A		B		A-B=C		D		C+D
	Fiscal Year		Thirty-Six		Sixteen		Thirty-Six		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 28,		May 8,		August 28,		May 7,		May 7,
(in thousands, except percentage)	2021		2021		2021		2022		2022

Net income	$	2,170,314	$	1,384,543	$	785,771	$	1,619,561	$	2,405,332
Adjustments:
Interest expense		195,337		137,217		58,120		127,642		185,762
Rent expense⁽¹⁾		345,380		236,737		108,643		251,433		360,076
Tax effect⁽²⁾		(110,847)		(76,661)		(34,186)		(77,710)		(111,896)
Adjusted after-tax return	$	2,600,184	$	1,681,836	$	918,348	$	1,920,926	$	2,839,274

Average debt⁽³⁾									$	5,541,462
Average stockholders’ deficit⁽³⁾										(2,442,077)
Add: Rent x 6⁽¹⁾										2,160,456
Average finance lease liabilities⁽³⁾										268,111
Invested capital									$	5,527,952

Adjusted after-tax ROIC										51.4	%


	A		B		A-B=C		D		C+D
	Fiscal Year		Thirty-Six		Sixteen		Thirty-Six		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 29,		May 9,		August 29,		May 8,		May 8,
(in thousands, except percentage)	2020		2020		2020		2021		2021

Net income	$	1,732,972	$	992,515	$	740,457	$	1,384,543	$	2,125,000
Adjustments:
Interest expense		201,165		135,528		65,637		137,217		202,854
Rent expense⁽¹⁾		329,783		227,327		102,456		236,737		339,193
Tax effect⁽²⁾		(115,747)		(79,102)		(36,645)		(81,522)		(118,167)
Adjusted after-tax return	$	2,148,173	$	1,276,268	$	871,905	$	1,676,975	$	2,548,880

Average debt⁽³⁾									$	5,446,162
Average stockholders' deficit⁽³⁾										(1,364,932)
Add: Rent x 6⁽¹⁾										2,035,158
Average finance lease liabilities⁽³⁾										227,061
Invested capital									$	6,343,449

Adjusted after-tax ROIC										40.2	%

   A B A-B=C D C+D
  (in thousands, except percentage)
Fiscal Year
Ended
August 26,
2017

Twenty-Four
Weeks Ended
February 11,
2017

Twenty-Eight
Weeks
Weeks Ended
August 26,
2017

Twenty-Four
Weeks Ended
February 10,
2018

Trailing Four
Quarters Ended
February 10,
2018
  Net income
   $ 1,280,869 $ 515,270 $ 765,599 $ 570,533 $ 1,336,132
  Adjustments:

  Impairment before tax impact
   – – – 193,162 193,162
  Interest expense
   154,580 67,504 87,076 78,229 165,305
  Rent expense
   302,928 135,859 167,069 142,712 309,781
  Tax effect⁽¹⁾
   (153,265 ) (69,957 ) (83,308 ) (112,656 ) (195,964 )
  Deferred tax remeasurement
   – – – (136,679 ) (136,679 )


  After-tax return
   $       1,585,112 $          648,676 $       936,436 $          735,301 $       1,671,737


  Average debt⁽²⁾
   $ 5,082,494
  Average deficit⁽³⁾
   (1,565,135 )
  Rent x 6⁽⁴⁾
   1,858,686
  Average capital lease obligations⁽⁵⁾
   153,599


  Invested capital
   $ 5,529,644


  ROIC
   30.2%



   A B A-B=C D C+D
  (in thousands, except percentage)
Fiscal Year
Ended
August 27,
2016

Twenty-Four
Weeks Ended
February 13,
2016

Twenty-Eight
Weeks Ended
August 27,
2016

Twenty-Four
Weeks Ended
February 11,
2017

Trailing Four
Quarters Ended
February 11,
2017
  Net income
   $ 1,241,007 $ 486,725 $ 754,282 $ 515,270 $ 1,269,552
  Adjustments:

  Interest expense
   147,681 67,842 79,839 67,504 147,343
  Rent expense
   280,490 128,897 151,593 135,859 287,452
  Tax effect⁽¹⁾
   (147,291 ) (67,678 ) (79,613 ) (69,957 ) (149,570 )


  After-tax return
   $ 1,521,887 $ 615,786 $ 906,101 $ 648,676 $ 1,554,777


  Average debt⁽²⁾
   $ 4,974,468
  Average deficit⁽³⁾
   (1,822,960 )
  Rent x 6⁽⁴⁾
   1,724,712
  Average capital lease obligations⁽⁵⁾
   140,851


  Invested capital
   $ 5,017,071


  ROIC
   31.0%

~~(1)~~ The effective tax rate was 29.9%, excluding the impact of the revaluation of net deferred tax liabilities, and 34.4% over the trailing four quarters ended February 10, 2018 and February 11, 2017, respectively.
~~(2)~~ ~~Average debt is equal to the average of our debt measured as of the previous five quarters.~~
~~(3)~~ ~~Average equity is equal to the average of our stockholders’ deficit measured as of the previous five quarters.~~
~~(4)~~ ~~Rent is multiplied by a factor of six to capitalize operating leases in the determination ofpre-tax~~ ~~invested capital.~~
~~(5)~~ ~~Average capital lease obligations are equal to the average of our capital lease obligations measured as of the previous five quarters.~~
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Reconciliation ofNon-GAAP Financial Measure: Adjusted Debt to ~~Earnings before Impairment, Interest, Taxes, Depreciation, Rent and Share-Based Expense “EBITDAR”~~EBITDAR

The following tables calculate the ratio of adjusted debt to EBITDAR for the trailing four quarters ended ~~February 10, 2018~~May 7, 2022 and ~~February 11, 2017.~~May 8, 2021.


	A		B		A-B=C		D		C+D
	Fiscal Year		Thirty-Six		Sixteen		Twenty-Four		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 28,		May 8,		August 28,		May 7,		May 7,
(in thousands, except ratio)	2021		2021		2021		2022		2022

Net income	$	2,170,314	$	1,384,543	$	785,771	$	1,619,561	$	2,405,332
Add: Interest expense		195,337		137,217		58,120		127,642		185,762
Income tax expense		578,876		378,737		200,139		419,712		619,851
EBIT		2,944,527		1,900,497		1,044,030		2,166,915		3,210,945
Add: Depreciation and amortization expense		407,683		278,044		129,639		301,365		431,004
Rent expense⁽¹⁾		345,380		236,737		108,643		251,433		360,076
Share-based expense		56,112		38,061		18,051		49,058		67,109
EBITDAR	$	3,753,702	$	2,453,339	$	1,300,363	$	2,768,771	$	4,069,134

Debt									$	6,057,444
Financing lease liabilities										288,483
Add: Rent x 6⁽¹⁾										2,160,456
Adjusted debt									$	8,506,383

Adjusted debt to EBITDAR										2.1

   A    B    A-B=C    D    C+D
  (in thousands, except ratio)
Fiscal Year
Ended
August 26,
2017

Twenty-Four
Weeks Ended
February 11,
2017

Twenty-Eight
Weeks Ended
August 26,
2017

Twenty-Four
Weeks Ended
February 10,
2018

Trailing Four
Quarters Ended
February 10,
2018
  Net income
   $ 1,280,869    $ 515,270    $ 765,599    $ 570,533    $ 1,336,132
  Add:  Impairment before tax impact
   –    –    –    193,162    193,162
    Interest expense
   154,580    67,504    87,076    78,229    165,305
    Income tax expense
   644,620    260,097    384,523    25,090    409,613










  Adjusted EBIT
   2,080,069    842,871    1,237,198    867,014    2,104,212
  Add:  Depreciation expense
   323,051    144,645    178,406    157,337    335,743
    Rent expense
   302,928    135,859    167,069    142,712    309,781
    Share-based expense
   38,244    20,711    17,533    23,764    41,297










  EBITDAR
   $       2,744,292    $       1,144,086    $       1,600,206    $       1,190,827    $       2,791,033










  Debt
               $ 5,043,541
  Capital lease obligations
               156,238
  Rent x 6⁽¹⁾
               1,858,686


  Adjusted debt
               $ 7,058,465


  Adjusted debt / EBITDAR
               2.5



   A    B    A-B=C    D    C+D
  (in thousands, except ratio)
Fiscal Year
Ended
August 27,
2016

Twenty-Four
Weeks Ended
February 13,
2016

Twenty-Eight
Weeks Ended
August 27,
2016

Twenty-Four
Weeks Ended
February 11,
2017

Trailing Four
Quarters Ended
February 11,
2017
  Net income
   $ 1,241,007    $ 486,725    $ 754,282    $ 515,270    $ 1,269,552
    Interest expense
   147,681    67,842    79,839    67,504    147,343
    Income tax expense
   671,707    266,088    405,619    260,097    665,716










  EBIT
   2,060,395    820,655    1,239,740    842,871    2,082,611
  Add:  Depreciation expense
   297,397    134,936    162,461    144,645    307,106
    Rent expense
   280,490    128,897    151,593    135,859    287,452
    Share-based expense
   39,825    18,547    21,278    20,711    41,989










  EBITDAR
   $ 2,678,107    $ 1,103,035    $ 1,575,072    $ 1,144,086    $ 2,719,158










  Debt
               $ 5,151,862
  Capital lease obligations
               149,802
  Rent x 6⁽¹⁾
               1,724,712


  Adjusted debt
               $ 7,026,376


  Adjusted debt / EBITDAR
               2.6


	A		B		A-B=C		D		C+D
	Fiscal Year		Thirty-Six		Sixteen		Twenty-Four		Trailing Four
	Ended		Weeks Ended		Weeks Ended		Weeks Ended		Quarters Ended
	August 29,		May 9,		August 29,		May 8,		May 8,
(in thousands, except ratio)	2020		2020		2020		2021		2021

Net income	$	1,732,972	$	992,515	$	740,457	$	1,384,543	$	2,125,000
Add: Interest expense		201,165		135,528		65,637		137,217		202,854
Income tax expense		483,542		271,591		211,951		378,737		590,688
EBIT		2,417,679		1,399,634		1,018,045		1,900,497		2,918,542
Add: Depreciation and amortization expense		397,466		272,115		125,351		278,044		403,395
Rent expense⁽¹⁾		329,783		227,327		102,456		236,737		339,193
Share-based expense		44,835		32,251		12,584		38,061		50,645
EBITDAR	$	3,189,763	$	1,931,327	$	1,258,436	$	2,453,339	$	3,711,775

Debt									$	5,267,896
Financing lease liabilities										228,597
Add: Rent x 6⁽¹⁾										2,035,158
Adjusted debt									$	7,531,651

Adjusted debt to EBITDAR										2.0

(1)

~~Rent is multiplied by a factor~~The table below outlines the calculation of ~~six~~rent expense and reconciles rent expense to ~~capitalize operating leases in~~total lease cost, per ASC 842, the ~~determination of adjusted debt.~~most directly comparable GAAP financial measure, for the trailing four quarters ended May 7, 2022 and May 8, 2021.


	Trailing Four Quarters Ended
(in thousands)	May 7, 2022		May 8, 2021

Total lease cost, per ASC 842	$	451,601	$	421,750
Less: Finance lease interest and amortization		(65,128)		(55,725)
Less: Variable operating lease components, related to insurance and common area maintenance		(26,397)		(26,832)
Rent expense	$	360,076	$	339,193

~~Reconciliation ofNon-GAAP~~ ~~Financial Measure: Adjusted Operating Profit~~

~~The following table calculates adjusted operating profit. Adjusted operating profit is calculated to exclude the impact of impairment charges and operating results of IMC and AutoAnything:~~

   Twelve Weeks Ended    Twenty-Four Weeks Ended
  (in thousands)
     February 10,
2018      February 11,
2017      February 10,
2018      February 11,
2017
  Operating profit
   $ 205,098    $ 383,969    $ 673,852    $ 842,871
  Impairment
   193,162    —    193,162    —
  Operating results – IMC and AutoAnything
   5,234    4,814    8,270    9,901








  Adjusted operating profit
   $       403,494    $       388,783    $       875,284    $       852,772

~~Reconciliation ofNon-GAAP~~ ~~Financial Measure: Adjusted Net Income~~

The following table calculates adjusted net income. Adjusted net income is calculated to exclude the impact of impairment charges, Tax Reform, excess tax benefits from option exercises and operating results of IMC and AutoAnything:

   Twelve Weeks Ended Twenty-Four Weeks Ended
  (in thousands)
     February 10,
2018   February 11,
2017   February 10,
2018   February 11,
2017
  Net income
   $ 289,530 $ 237,145 $ 570,533 $ 515,270
  Impairment, net of $46.6MM income tax benefit
   146,512 — 146,512 —
  Tax Reform
   (171,398 ) — (171,398 ) —
  Impact of excess tax benefits from option exercises
   (32,076 ) (12,698 ) (34,328 ) (15,646 )
  Operating results – IMC and AutoAnything⁽¹⁾
   3,712 2,990 5,859 6,157


  Adjusted net income
   $       236,280 $       227,437 $       517,178 $       505,781

~~Reconciliation ofNon-GAAP~~ ~~Financial Measure: Adjusted Diluted Earnings Per Share~~

The following table calculates the adjusted diluted earnings per share. Adjusted diluted earnings per share is calculated to exclude the impact of impairment charges, Tax Reform, excess tax benefits from option exercises and operating results of IMC and AutoAnything:

   Twelve Weeks Ended Twenty-Four Weeks Ended

     February 10,
2018   February 11,
2017   February 10,
2018   February 11,
2017
  Diluted earnings per share
   $         10.38 $           8.08 $         20.38 $         17.45
  Impairment, net of $46.6MM income tax benefit
   5.25 — 5.23 —
  Tax Reform
   (6.14 ) — (6.12 ) —
  Impact of excess tax benefits from option exercises
   (1.15 ) (0.43 ) (1.23 ) (0.53 )
  Operating results – IMC and AutoAnything⁽¹⁾
   0.13 0.10 0.21 0.21


  Adjusted diluted earnings per share
   $ 8.47 $ 7.75 $ 18.47 $ 17.13

~~(1)~~(2)

~~Operating results – IMC~~Effective tax rate over trailing four quarters ended May 7, 2022 and ~~AutoAnything are net of tax benefit.~~May 8, 2021 is 20.5% and 21.8%, respectively.

(3)	All averages are computed based on trailing five quarter balances.

Table of Contents

Recent Accounting Pronouncements

Refer to Note A of the Notes to Condensed Consolidated Financial Statements for the discussion of recent accounting pronouncements.

Critical Accounting Policies and Estimates

Preparation of our consolidated financial statements requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the financial statements, reported amounts of revenues and expenses during the reporting period and related disclosures of contingent liabilities. Our policies are evaluated on an ongoing basis, and our significant judgments and estimates are drawn from historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results could differ under different assumptions or conditions.

Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form10-K for the year ended August ~~26, 2017. Our~~28, 2021. There have been no significant changes to our critical accounting policies ~~have not changed~~ since the filing of our Annual Report on Form10-K for the year ended August ~~26, 2017.~~28, 2021.

~~Item 3.~~ ~~Quantitative and Qualitative Disclosures about Market Risk~~

Item 3.Quantitative and Qualitative Disclosures about Market Risk

At ~~February 10, 2018,~~May 7, 2022, the only material ~~change~~changes to our instruments and positions that are sensitive to market risk since the disclosures in our ~~2017~~ Annual Report on Form 10-K for the year ended August 28, 2021 were our Revolving Credit Agreement, which was amended and restated on November 15, 2021 to ~~Stockholders was~~increase our borrowing capacity from $2.0 billion to $2.25 billion, the ~~$39.6~~$500 million 3.700% Senior Note debt repayment and the $1.3 billion net ~~decrease~~increase in commercial paper.

The fair value of our debt was estimated at ~~$5.049~~$5.9 billion as of ~~February 10, 2018~~May 7, 2022 and ~~$5.171~~$5.7 billion as of August ~~26, 2017,~~28, 2021, based on the quoted market prices for the same or similar debt issues or on the current rates available to ~~AutoZone~~us for debt ofhaving the same ~~terms (Level 2).~~remaining maturities. Such fair value was less than the carrying value of debt by $163.3 million at May 7, 2022, and greater than the carrying value of debt by ~~$5.4 million at February 10, 2018 and $90.3~~$413.1 million at August ~~26, 2017.~~28, 2021. The carrying value of debt reflects its face amount adjusted for any unamortized debt issuance costs and discounts. We had ~~$1.116~~$1.3 billion of variable rate debt outstanding at ~~February 10, 2018~~May 7, 2022 and ~~$1.155 billion of~~no variable rate debt outstanding at August ~~26, 2017.~~28, 2021. At these borrowing levels for variable rate debt, a one percentage point increase in interest rates would have had an unfavorable annual impact on ourpre-tax earnings and cash flows of ~~$11.2~~$12.8 million in fiscal ~~2018.~~2022. The primary interest rate exposure ~~on variable rate debt~~ is based on LIBOR. We had outstanding fixed rate debt of ~~$3.928~~$4.8 billion, net of unamortized debt issuance costs of ~~$22.0~~$25.9 million at ~~February 10, 2018~~May 7, 2022 and ~~$3.926~~$5.3 billion, net of unamortized debt issuance costs of ~~$23.9~~$30.2 million at August ~~26, 2017.~~28, 2021. A onepercentage point increase in interest rates would ~~reduce~~have reduced the fair value of our fixed rate debt by ~~$175.1~~$182.5 million at ~~February 10, 2018.~~May 7, 2022.

~~Item 4.~~

~~Controls and Procedures~~

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of ~~February 10, 2018,~~May 7, 2022, an evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules13a-15(e) and15d-15(e) under the Exchange Act, as amended. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of ~~February 10, 2018.~~May 7, 2022.

Changes in Internal Controls

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~February 10, 2018~~May 7, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

~~Item 1.~~

~~Legal Proceedings~~

~~In 2004, we acquired a store site~~Item 1. Legal Proceedings

As of the date of this filing, there have been no additional material legal proceedings or material developments in ~~Mount Ephraim, New Jersey that had previously been~~ the ~~site~~legal proceedings disclosed in Part 1, Item 3, of a gasoline service station and contained evidence of groundwater contamination. Upon acquisition, we voluntarily reported the groundwater contamination issue to the New Jersey Department of Environmental Protection (“NJDEP”) and entered into a Voluntary Remediation Agreement providingour Annual Report in Form 10-K for the ~~remediation~~fiscal year ended August 28, 2021.

Table of the contamination associated with the property. We have conducted and paid for (at an immaterial cost to us) remediation of contamination on the property. We have also voluntarily investigated and addressed potential vapor intrusion impacts in downgradient residences and businesses. The NJDEP has asserted, in a Directive and Notice to Insurers dated February 19, 2013 and again in an Amended Directive and Notice to Insurers dated January 13, 2014 (collectively the “Directives”), that we are liable for the downgradient impacts under a joint and severable liability theory. By letter dated April 23, 2015, NJDEP has demanded payment from us, and other parties, in the amount of approximately $296 thousand for costs incurred by NJDEP in connection with contamination downgradient of the property. By letter dated January 29, 2016, we were informed that NJDEP has filed a lien against the property in connection with approximately $355 thousand in costs incurred by NJDEP in connection with contamination downgradient of the property. We have contested, and will continue to contest, any such assertions due to the existence of other entities/sources of contamination, some of which are named in the Directives and the April 23, 2015 Demand, in the area of the property. Pursuant to the Voluntary Remediation Agreement, upon completion of all remediation required by the agreement, we believe we should be eligible to be reimbursed up to 75 percent of qualified remediation costs by the State of New Jersey. We have asked the state for clarification that the agreement applies to~~off-site~~ work, and the state is considering the request. Although the aggregate amount of additional costs that we may incur pursuant to the remediation cannot currently be ascertained, we do not currently believe that fulfillment of our obligations under the agreement or otherwise will result in costs that are material to our financial condition, results of operations or cash flows.Contents

In July 2014, we received a subpoena from the District Attorney of the County of Alameda, along with other environmental prosecutorial offices in the State of California, seeking documents and information related to the handling, storage and disposal of hazardous waste. We received notice that the District Attorney will seek injunctive and monetary relief. We are cooperating fully with the request and cannot predict the ultimate outcome of these efforts, although we have accrued all amounts we believe to be probable and reasonably estimable. We do not believe the ultimate resolution of this matter will have a material adverse effect on the consolidated financial position, results of operations or cash flows.

In April 2016, we received a letter from the California Air Resources Board seeking payment for alleged violations of the California Health and Safety Code related to the sale of certain aftermarket emission parts in the State of California. We do not believe that any resolution of the matter will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

We are involved in various other legal proceedings incidental to the conduct of our 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. We do not currently believe that, either individually or in the aggregate, these matters will result in liabilities material to our financial condition, results of operations or cash flows.

~~Item 1A.~~

~~Risk Factors~~

Item 1A. Risk Factors

As of the date of this filing, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Annual Report on Form10-K for the fiscal year ended August ~~26, 2017.~~28, 2021.

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Shares of common stock repurchased by the Company during the quarter ended ~~February 10, 2018~~May 7, 2022 were as follows:

Issuer Repurchases of Equity Securities

Issuer Repurchases of Equity Securities
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 19, 2017 to December 16, 2017
   13,002    $ 616.38    13,002    $ 463,116,160
December 17, 2017 to January 13, 2018
   32,537    768.29    32,537    438,118,450
January 14, 2018 to February 10, 2018
   181,764    780.52    181,764    296,247,583








Total
           227,303    $         769.38                    227,303    $         296,247,583


				Total Number of	Maximum Dollar
				Shares Purchased as	Value that May Yet
	Total Number	Average		Part of Publicly	Be Purchased Under
	of Shares	Price Paid		Announced Plans or	the Plans or
Period	Purchased	per Share		Programs	Programs

February 13, 2022 to March 12, 2022	119,542	$	1,898.22	119,542	$	730,657,085
March 13, 2022 to April 9, 2022	181,485		1,972.17	181,485		2,372,738,270
April 10, 2022 to May 7, 2022	147,547		2,136.02	147,547		2,057,574,959
Total	448,574	$	2,006.36	448,574	$	2,057,574,959

During 1998, we announced a program permitting us to repurchase a portion of our outstanding shares not to exceed a dollar maximum established by our Board of Directors. This program was most recently amended by the Board on March ~~21, 2017~~22, 2022 to ~~increase~~authorize the repurchase ~~authorization by $750 million.~~of an additional $2.0 billion of our common stock. This brings the ~~total value of shares~~cumulative share repurchase authorization to ~~be repurchased to $18.65~~$31.2 billion. All of the above repurchases were part of this program.

Subsequent to ~~February 10, 2018,~~May 7, 2022 and through June 3, 2022, we have repurchased ~~382,928~~103,726 shares of our common stock at an aggregate cost of ~~$264.9~~$203.6 million.

~~Item 3.~~ ~~Defaults Upon Senior Securities~~

Item 3. Defaults Upon Senior Securities

Not applicable.

~~Item 4.~~

~~Mine Safety Disclosures~~

Item 4. Mine Safety Disclosures

Not applicable.

~~Item 5.~~

~~Other Information~~

Item 5. Other Information

Not applicable.

~~Item 6.~~

~~Exhibits~~

Item 6. Exhibits

The following exhibits are being filed herewith:


3.1
	~~3.1~~	Restated Articles of Incorporation of AutoZone, Inc. ~~incorporated~~Incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form10-Q for the quarter ended February 13, 1999.

3.2	~~3.2~~	~~Sixth~~Seventh Amended and Restated~~By-laws~~ By-Laws of AutoZone, Inc. ~~incorporated~~Incorporated by reference to Exhibit 3.1 to the Current Report onForm 8-K dated ~~October 7, 2015.~~March 19, 2018.

15.1	~~4.1~~	Master Extension, New Commitment and Amendment Agreement dated as of November 18, 2017 among AutoZone, Inc. as Borrower; Bank of America, N.A. as Administrative Agent and Swingline Lender; JPMorgan Chase Bank, N.A. as Syndication Agent; Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Chase Bank, N.A. as Joint Lead Arrangers; Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Chase Bank, N.A., SunTrust Robinson Humphrey, Inc., U.S. Bank National Association, Wells Fargo Securities, LLC and Barclay’s Capital as Joint Book Runners; SunTrust Bank, U.S. Bank National Association, Wells Fargo Bank, National Association and Barclay’s Bank PLC as Documentation Agents; and the several lenders party thereto. Incorporated by reference to Exhibit 10.1 of the Current Report on Form~~8-K~~ ~~dated November 18, 2017.~~

	~~12.1~~	~~Computation of Ratio of Earnings to Fixed Charges.~~

	~~15.1~~	Letter Regarding Unaudited Interim Financial Statements.

31.1	~~31.1~~	Certification of Principal Executive Officer Pursuant to Rules13a-14(a) and15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Table of Contents

31.2	~~31.2~~		Certification of Principal Financial Officer Pursuant to Rules13a-14(a) and15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	~~32.1~~		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*	~~32.2~~		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	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	~~101.SCH~~		Inline XBRL Taxonomy Extension Schema Document

101.CAL	~~101.CAL~~		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	~~101.LAB~~		Inline XBRL Taxonomy Extension ~~Labels~~Definition Linkbase Document

101.LAB	~~101.PRE~~	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	~~101.DEF~~		~~XBRL Taxonomy Extension Definition Document~~ The cover page for the Company’s Quarterly Report on Form 10-Q for the quarter ended May 7, 2022, has been formatted in Inline XBRL.

*	Furnished herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	AUTOZONE, INC.

	By:	/s/ ~~WILLIAM T. GILES~~ JAMERE JACKSON
~~William T. Giles~~	Jamere Jackson
	Chief Financial Officer and Executive Vice President
	Finance and ~~Information Technology~~Store Development
	(Principal Financial Officer)

	By:	/s/ ~~CHARLIE PLEAS, III~~ J. SCOTT MURPHY
~~Charlie Pleas, III~~	J. Scott Murphy
~~Senior~~	Vice President, Controller
(Principal Accounting Officer)

Dated: June 10, 2022

~~Dated: March 16, 2018~~