AutoZone 2001 Annual Report Download

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2001
Annual Report

Table of contents

  • Page 1
    2001 Annual Report

  • Page 2
    ... highest level of technical advice and diagnostic support to our customers. AutoZone's website, www.autozone.com, can be used to order parts online or to look up parts in your local AutoZone store. The website is also a great resource for helpful maintenance and repair information. Through ALLDATA...

  • Page 3
    ... stock at an average price of $27 per share. AutoZone's strong cash flow opened 104 net new stores in the U.S. and 8 in Mexico in fiscal 2001. At fiscal year end, AutoZone was the largest retailer of auto parts in North America with 3,019 stores in the U.S. and 21 in Mexico. Sales ($in millions...

  • Page 4
    ...same time, to help ensure the safety of our customers and the longevity of their vehicles. All vehicles need routine maintenance, but as cars and trucks get older and out of warranty, they also need general repair work. By the time a vehicle is seven years old, it is typically into this repair cycle...

  • Page 5
    We also added more vehicle accessories to our stores, including more fashionable seat covers and floor mats, accessories for pickups and sport utility vehicles, and this year's favorite, decorative neon lighting for virtually every part of the car. Accessories are a huge opportunity for AutoZone- we...

  • Page 6
    ...E R LOAN-A-TOOL SERVICE >> Keeping America's Cars on the Road The typical AutoZone customer owns a car or truck that's over seven years old, out of warranty, and into the repair cycle. AutoZone sells parts and accessories like batteries, alternators, starters, shock absorbers, thermostats, filters...

  • Page 7
    ... assistance to customers with portable diagnostic equipment that can test a car's electrical system, including the alternator, voltage regulator, starter and battery. AutoZone's goal is to help the customer purchase the right part the first time. In these troubling times, safety and security are...

  • Page 8
    ...Creates Special Merchandising Opportunities >> Building Shareholder Value In AutoZone is more than a parts store. We've added new product categories for DIYers. We've expanded our line of auto accessories to dress up cars and trucks; products marketed to the driver, such as sunglasses and cell phone...

  • Page 9
    ...engine-specific diagnostics, repair procedures, electrical diagrams, maintenance schedules and tables, Technical Service Bulletins, recall information, and parts and labor for estimating repairs. ALLDATA Online offers additional features to help the professional mechanic build customer loyalty. One...

  • Page 10
    ...s in Sales and Products >> AutoZone is changing the way auto parts and products are sold in Mexico. It began with the first AutoZone de Mexico store that was opened in December 1998 in Nuevo Laredo and has expanded to 21 stores at 2001 fiscal year end. AutoZone's culture of customer service, a broad...

  • Page 11
    ...parte de nuestro nuevo plan...ón de SUVs (Vehí...Zone" (Entre a la Zona), enfatizando el valor del nombre comercial de AutoZone...AZ Comercial La otra parte...2001, contábamos con 21 tiendas en México, principalmente en la frontera, pero dos se encuentran en el interior...Annual Report Annual Report AZO 17

  • Page 12
    ... familia inmediata que padecen de una enfermedad larga. Los dos siguen siendo parte de la familia AutoZone y brindando su ayuda tras bambalinas. Les agradecemos a John y Tim por todos sus años de dedicación a AutoZone. Su liderazgo ayudó a hacer posible los éxitos de hoy. 18 AZO Annual Report

  • Page 13
    ... Balance Sheets ...Consolidated Statements of Cash Flows ...Consolidated Statements of Stockholders' Equity ...Notes to Consolidated Financial Statements ...Report of Independent Auditors ...Management's Report ...Officers ...Board of Directors ... 20 22 23 28 29 30 31 32 41 41 42 44 Annual Report...

  • Page 14
    ... store sales for fiscal years 1994 through 2001 are based on increase in sales for domestic auto parts stores open at least one year. All other periods are increases in sales for stores open since the beginning of the preceding fiscal year. (5) Net inventory turnover is calculated as cost of sales...

  • Page 15
    ...242,633 1,307,638 666,061 268,934 (1,969) 266,965 99,800 $ 167,165 $ 1.11 151,238 Fiscal Year Ended August 1995 1994 $ 1,808,131 1,057,033 523,440 227,658 623 228,281 89,500 $ 138,781 $...,200 11,700 39.8% 39.9% 10.3% 9.7% 6.3% 5.4% 2.5% 3.4% 2.99 x 2.57 x 9.30 x 7.77 x 26% 31% Annual Report AZO 21

  • Page 16
    ... store sales Gross profit Operating profit Income before income taxes Net income Basic earnings per share Diluted earnings per share Stock price range: High Low November 18, 2000 $ 1,063,566 2% $ 445,565 110,768 87,788 53,788 0.46 0.46 $ $ 28.00 21.00 Twelve Weeks Ended February 10, May 5, 2001...

  • Page 17
    ....9 30.5 11.4 1.7 3.7 6.0% Net sales Cost of sales, including warehouse and delivery expenses Gross profit Operating, selling, general and administrative expenses Restructuring and impairment charges Operating profit Interest expense - net Income taxes Net income August 25, 2001 100.0% 58.2 41.8 31...

  • Page 18
    ... were taken related primarily to fixed assets associated with the closure of a supply depot in Memphis, Tennessee, abandoned or discontinued technology-related assets and assets abandoned due to reorganization of departments within the Store Support Center. The Company also established a reserve of...

  • Page 19
    ... from changes in foreign exchange and interest rates. To minimize such risks, the Company may periodically use various financial instruments. All hedging transactions are authorized and executed pursuant to policies and procedures. The Company does not buy or sell financial instruments for trading...

  • Page 20
    ... and 8 in Mexico, replaced 16 U.S. stores and closed 3 U.S. stores. In addition, the Company operated 49 TruckPro stores. Construction commitments totaled approximately $24 million at August 25, 2001. The Company's new store development program requires working capital, predominantly for inventories...

  • Page 21
    ...ceases when the new standard is adopted. The new rule also requires an initial goodwill impairment assessment in the year of adoption and annual impairment tests thereafter. The Company is permitted and has elected to adopt this Statement effective August 26, 2001. Application of the nonamortization...

  • Page 22
    ... thousands, except per share data) Net sales Cost of sales, including warehouse and delivery expenses Operating, selling, general and administrative expenses Restructuring and impairment charges Operating profit Interest expense-net Income before income taxes Income taxes Net income Weighted average...

  • Page 23

  • Page 24
    ... equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental cash flow information: Interest paid, net of interest cost capitalized Income taxes paid Year Ended (52 Weeks) August 25, August 26, August 28, 2001 2000 1999 $ 175,526 $ 267,590 $ 244...

  • Page 25
    ... from officers Purchase of 14,345 shares of treasury stock 5,451 Retirement of 37,000 shares of treasury stock (370) (71,781) Sale of 2,061 shares of common stock under stock option and stock purchase plans 22 46,563 Tax benefit of exercise of stock options 13,495 Balance at August 25, 2001 $ 1,195...

  • Page 26
    ... and 21 auto parts stores in Mexico. In addition, the Company sells heavy duty truck parts and accessories through its 49 TruckPro stores in 15 states, light vehicle diagnostic and repair software through ALLDATA and diagnostic and repair information through alldatadiy.com. Fiscal Year: The Company...

  • Page 27
    ... the new standard is adopted. The new rules also require an initial goodwill impairment assessment in the year of adoption and annual impairment tests thereafter. The Company is permitted and has elected to adopt this Statement effective August 26, 2001, the first day of fiscal 2002. Application of...

  • Page 28
    ... were taken related primarily to fixed assets associated with the closure of a supply depot in Memphis, Tennessee, abandoned or discontinued technology-related assets and assets abandoned due to reorganization of departments within the Store Support Center. The Company also established a reserve of...

  • Page 29
    ...operating loss and credit carryforwards Insurance reserves Warranty reserves Accrued vacation Closed store reserves Inventory reserves Property and equipment Other Less valuation allowance Deferred tax liabilities: Property and equipment Property taxes Net deferred tax assets $ 6,461 6,461 121,361...

  • Page 30
    ... maturity date of the then-outstanding debt by one year. The credit facilities exist largely to support commercial paper borrowings and other short-term unsecured bank loans. Outstanding commercial paper and short-term unsecured bank loans at August 25, 2001, of $400.4 million are classified as long...

  • Page 31
    ... common stock in the open market. In fiscal 2001, the Company repurchased 14.3 million shares of its common stock at an aggregate cost of $366.1 million. Since fiscal 1998, the Company has repurchased a total of 47.2 million shares at an aggregate cost of $1.2 billion. At times, the Company utilizes...

  • Page 32
    ... a grant of an option to purchase a number of shares equal to the annual option grant, prorated for the time in service for the year. Under the Second Amended and Restated Directors Compensation Plan a director may receive no more than one-half of the annual and meeting fees immediately in cash, and...

  • Page 33
    ...-term rate of return on plan assets was 9.5% at August 25, 2001, August 26, 2000, and August 28, 1999. Prior service cost is amortized over the estimated average remaining service lives of the plan participants, and the unrecognized actuarial gain or loss is amortized over five years. Annual Report...

  • Page 34
    ... retailers. The plaintiffs claim that the defendants have knowingly received volume discounts, rebates, slotting and other allowances, fees, free inventory, sham advertising and promotional payments, a share in the manufacturers' profits, and excessive payments for services purportedly performed for...

  • Page 35
    ...principles generally accepted in the United States. Memphis, Tennessee September 21, 2001

  • Page 36
    ..., TruckPro Bruce G. Clark Systems, Technology & Support Chief Information Officer Brett D. Easley Merchandising Harry L. Goldsmith General Counsel & Secretary Lisa R. Kranc Marketing Michael E. Longo Store Operations Robert D. Olsen Mexico, ALLDATA & Store Development William C. Rhodes, III Supply...

  • Page 37
    .... 40. Larry Fussy David Gilmore Eric Gould Bill Graves Tricia Greenberger Bill Hackney Larry Hardy Phil Jackson Emma Jo Kauffman Jack Mitchell Tom Newbern Dave Nichols Mark Palazola Charlie Pleas Don Rawlins Rick Smith Dennis Tolivar Randy Turner Bud Wachenschwanz Scott Webb Annual Report AZO 43

  • Page 38
    ... Jr. Professor of Corporate Governance University of Delaware N. Gerry House (2) President & CEO Institute for Student Achievement Joseph R. Hyde, III Chairman GTx, Inc. James F. Keegan (1*, 4) Chairman Adams Keegan, Inc. Edward S. Lampert (1, 2*) Chief Executive Officer ESL Investments, Inc...

  • Page 39
    ... of Stockholders of AutoZone will be held at 9 a.m. on December 13, 2001, at 123 South Front Street, Memphis, Tennessee. Form 10-K/Quarterly Reports New York Stock Exchange Ticker Symbol: AZO Auditors Ernst & Young LLP Memphis, Tennessee Store Support Center Stockholders may obtain free of charge...

  • Page 40
    AutoZoners always put customers first. We know our parts and products. Our stores look great. And we've got the best merchandise at the right price. Th e Au t o Zo n e ' 5 7 C h ev y Co i n Ba n k 123 South Front Street M e m p h i s , Te n n e s s e e 3 8 1 0 3 - 3 6 0 7 (901) 495-6500