Autozone AZO · USD

Note P – Segment ReportingThe Company is a leading retailer and distributor of automotive parts and accessories through the Company’s 7,657 stores in the Americas. The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, during the fourth quarter of fiscal 2025. The Company determines its segments based on how the business is managed and evaluated. During the fourth quarter of fiscal 2025, the Company combined all its previously defined operating segments into a single operating and reportable segment to align with how the Company is currently managed and evaluated. This single operating segment includes all operations which are designed to enable customers to purchase products seamlessly in stores and from our online platforms. We carry an extensive product line for cars, sport utility vehicles, vans and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, regularly reviews consolidated net income, as well as significant segment expenses included in the table below, to evaluate performance and allocate resources. The CODM also evaluates consolidated actual results versus forecasts, budgets and prior year results. The measure of segment assets is reported as “Total assets” on the Consolidated Balance Sheets as of August 30, 2025, and August 31, 2024. Expenditures for long-lived segment assets are reported as “Capital Expenditures” on the Consolidated Statements of Cash Flows for the fiscal years ended 2025, 2024 and 2023. Segment information for previous periods has been recast to conform to the current-period presentation.

Note O – Commitments and ContingenciesConstruction commitments, primarily for new stores, totaled approximately $130.5 million at August 30, 2025.The Company had $150.8 million in outstanding standby letters of credit and $100.5 million in surety bonds as of August 30, 2025, which all have expiration periods of less than one year. A substantial portion of the outstanding standby letters of credit (which are primarily renewed on an annual basis) and surety bonds are used to cover reimbursement obligations to our workers’ compensation carriers. There are no additional contingent liabilities associated with these instruments as the underlying liabilities are already reflected in the Consolidated Balance Sheets. The standby letters of credit and surety bonds arrangements have automatic renewal clauses.The Company has entered into agreements to make capital contributions to certain tax credit instruments upon the completion of project milestones. As of August 30, 2025, the Company had commitments to make certain additional capital contributions to these tax credit instruments totaling $207.2 million in fiscal 2026.

Note C – Marketable Debt SecuritiesThe Company’s basis for determining the cost of a security sold is the “Specific Identification Model.” Unrealized gains (losses) on marketable debt securities are recorded in Accumulated Other Comprehensive Loss. The Company’s available-for-sale marketable debt securities consisted of the following:​​​​​​​​​​​​​​​August 30, 2025​ Amortized Gross Gross ​​​Cost​Unrealized​Unrealized​Fair(in thousands)​Basis​Gains​Losses​Value​​​​​​​​​​​​​Corporate debt securities​$ 23,441​$ 270​$ (33)​$ 23,678Government bonds​ 63,053​ 910​ (201)​ 63,762Mortgage-backed securities​ 21,433​ 227​ (81)​ 21,579Asset-backed securities and other​ 15,043​ 81​ (3)​ 15,121​​$ 122,970​$ 1,488​$ (318)​$ 124,140​​​​​​​​​​​​​​​​​August 31, 2024​ Amortized Gross Gross ​​​Cost​Unrealized​Unrealized​Fair(in thousands)​Basis​Gains​Losses​Value​​​​​​​​​​​​​Corporate debt securities​$ 32,355​$ 183​$ (78)​$ 32,460Government bonds​ 50,251​ 483​ (493)​ 50,241Mortgage-backed securities​ 22,859​ 326​ (95)​ 23,090Asset-backed securities and other​ 16,327​ 66​ (26)​ 16,367​​$ 121,792​$ 1,058​$ (692)​$ 122,158​The contractual maturities of the Company’s available for sale marketable debt securities are as follows:​​​​​​​​​​August 30, 2025​​Amortized​Fair(in thousands)​Cost Basis​Value​​​​​​​Due within one year​$ 19,966​$ 18,662Due after one year through five years​​ 56,262​​ 58,277Due after five years through ten years​​ 31,619​​ 31,993Due after ten years​​ 15,123​​ 15,208​​$ 122,970​$ 124,140​The marketable debt securities held at August 30, 2025, had effective maturities ranging from less than one year to approximately twenty-eight years. At August 30, 2025, the Company held 29 securities that are in an unrealized loss position of approximately $0.3 million. In evaluating whether a credit loss exists for the securities, the Company considers factors such as the 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. The Company did not realize any material gains or losses on its marketable debt securities during fiscal 2025, 2024 or 2023.Included above in total marketable debt securities are $117.4 million and $111.

Note E – Income Taxes The components of operating income before income taxes are as follows:​​​​​​​​​​​​​Year Ended​​August 30,​August 31,​August 26,(in thousands)​2025​2024​2023​​​​​​​​​​Domestic​$ 2,499,120​$ 2,663,148​$ 2,621,714International​ 635,212​ 673,982​ 545,900​​$ 3,134,332​$ 3,337,130 $ 3,167,614​The provision for income tax expense consisted of the following:​​​​​​​​​​​​Year Ended​​August 30,​August 31,​August 26,(in thousands) 2025​2024​2023​​​​​​​​​​Current tax provision (benefit): ​ ​ ​ Federal​$ 610,076​$ 846,176​$ 491,338State​ 68,312​ 54,837​ 86,687International​ 182,148​ 193,794​ 154,907Purchased tax credits​​ (250,698)​​ (368,870)​​ (68,037)​​ 609,838​ 725,937​ 664,895Deferred tax provision (benefit):​ ​ ​ Federal​ 77,770​ (163,775)​ 26,858State​ (4,463)​ 12,264​ (21,847)International​ (28,217)​ (10,616)​ (24,126)Purchased tax credits​​ (18,843)​​ 110,893​​ (6,592)​​ 26,247​ (51,234)​ (25,707)Income tax expense​$ 636,085​$ 674,703​$ 639,188​A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before income taxes is as follows:​​​​​​​​​​Year Ended​ August 30,​August 31,​August 26,​​​2025​2024​2023​​​​​​​​ Federal tax at statutory U.S. income tax rate 21.0% 21.0% 21.0%State income taxes, net 1.6% 1.6% 1.6%Share-based compensation (1.5)% (1.9)% (2.3)% U.S. Tax on Non-U.S. Income (Subpart F)​ 2.0% 2.9% 2.5% U.S. Tax on Non-U.S. Income (GILTI)​ 1.0% 1.2% 0.8% Non-U.S. Permanent Differences​ (0.8)% (1.3)% (1.4)% Non-U.S. Rate Differences​ 1.1% 1.1% 0.4% Foreign Tax Credits​ (2.8)% (2.9)% (2.3)% Other (1.3)% (1.5)% (0.1)% Effective tax rate 20.3% 20.2% 20.2%​For the year ended August 30, 2025, August 31, 2024, and August 26, 2023, the Company recognized excess tax benefits from stock option exercises of $58.2 million, $81.4 million, and $92.2 million, respectively.The Company is subject to a tax on global intangible low-taxed income (“GILTI”) which is imposed on foreign earnings. The Company has made the election to record this tax as a period cost, thus has not adjusted the deferred tax assets or liabilities of its foreign subsidiaries for this tax.

Note N – Share-Based PlansThe Company has several active and inactive equity incentive plans under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. Awards under these plans have been in the form of restricted stock, restricted stock units, stock options, stock appreciation rights and other awards as defined by the plans. The Company also has an Employee Stock Purchase Plan that allows employees to purchase Company shares at a discount subject to certain limitations. The Company also has an Executive Stock Purchase Plan which permits all eligible executives to purchase AutoZone’s common stock using up to twenty-five percent of his or her annual salary and bonus.Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award PlanOn December 15, 2010, the Company’s stockholders approved the 2011 Equity Incentive Award Plan (the “2011 Plan”), allowing the Company to provide equity-based compensation to non-employee directors and employees for their service to AutoZone or its subsidiaries or affiliates. Prior to the Company’s adoption of the 2011 Plan, equity-based compensation was provided to employees under the 2006 Stock Option Plan and to non-employee directors under the 2003 Director Compensation Plan (the “2003 Comp Plan”).During fiscal 2016, the Company’s stockholders approved the Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan (the “Amended 2011 Equity Plan”). The Amended 2011 Equity Plan imposes a maximum limit on the compensation, measured as the sum of any cash compensation and the aggregate grant date fair value of awards granted under the Amended 2011 Equity Plan, which may be paid to non-employee directors for such service during any calendar year. The Amended 2011 Equity Plan also applies a ten-year term on the Amended 2011 Equity Plan through December 16, 2025, and extended the Company’s ability to grant incentive stock options under the Amended 2011 Equity Plan through October 7, 2025.AutoZone, Inc. 2020 Omnibus Incentive Award PlanOn December 16, 2020, the Company’s stockholders approved the AutoZone, Inc. 2020 Omnibus Incentive Award Plan (the “2020 Omnibus Plan”), which serves as the successor to the Amended 2011 Equity Plan. The 2020 Omnibus Plan provides equity-based compensation to our non-employee directors and employees for their service to AutoZone or our subsidiaries or affiliates.

Note D – Leases Lease-related assets and liabilities recorded on the Consolidated Balance Sheets are as follows:​​​​​​​​​​(in thousands) Classification August 30, 2025​August 31, 2024​​​​​​​​​Assets: ​ ​​​Operating Operating lease right-of-use assets​$ 3,194,666​$ 3,057,780Finance Property and equipment​ 528,760​ 528,482Total lease assets ​$ 3,723,426​$ 3,586,262Liabilities: ​ ​ ​Current:​​​​​​​​Operating Current portion of operating lease liabilities​$ 283,564​$ 266,855Finance Accrued expenses and other​ 111,521​ 115,559Noncurrent: ​ ​ Operating Operating lease liabilities, less current portion​ 3,093,936​ 2,960,174Finance Other long-term liabilities​ 288,419​ 283,882Total lease liabilities ​$ 3,777,440​$ 3,626,470​Accumulated amortization related to finance lease assets was $139.6 million as of August 30, 2025, and $132.1 million as of August 31, 2024.​Lease costs for finance and operating leases for the 52 weeks ended August 30, 2025, and 53 weeks ended August 31, 2024 are as follows:​​​​​​​​​​​​​​For the year ended(in thousands)​Statement of Income Location​August 30, 2025​August 31, 2024​​​​​​​​​Finance lease cost: ​ ​​ Amortization of lease assets Depreciation and amortization​$ 98,597​$ 84,392Interest on lease liabilities Interest expense, net​ 21,204​ 19,279Operating lease cost(1) Selling, general and administrative expenses​ 506,824​ 485,164Total lease cost​​​$ 626,625​$ 588,835(1)Includes short-term leases, variable lease costs and sublease income, which are immaterial.

​We recognize the importance of assessing, identifying, and managing material risks from cybersecurity threats and have implemented various processes and safeguards to aid in such efforts. Our program encompasses people, processes, and technologies to safeguard our systems, data, and business from cybersecurity threats. Our program prioritizes threat mitigation and risk management, while focusing on maintaining the integrity and resilience of our systems. ​Our program is informed by industry standards, including the National Institute of Standards and Technology (NIST) Cyber Security Framework (CSF), the American National Standards Institute encryption standards and the Payment Card Industry Data Security Standard, among others. As part of our cybersecurity strategy, we regularly engage independent, outside expertise to assess and benchmark our overall program against these industry standards. ​AutoZone, with the assistance of our managed security service provider, continuously monitors our threat intelligence and events within our digital environments. We employ a variety of methods designed to test and improve our controls, including vulnerability scanning, penetration testing, and attack simulation testing. We have an incident response plan which sets forth procedures to investigate, respond to, contain, and remediate incidents with the support of a cross-functional team. The incident response plan also outlines a process for escalating and communicating incidents to members of management.​During the contract review and vendor engagement process, we assess vendors’ adherence to appropriate security practices, requirements, and expectations, including compliance with industry standards and applicable laws and regulations. We also engage a third-party to monitor certain service providers so that we may be alerted of important events that would impact such party’s risk profile. We have an Information Security Awareness program which seeks to educate our employees on security risks and best practices through training, internal communications, and security awareness campaigns. We maintain cybersecurity insurance coverage that may protect us from losses in connection with certain cybersecurity incidents.

Note I – Financing​The Company’s debt consisted of the following:​​​​​​​​​ August 30, August 31,(in thousands)​2025​2024​​​​​​​3.250% Senior Notes due April 2025, effective interest rate 3.36%​$ —​$ 400,0003.625% Senior Notes due April 2025, effective interest rate 3.78%​​ —​​ 500,0003.125% Senior Notes due April 2026, effective interest rate 3.28%​ 400,000​ 400,0005.050% Senior Notes due July 2026, effective interest rate 5.09%​​ 450,000​​ 450,0003.750% Senior Notes due June 2027, effective interest rate 3.83%​ 600,000​ 600,0004.500% Senior Notes due February 2028, effective interest rate 4.43%​​ 450,000​​ 450,0006.250% Senior Notes due November 2028, effective interest rate 6.46%​​ 500,000​​ 500,0003.750% Senior Notes due April 2029, effective interest rate 3.86%​ 450,000​ 450,0005.100% Senior Notes due July 2029, effective interest rate 5.30%​​ 600,000​​ 600,0004.000% Senior Notes due April 2030, effective interest rate 4.09%​​ 750,000​​ 750,0005.125% Senior Notes due June 2030, effective interest rate 5.14%​​ 500,000​​ —1.650% Senior Notes due January 2031, effective interest rate 2.19%​​ 600,000​​ 600,0004.750% Senior Notes due August 2032, effective interest rate 4.76%​​ 750,000​​ 750,0004.750% Senior Notes due February 2033, effective interest rate 4.70%​​ 550,000​​ 550,0005.200% Senior Notes due August 2033, effective interest rate 5.22%​​ 300,000​​ 300,0006.550% Senior Notes due November 2033, effective interest rate 6.71%​​ 500,000​​ 500,0005.400% Senior Notes due July 2034, effective interest rate 5.54%​​ 700,000​​ 700,000Commercial paper, weighted average interest rate 4.46% at August 30, 2025 and 5.40% at August 31, 2024​ 748,600​ 580,000Total debt before discounts and debt issuance costs​ 8,848,600​ 9,080,000Less: Discounts and debt issuance costs​​ 48,825​ 55,619Long-term debt​$ 8,799,775​$ 9,024,381​The Company maintains a revolving credit facility (as amended from time to time, the “Revolving Credit Agreement”) with a borrowing capacity of $2.25 billion. The maximum borrowing under the Revolving Credit Agreement may, at the Company’s option, subject to the lenders’ approval, be increased from $2.25 billion to $3.25 billion. On November 15, 2024, the Company amended the Revolving Credit Agreement to extend the termination date by one year. As amended, the Revolving Credit Agreement will terminate, and all amounts borrowed will be due and payable, on November 15, 2028.