Item 6. Selected Financial Data

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Item 6. Selected Financial Data


	Fiscal Year Ended August
(in thousands, except per share data, same store sales and selected operating data)	2020(1)			2019(2)			2018(3)			2017			2016

Income Statement Data
Net sales	$	12,631,967		$	11,863,743		$	11,221,077		$	10,888,676		$	10,635,676
Cost of sales, including warehouse and delivery expenses		5,861,214			5,498,742			5,247,331			5,149,056			5,026,940
Gross profit		6,770,753			6,365,001			5,973,746			5,739,620			5,608,736
Operating, selling, general and administrative expenses		4,353,074			4,148,864			4,162,890			3,659,551			3,548,341
Operating profit		2,417,679			2,216,137			1,810,856			2,080,069			2,060,395
Interest expense, net		201,165			184,804			174,527			154,580			147,681
Income before income taxes		2,216,514			2,031,333			1,636,329			1,925,489			1,912,714
Income tax expense(4)		483,542			414,112			298,793			644,620			671,707
Net income(4)	$	1,732,972		$	1,617,221		$	1,337,536		$	1,280,869		$	1,241,007
Diluted earnings per share(4)	$	71.93		$	63.43		$	48.77		$	44.07		$	40.70
Weighted average shares for diluted earnings per share(4)		24,093			25,498			27,424			29,065			30,488
Same Store Sales
Increase in domestic comparable store net sales(5)		7.4	%		3.0	%		1.8	%		0.5	%		2.4	%
Balance Sheet Data
Current assets	$	6,811,872		$	5,028,685		$	4,635,869		$	4,611,255		$	4,239,573
Operating lease right-of-use assets(6)		2,581,677			—			—			—			—
Working capital (deficit)		528,781			(483,456)			(392,812)			(155,046)			(450,747)
Total assets		14,423,872			9,895,913			9,346,980			9,259,781			8,599,787
Current liabilities		6,283,091			5,512,141			5,028,681			4,766,301			4,690,320
Debt		5,513,371			5,206,344			5,005,930			5,081,238			4,924,119
Finance lease liabilities, less current portion(6)		155,855			123,659			102,013			102,322			102,451
Operating lease liabilities, less current portion(6)		2,501,560			—			—			—			—
Stockholders’ deficit		(877,977)			(1,713,851)			(1,520,355)			(1,428,377)			(1,787,538)
Selected Operating Data
Number of locations at beginning of year		6,411			6,202			6,029			5,814			5,609
Sold locations(7)		—			—			26			—			—
New locations		138			209			201			215			205
Closed locations		—			—			2			—			—
Net new locations		138			209			199			215			205
Relocated locations		5			2			7			5			6
Number of locations at end of year		6,549			6,411			6,202			6,029			5,814
AutoZone domestic commercial programs		5,007			4,893			4,741			4,592			4,390
Inventory per location (in thousands)	$	683		$	674		$	636		$	644		$	625
Total AutoZone store square footage (in thousands)		43,502			42,526			41,066			39,684			38,198
Average square footage per AutoZone store		6,643			6,633			6,621			6,611			6,600
Increase in AutoZone store square footage		2.3	%		3.6	%		3.5	%		3.9	%		3.8	%
Average net sales per AutoZone store (in thousands)	$	1,914		$	1,847		$	1,778		$	1,756		$	1,773
Net sales per AutoZone store average square foot	$	288		$	279		$	269		$	266		$	269
Total employees at end of year (in thousands)		100			96			89			87			84
Inventory turnover(8)		1.3x			1.3x			1.3x			1.4x			1.4x
Accounts payable to inventory ratio		115.3	%		112.6	%		111.8	%		107.4	%		112.8	%
After-tax return on invested capital(9)		38.1	%		35.7	%		32.1	%		29.9	%		31.3	%
Adjusted debt to EBITDAR(10)		1.9			2.5			2.5			2.6			2.5
Net cash provided by operating activities (in thousands)(4)	$	2,720,108		$	2,128,513		$	2,080,292		$	1,570,612		$	1,641,060
Cash flow before share repurchases and changes in debt (in thousands)(11)	$	2,185,418		$	1,758,672		$	1,596,367		$	1,017,585		$	1,166,987
Share repurchases (in thousands)(12)	$	930,903		$	2,004,896		$	1,592,013		$	1,071,649		$	1,452,462
Number of shares repurchased (in thousands)(12)		826			2,182			2,398			1,495			1,903

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(1) The 52 weeks ended August 29, 2020 was negatively impacted by the charges for additional Emergency-Time Off ("ETO") benefit enhancement for eligible part-time and full-time hourly employees and other expenses in response to COVID-19 of $83.9 million (pre-tax), recognized in the third and fourth quarters.

(2) The fiscal year ended August 31, 2019 consisted of 53 weeks.

(3) Fiscal 2018 was negatively impacted by pension termination charges of $130.3 million (pre-tax) recognized in the fourth quarter and asset impairments of $193.2 million (pre-tax) recognized in the second quarter of fiscal 2018. See “Note L – Pension and Savings Plans” and “Note M – Sale of Assets” of the Notes to Consolidated Financial Statements for more information. Fiscal 2018 also includes a benefit to net income related to the Tax Cuts and Jobs Act (“Tax Reform”). See “Note D – Income Taxes” of the Notes to Consolidated Financial Statements for more information.

(4) Fiscal 2020, 2019, 2018 and 2017 include excess tax benefits from stock option exercises of $20.9 million, $46.0 million, $31.3 million and $31.2 million, respectively, related to the adoption of Accounting Standards Update (“ASU”) 2016-09, Compensation – Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting. The Company adopted ASU 2016-09 effective August 28, 2016 and applied the recognition of excess tax deficiencies and tax benefits in the income statement on a prospective basis. Income tax expense, net income and diluted earnings per share amounts presented for prior periods were not restated. The Company applied ASU 2016-09 relating to the presentation of the excess tax benefits on the Consolidated Statements of Cash Flows retrospectively. Prior period amounts for net cash provided by operating activities for all years presented above were restated to conform to the current period presentation.

(5) The domestic comparable sales increases are based on sales for all AutoZone domestic stores open at least one year. Same store sales are computed on a 52-week basis. Relocated stores are included in the same store sales computation based on the year the original store was opened. Closed store sales are included in the same store sales computation up to the week it closes, and excluded from the computation for all periods subsequent to closing. All sales through our www.autozone.com website, including consumer direct ship-to-home sales, are also included in the computation.

(6) The Company adopted ASU 2016-02, Leases (Topic 842), beginning with its first quarter ended November 23, 2019 which resulted in the Company recognizing a right-of-use asset (“ROU asset”) and a corresponding lease liability on the balance sheet. See “Note A – Significant Accounting Policies”.

(7) 26 IMC branches were sold on April 4, 2018. See “Note M – Sale of Assets” of the Notes to Consolidated Financial Statements for more information.

(8) Inventory turnover is calculated as cost of sales divided by the average merchandise inventory balance over the trailing 5 quarters.

(9) After-tax return on invested capital is defined as after-tax operating profit (excluding rent charges) divided by invested capital (which includes a factor to capitalize leases). For fiscal 2020, average debt is presented net of excess cash of $374.2 million. For fiscal 2019, after-tax operating profit was adjusted for the impact of the average revaluation of deferred tax liabilities, net of repatriation tax. For fiscal 2018, after-tax operating profit was adjusted for impairment charges, pension termination charges and the impact of the revaluation of deferred tax liabilities, net of repatriation tax. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(10) Adjusted debt to EBITDAR is defined as the sum of total debt, finance lease obligations and annual rents times six; divided by net income plus interest, taxes, depreciation, amortization, rent and share-based compensation expense. For Fiscal 2020, adjusted debt is presented net of excess cash of $1.6 billion. For fiscal 2018, net income was adjusted for impairment charges and pension termination charges before tax impact. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(11) Cash flow before share repurchases and changes in debt is defined as the change in cash and cash equivalents less the change in debt plus treasury stock purchases. See Reconciliation of Non-GAAP Financial Measures in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(12) During the third quarter of fiscal 2020, the Company temporarily ceased share repurchases under the share repurchase program in response to COVID-19.

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