AutoZone 2010 Annual Report Download - page 105

could have a material adverse effect on our results of operations and financial condition, as well as require
additional resources to rebuild our reputation.
Business interruptions may negatively impact our store hours, operability of our computer and other
systems, availability of merchandise and otherwise have a material negative effect on our sales and our
business.
War or acts of terrorism, political unrest, hurricanes, windstorms, fires, earthquakes and other natural or other
disasters or the threat of any of them, may result in certain of our stores being closed for a period of time or
permanently or have a negative impact on our ability to obtain merchandise available for sale in our stores. Some
of our merchandise is imported from other countries. If imported goods become difficult or impossible to bring
into the United States, and if we cannot obtain such merchandise from other sources at similar costs, our sales and
profit margins may be negatively affected.
In the event that commercial transportation is curtailed or substantially delayed, our business may be adversely
impacted, as we may have difficulty shipping merchandise to our distribution centers and stores resulting in lost
sales, canceled purchase orders and/or a potential loss of customer loyalty.
We rely extensively on our computer systems to manage inventory, process transactions and summarize results.
Our systems are subject to damage or interruption from power outages, telecommunications failures, computer
viruses, security breaches and catastrophic events. If our systems are damaged or fail to function properly, we may
incur substantial costs to repair or replace them, and may experience loss of critical data and interruptions or
delays in our ability to manage inventories or process transactions, which could result in lost sales, inability to
process purchase orders and/or a potential loss of customer loyalty, which could adversely affect our results of
operations.
Healthcare reform legislation could have a negative impact on our business.
The recently enacted Patient Protection and Affordable Care Act (the “Patient Act”) as well as other healthcare
reform legislation being considered by Congress and state legislatures may have an impact on our business. While
we are currently evaluating the potential effects of the Patient Act on our business, the impact could be extensive
and will most likely increase our employee healthcare-related costs. While the significant costs of the recent
healthcare legislation enacted will occur after 2013 due to provisions of the legislation being phased in over time,
changes to our healthcare costs structure could have a significant, negative impact on our business.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The following table reflects the square footage and number of leased and owned properties for our stores as of
August 28, 2010:
No. of Stores S
q
uare Foota
g
e
Lease
d
....................................................................................................... 2,319 14,540,910
Owne
d
...................................................................................................... 2,308 15,486,198
Total .......................................................................................................... 4,627 30,027,108
We have approximately 4.0 million square feet in distribution centers servicing our stores, of which
approximately 1.3 million square feet is leased and the remainder is owned. Our distribution centers are located in
Arizona, California, Georgia, Illinois, Ohio, Pennsylvania, Tennessee, Texas and Mexico. Our primary store
support center is located in Memphis, Tennessee, and consists of approximately 260,000 square feet. We also
have two additional store support centers located in Monterrey, Mexico and Chihuahua, Mexico and own or lease
other properties that are not material in the aggregate.
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10-K