AutoZone 2010 Annual Report Download - page 151

Future minimum annual rental commitments under non-cancelable operating leases and capital leases were as
follows at the end of fiscal 2010:
(in thousands)
Operating
Leases
Capital
Leases
2011..................................................................................................................................... $ 196,291 $21,947
2012..................................................................................................................................... 187,085 24,013
2013..................................................................................................................................... 170,858 20,819
2014..................................................................................................................................... 151,287 16,971
2015..................................................................................................................................... 133,549 8,995
Thereafter ............................................................................................................................ 900,977 —
Total minimum payments required .................................................................................... $1,740,047 92,745
Less: Interest ....................................................................................................................... (4,465)
Present value of minimum capital lease payments............................................................ $88,280
In connection with the Company’s December 2001 sale of the TruckPro business, the Company subleased
some properties to the purchaser for an initial term of not less than 20 years. The Company’s remaining
aggregate rental obligation at August 28, 2010 of $20.5 million is included in the above table, but the
obligation is entirely offset by the sublease rental agreement.
Note N — Commitments and Contingencies
Construction commitments, primarily for new stores, totaled approximately $15.8 million at August 28, 2010.
The Company had $107.6 million in outstanding standby letters of credit and $23.7 million in surety bonds as
of August 28, 2010, 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 sheet. The standby letters of credit and surety bonds arrangements have automatic
renewal clauses.
Note O — Litigation
AutoZone, Inc. is a defendant in a lawsuit entitled “Coalition for a Level Playing Field, L.L.C., et al., v.
AutoZone, Inc. et al.,” filed in the U.S. District Court for the Southern District of New York in October 2004.
The case was filed by more than 200 plaintiffs, which are principally automotive aftermarket warehouse
distributors and jobbers, against a number of defendants, including automotive aftermarket retailers and
aftermarket automotive parts manufacturers. In the amended complaint, the plaintiffs allege, inter alia, that
some or all of the automotive aftermarket retailer defendants have knowingly received, in violation of the
Robinson-Patman Act (the “Act”), from various of the manufacturer defendants benefits such as volume
discounts, rebates, early buy allowances and other allowances, fees, inventory without payment, sham
advertising and promotional payments, a share in the manufacturers’ profits, benefits of pay on scan purchases,
implementation of radio frequency identification technology, and excessive payments for services purportedly
performed for the manufacturers. Additionally, a subset of plaintiffs alleges a claim of fraud against the
automotive aftermarket retailer defendants based on discovery issues in a prior litigation involving similar
claims under the Act. In the prior litigation, the discovery dispute, as well as the underlying claims, was
decided in favor of AutoZone and the other automotive aftermarket retailer defendants who proceeded to trial,
pursuant to a unanimous jury verdict which was affirmed by the Second Circuit Court of Appeals. In the
current litigation, plaintiffs seek an unspecified amount of damages (including statutory trebling), attorneys’
fees, and a permanent injunction prohibiting the aftermarket retailer defendants from inducing and/or
knowingly receiving discriminatory prices from any of the aftermarket manufacturer defendants and from
opening up any further stores to compete with plaintiffs as long as defendants allegedly continue to violate the
Act.
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