AutoZone 2013 Annual Report Download - page 120

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expired on April 20, 2012 and resulted in a loss of $2.8 million, which has been deferred in Accumulated other
comprehensive loss and will be reclassified to Interest expense over the life of the underlying debt. The hedges
remained highly effective until they expired, and no ineffectiveness was recognized in earnings.
At August 31, 2013, the Company had $11.8 million recorded in Accumulated other comprehensive loss related to
net realized losses associated with terminated interest rate swap and treasury rate lock derivatives which were
designated as hedging instruments. Net losses are amortized into Interest expense over the remaining life of the
associated debt. During the fiscal year ended August 31, 2013, the Company reclassified $1.3 million of net
losses from Accumulated other comprehensive loss to Interest expense. In the fiscal year ended August 25, 2012,
the Company reclassified $1.9 million of net losses from Accumulated other comprehensive loss to Interest
expense. The Company expects to reclassify $182 thousand of net losses from Accumulated other comprehensive
loss to Interest expense over the next 12 months.
Note I – Financing
The Company’s debt consisted of the following:
(in thousands)
August 31,
2013
August 25,
2012
5.875% Senior Notes due October 2012, effective interest rate of 6.33% ........ $
–
$ 300,000
4.375% Senior Notes due June 2013, effective interest rate of 5.65% .............
–
200,000
6.500% Senior Notes due January 2014, effective interest rate of 6.63% ........ 500,000 500,000
5.750% Senior Notes due January 2015, effective interest rate of 5.89% ........ 500,000 500,000
5.500% Senior Notes due November 2015, effective interest rate of 4.86% .... 300,000 300,000
6.950% Senior Notes due June 2016, effective interest rate of 7.09% ............. 200,000 200,000
7.125% Senior Notes due August 2018, effective interest rate of 7.28% ......... 250,000 250,000
4.000% Senior Notes due November 2020, effective interest rate of 4.43% .... 500,000 500,000
3.700% Senior Notes due April 2022, effective interest rate of 3.85% ............ 500,000 500,000
2.875% Senior Notes due January 2023, effective interest rate of 3.21% ........ 300,000
–
3.125% Senior Notes due July 2023, effective interest rate of 3.26% .............. 500,000
–
Commercial paper, weighted average interest rate of 0.29% and 0.42% at
August 31, 2013 and August 25, 2012, respectively ..................................... 637,000
513,402
Unsecured, peso denominated borrowings, weighted average
interest rate of 4.57% at August 25, 2012 ..................................................
–
4,781
Total debt .......................................................................................................... 4,187,000 3,768,183
Less: Short-term borrowings ..................................................................... 173,733 49,881
Long-term debt ................................................................................................. $ 4,013,267 $ 3,718,302
As of August 31, 2013, $637 million of commercial paper borrowings and $326.3 million of the 6.500% Senior
Notes due January 2014 are classified as long-term in the accompanying Consolidated Balance Sheets as the
Company has the ability and intent to refinance on a long-term basis through available capacity in its revolving
credit facility. As of August 31, 2013, the Company had $963.3 million of availability under its $1.0 billion
revolving credit facility, expiring in September 2016 that would allow it to replace these short-term obligations
with long-term financing.
In September 2011, the Company amended and restated its $800 million revolving credit facility, which was
scheduled to expire in July 2012. The capacity under the revolving credit facility was increased to $1.0 billion.
This credit facility is available to primarily support commercial paper borrowings, letters of credit and other short-
term, unsecured bank loans. The capacity of the credit facility may be increased to $1.250 billion prior to the
maturity date at the Company’s election and subject to bank credit capacity and approval, may include up to $200
million in letters of credit, and may include up to $175 million in capital leases each fiscal year. Under the
revolving credit facility, the Company may borrow funds consisting of Eurodollar loans or base rate loans.
Interest accrues on Eurodollar loans at a defined Eurodollar rate, defined as LIBOR plus the applicable
percentage, as defined in the revolving credit facility, depending upon the Company’s senior, unsecured, (non-
credit enhanced) long-term debt rating. Interest accrues on base rate loans as defined in the credit facility. The
Company also has the option to borrow funds under the terms of a swingline loan subfacility. The revolving
credit facility expires in September 2016.
10-K