AutoZone 2013 Annual Report Download - page 86

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fiscal 2011. We invested $414.5 million in capital assets in fiscal 2013, compared to $378.1 million in fiscal 2012,
and $321.6 million in fiscal 2011. The increase in capital expenditures during this time was primarily attributable
to the number and types of stores opened and increased investment in our existing stores. New store openings
were 197 for fiscal 2013, 193 for fiscal 2012, and 188 for fiscal 2011. Cash flows used in the acquisition of
AutoAnything were $116.1 million during fiscal 2013. There were no acquisitions in fiscal 2012 or fiscal 2011.
We invest a portion of our assets held by our wholly owned insurance captive in marketable securities. We
purchased $44.5 million of marketable securities in fiscal 2013, $45.7 million in fiscal 2012, and $43.8 million in
fiscal 2011. We had proceeds from the sale of marketable securities of $37.9 million in fiscal 2013, $42.4 million
in fiscal 2012, and $43.1 million in fiscal 2011. Capital asset disposals provided proceeds of $9.8 million in fiscal
2013, $6.6 million in fiscal 2012, and $3.3 million in fiscal 2011.
Net cash used in financing activities was $847.0 million in fiscal 2013, $843.4 million in fiscal 2012, and $973.8
million in fiscal 2011. The net cash used in financing activities reflected purchases of treasury stock which totaled
$1.387 billion for fiscal 2013, $1.363 billion for fiscal 2012, and $1.467 billion for fiscal 2011. The treasury stock
purchases in fiscal 2013, 2012 and 2011 were primarily funded by cash flows from operations, and by increases in
debt levels. Proceeds from issuance of debt were $800 million for fiscal 2013, $500 million for fiscal 2012, and
$500 million for fiscal 2011. In fiscal 2013 and fiscal 2012, the proceeds from the issuance of debt were used for
the repayment of a portion of commercial paper borrowings and general corporate purposes, including for
working capital requirements, capital expenditures, store openings and stock repurchases. Proceeds from the
issuance of debt in fiscal 2013 were also used for the acquisition of AutoAnything. In fiscal 2013, we repaid our
$200 million Senior Notes due in June 2013 and our $300 million Senior Notes due in October 2012 using
commercial paper borrowings. There were no repayments of debt in fiscal 2012. In fiscal 2011, we used the
proceeds from the issuance of debt to repay our $199.3 million Senior Notes due in November 2010, to repay a
portion of our commercial paper borrowings and for general corporate purposes. In 2013, we received proceeds
from the issuance of commercial paper and short-term borrowings in the amount of $118.7 million. In 2012, net
payments of commercial paper and short-term borrowings were $81.3 million. In 2011, we received proceeds
from the issuance of commercial paper and short-term borrowing in the amount of $141.5 million.
During fiscal 2014, we expect to invest in our business at an increased rate as compared to fiscal 2013. Our
investments are expected to be directed primarily to our new-store development program and enhancements to
existing stores and infrastructure. The amount of our investments in our new-store program is impacted by
different factors, including such factors as whether the building and land are purchased (requiring higher
investment) or leased (generally lower investment), located in the United States, Mexico or Brazil, or located in
urban or rural areas. During fiscal 2013, fiscal 2012, and fiscal 2011, our capital expenditures have increased by
approximately 10%, 18% and 2%, respectively, as compared to the prior year. Our mix of store openings has
moved away from build-to-suit leases (lower initial capital investment) to ground leases and land purchases
(higher initial capital investment), resulting in increased capital expenditures per store over the previous three
years, and we expect this trend to continue during the fiscal year ending August 30, 2014.
In addition to the building and land costs, our new-store development program requires working capital,
predominantly for inventories. Historically, we have negotiated extended payment terms from suppliers, reducing
the working capital required and resulting in a high accounts payable to inventory ratio. We plan to continue
leveraging our inventory purchases; however, our ability to do so may be limited by our vendors’ capacity to
factor their receivables from us. Certain vendors participate in financing arrangements with financial institutions
whereby they factor their receivables from us, allowing them to receive payment on our invoices at a discounted
rate.
Depending on the timing and magnitude of our future investments (either in the form of leased or purchased
properties or acquisitions), we anticipate that we will rely primarily on internally generated funds and available
borrowing capacity to support a majority of our capital expenditures, working capital requirements and stock
repurchases. The balance may be funded through new borrowings. We anticipate that we will be able to obtain
such financing in view of our credit ratings and favorable experiences in the debt markets in the past.
Our cash balances are held in various locations around the world. Of the $142.2 million and $103.1 million of
cash and cash equivalents at August 31, 2013, and August 25, 2012, respectively, $38.2 million and $7.8 million,
respectively, were held outside of the U.S. and were generally utilized to support liquidity needs in our foreign
10-K