AutoZone 2004 Annual Report Download - page 26

27’04฀Annual฀Report
Reconciliation฀ of฀ Non-GAAP฀ Financial฀ Measure:฀ After-Tax฀ Return฀ on฀ Invested฀ Capital:฀ The฀ following฀ table฀ reconciles฀ the฀ percentages฀ of฀
after-tax฀return฀on฀invested฀capital,฀or฀“ROIC,”฀both฀including฀and฀excluding฀the฀fiscal฀2001฀restructuring฀and฀impairment฀charges,฀to฀net฀
income.฀After-tax฀return฀on฀invested฀capital฀is฀calculated฀as฀after-tax฀operating฀profit฀(excluding฀rent)฀divided฀by฀average฀invested฀capital฀
(which฀includes฀a฀factor฀to฀capitalize฀operating฀leases).฀The฀ROIC฀percentages฀are฀presented฀in฀the฀“Selected฀Financial฀Data.”
Fiscal฀Year฀Ended฀August
(in฀thousands,฀except฀per฀share฀and฀percentage฀data) 2004 ฀ 2003 ฀ 2002 ฀ 2001 ฀ 2000
Net฀income $฀ 566,202 $฀ 517,604 $฀ 428,148 $฀ 175,526 $฀ 267,590
Adjustments:
After-tax฀interest 58,003 52,686 49,471 61,560 47,241
After-tax฀rent 73,086 ฀ 68,764 ฀ 61,348 ฀ 61,396 ฀ 58,853
After-tax฀return 697,291 639,054 538,967 298,482 373,684
After-tax฀restructuring฀and฀impairment฀charges —฀ — ฀ — ฀ 95,822 ฀ —
After-tax฀return,฀excluding฀restructuring฀and฀impairment฀charges $฀ 697,291 ฀ $฀ 639,054 ฀ $฀ 538,967 ฀ $฀ 394,304 ฀ $฀ 373,684
Average฀debt(1) $1,787,307 $1,484,987 $1,329,077 $1,445,899 $1,182,055
Average฀equity(2) 292,802 580,176 802,289 879,912 1,149,104
Rent฀x฀6(3) 701,621 ฀ 663,990 ฀ 594,192 ฀ 602,382 ฀ 574,290
Pre-tax฀invested฀capital 2,781,730 2,729,153 2,725,558 2,928,193 2,905,449
Average฀equity,฀excluding฀restructuring฀and฀impairment฀charges(4) —฀ — ฀ — ฀ 6,844 ฀ —
Pre-tax฀invested฀capital,฀excluding฀restructuring฀and฀impairment฀charges $2,781,730 ฀ $2,729,153 ฀ $2,725,558 ฀ $2,935,037 ฀ $2,905,449
ROIC 25.1% 23.4% 19.8% ฀10.1% 12.9%
ROIC,฀before฀restructuring฀and฀impairment฀charges 25.1% 23.4% 19.8% 13.4%฀
(5) 12.9%
(1)฀ ฀Average฀debt฀is฀equal฀to฀the฀average฀of฀our฀long-term฀debt฀measured฀at฀the฀end฀of฀the฀prior฀fiscal฀year฀and฀each฀of฀the฀13฀fiscal฀periods฀in฀the฀current฀fiscal฀year.฀
Long-term฀debt฀(in฀thousands)฀was฀$888,340฀at฀August฀28,฀1999.
(2)฀ ฀Average฀equity฀is฀equal฀to฀the฀average฀of฀our฀stockholders’฀equity฀measured฀at฀the฀end฀of฀the฀prior฀fiscal฀year฀and฀each฀of฀the฀13฀fiscal฀periods฀of฀the฀current฀fiscal฀
year.฀Stockholders’฀equity฀(in฀thousands)฀was฀$1,323,801฀at฀August฀28,฀1999.
(3)฀ ฀Rent฀is฀multiplied฀by฀a฀factor฀of฀six฀to฀capitalize฀operating฀leases฀in฀the฀determination฀of฀pre-tax฀invested฀capital.
(4)฀ ฀Average฀equity฀at฀August฀25,฀2001฀increased฀by฀$6.8฀million฀as฀a฀result฀of฀excluding฀restructuring฀and฀impairment฀charges.
(5)฀ ฀ROIC฀excluding฀nonrecurring฀charges฀was฀presented฀as฀14.3%฀in฀our฀Form฀10-K฀for฀the฀fiscal฀year฀ended฀August฀31,฀2002,฀but฀has฀been฀revised฀to฀reflect฀a฀rolling฀
13-period฀average฀of฀debt฀and฀equity฀to฀conform฀with฀our฀current฀methodology฀for฀calculating฀ROIC.
Reconciliation฀of฀Non-GAAP฀Financial฀Measure:฀Cash฀Flow฀Before฀Share฀Repurchases฀and฀Changes฀in฀Debt:฀ The฀following฀table฀reconciles฀
net฀increase฀(decrease)฀in฀cash฀and฀cash฀equivalents฀to฀cash฀flow฀before฀share฀repurchases฀and฀changes฀in฀debt,฀which฀is฀presented฀in฀the฀
“Selected฀Financial฀Data.”
Fiscal฀Year฀Ended฀August
(in฀thousands) 2004 ฀ 2003 ฀ 2002 ฀ 2001 ฀ 2000
Net฀increase฀(decrease)฀in฀cash฀and฀cash฀equivalents $฀ (16,250) $฀ 22,796 $฀ (3,709) $฀ 8,680 $฀ (6,299)
Less:฀Increase฀(decrease)฀in฀debt 322,405 352,328 (30,885) (24,535) 361,597
Less:฀Share฀repurchases (848,102)฀ (891,095)฀ (698,983)฀ (366,097)฀ (639,925)
Cash฀flow฀before฀share฀repurchases฀and฀changes฀in฀debt $฀509,447 ฀ $฀561,563 ฀ $฀726,159 ฀ $฀399,312 ฀ $฀272,029
Reconciliation฀of฀Non-GAAP฀Financial฀Measure:฀Fiscal฀2002฀Results฀Excluding฀Impact฀of฀53rd฀Week:฀ The฀following฀table฀summarizes฀the฀
favorable฀impact฀of฀the฀additional฀week฀of฀the฀53฀week฀fiscal฀year฀ended฀August฀31,฀2002.
(in฀thousands,฀except฀per฀share฀and฀percentage฀data)
Fiscal฀2002฀
Results฀of฀Operations ฀
Percent฀
of฀Revenue ฀
Unaudited฀
Results฀of฀
Operations฀
for฀53rd฀Week ฀
Fiscal฀2002฀
Results฀of฀Operations฀
Excluding฀53rd฀Week ฀
Percent฀
of฀Revenue
Net฀sales $5,325,510 100.0% $(109,079) $5,216,431 100.0%
Cost฀of฀sales 2,950,123 ฀ 55.4% ฀ (58,688) ฀ 2,891,435 ฀ 55.4%
Gross฀profit 2,375,387 44.6% (50,391) 2,324,996 44.6%
Operating฀expenses 1,604,379 ฀ 30.1% ฀ (20,911) ฀ 1,583,468 ฀ 30.4%
Operating฀profit 771,008 14.5% (29,480) 741,528 14.2%
Interest฀expense,฀net 79,860 ฀ 1.5% ฀ — ฀ 79,860 ฀ 1.5%
Income฀before฀taxes 691,148 13.0% (29,480) 661,668 12.7%
Income฀taxes 263,000 ฀ 5.0% ฀ (11,210) ฀ 251,790 ฀ 4.8%
Net฀income $฀ ฀428,148 ฀ 8.0% ฀ $฀ (18,270) ฀ $฀ ฀409,878 ฀ 7.9%
Diluted฀earnings฀per฀share $฀ ฀฀ ฀฀ ฀4.00 ฀ ฀ $฀ ฀ ฀ (0.17) ฀ $฀ ฀฀ ฀฀ ฀3.83 ฀