AutoZone 2014 Annual Report Download - page 132

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On January 14, 2014, the Company issued $400 million in 1.300% Senior Notes due January 2017 under its shelf
registration statement filed with the SEC on April 17, 2012 (the “Shelf Registration”). The Shelf Registration
allows the Company to sell an indeterminate amount in debt securities to fund general corporate purposes,
including repaying, redeeming or repurchasing outstanding debt and for working capital, capital expenditures,
new store openings, stock repurchases and acquisitions. Proceeds from the debt issuance on January 14, 2014,
were used to repay a portion of the $500 million in 6.500% Senior Notes due January 2014. The Company used
commercial paper borrowings to repay the remainder of the 6.500% Senior Notes.
On April 29, 2013, the Company issued $500 million in 3.125% Senior Notes due July 2023 under its Shelf
Registration. Proceeds from the debt issuance on April 29, 2013, were used to repay a portion of the outstanding
commercial paper borrowings, which were used to repay the $200 million in 4.375% Senior Notes due June 2013,
and for general corporate purposes.
On November 13, 2012, the Company issued $300 million in 2.875% Senior Notes due January 2023 under its
Shelf Registration. Proceeds from the debt issuance on November 13, 2012, were used to repay a portion of the
outstanding commercial paper borrowings, which were used to repay the $300 million in 5.875% Senior Notes
due in October 2012, and for general corporate purposes.
The 5.750% Senior Notes issued in July 2009 and 7.125% Senior Notes issued during August 2008, are subject to
an interest rate adjustment if the debt ratings assigned to the Notes are downgraded. Further, all senior notes
issued since August 2008 contain a provision that repayment of the notes may be accelerated if we experience a
change in control (as defined in the agreements). Our borrowings under our other senior notes contain minimal
covenants, primarily restrictions on liens. Under our other borrowing arrangements, covenants include limitations
on total indebtedness, restrictions on liens, a minimum fixed charge coverage ratio and a change of control
provision that may require acceleration of the repayment obligations under certain circumstances. All of the
repayment obligations under our borrowing arrangements may be accelerated and come due prior to the scheduled
payment date if covenants are breached or an event of default occurs.
As of August 30, 2014, the Company was in compliance with all covenants related to its borrowing arrangements.
All of the Company’s debt is unsecured. Scheduled maturities of debt are as follows:
(in thousands)
Scheduled
Maturities
2015 ............................................................................................................................................. $ 1,393,800
2016 ............................................................................................................................................. 500,000
2017 ............................................................................................................................................. 400,000
2018 ............................................................................................................................................. 250,000
2019 ............................................................................................................................................. –
Thereafter ..................................................................................................................................... 1,800,000
$ 4,343,800
The fair value of the Company’s debt was estimated at $4.480 billion as of August 30, 2014, and $4.259 billion as
of August 31, 2013, based on the quoted market prices for the same or similar issues or on the current rates
available to the Company for debt of the same terms (Level 2). Such fair value is greater than the carrying value
of debt by $136.6 million at August 30, 2014 and $72.2 million at August 31, 2013.
10-K