Operating Margin SG&A to Sales Ratio Gross Margin to Sales Ratio Our leadership team is comprised of 40 talented individuals, who deeply believe there is a better way to do business and are emotionally committed to finding it.  We’re not out to do what we have done in the past better. Instead, we’re raising the standards for exceptional performance and customer service—changing what  we do, seeking innovations and incorporating the best business practices across every functional discipline.  We are inspiring do-it-yourselfers to maintain their vehicles with memorable, upbeat advertising. It reminds folks of the importance of routine maintenance to ensure the reliability, safety and longevity of their vehicles. By broadcasting in both English and Spanish on national radio and television, we are extending our advertising reach—with an ever-present eye toward heightening demand. processing. Special attention-getting “Red Zones” feature popular new customization items such as seat covers, car mats and fun neon light kits, in addition to a wide array of filters, waxes, polishes and driving accessories. Truly, we are making our in-store experience more exciting, more innovative, more productive and more consumer- friendly than ever. AutoZone is unrivaled in customer service and trustworthy advice.  Helping customers find the best possible solutions to their automotive dilemmas is our number one priority. Whether in-store, curbside or on-line, we strive to have the best assistance, repair We continue to expand our national presence and plan to open about 195 retail stores in the upcoming year. Importantly, we have identified thousands of additional U.S. sites for potential future expansion. Our challenge is to harness the industry’s incredible poten- tial. For us, it is not a matter of following the competition. Creation of shareholder value is a matter of innovating and challenging the  status quo—moving from what is to what could be. Relentlessly creating the most exci ting information and diagnostic tools available, taking the guesswork out of repairs. Our ability to diagnose problems and provide vehicle solutions continues to strengthen our customers’ shopping expe- rience, as does our complimentary “loan-a-tool” program. Our service just keeps getting better and better. But innovation doesn’t stop there.  In our supply chain, we contin- ually adapt the best inventory management practices available, from critical line reviews to expedient stock replenishment. We’re not interested in stocking the most parts. We’re interested in selling the most parts. That means having parts ready when customers need them. To this end, we built a “hub and spoke” system that is We are working relentlessly to make AutoZone  the most exciting Zone for vehicle solutions. We expanded our “good- better-best” product selection to meet the varying needs of our diverse customer base. And, to ensure that our merchandising is the best in the industry—bar none—we are organizing our stores into vibrant Zones—the Battery Zone, the Parts Zone, the Truck Zone, the Oil Zone, and even the Check-out Zone for speedy transaction 10 Fiscal: ’99 0 ’00 ’01 ’02 ’03 18% 15 12 9 6 3 Before restructuring and impairment charges (See management discussion on reconciliations) Before restructuring and impairment charges (See management discussion on reconciliations) Fiscal: ’99 0 ’00 ’01 ’02 ’03 34% 32 33 31 30 29 Fiscal: ’99 0 ’00 ’01 ’02 ’03 48% 46 44 42 Before restructuring and impairment charges (See management discussion on reconciliations)