Ten-Year Review (1) Fiscal 2003 operating results include a $10 million pre-tax negative impact and the reclassification of certain vendor funding to increase operating expenses by $53 million and decrease cost of goods sold by $43 million, both as a result of the adoption of Emerging Issues Task Force Issue No. 02-16 regarding vendor funding. (2) 53 weeks. Comparable store sales, average net sales per domestic auto parts store and average net sales per store square foot for fiscal 2002 and fiscal 1996 have been adjusted to exclude net sales for the 53rd week. (3) Fiscal 2001 operating results include pretax restructuring and impairment charges of $156.8 million, or $0.84 per diluted share after tax. (4) Comparable store sales for fiscal years 1994 through 2003 are based on increases in sales for domestic auto parts stores open at least one year. All other periods are increases in sales for stores open since the beginning of the preceding fiscal year. (5) Net inventory turnover is calculated as cost of sales divided by the average of beginning and ending merchandise inventories less accounts payable. 19 18 AutoZone, Inc. 2003 Annual Report 5-Year 10-Year Compound Compound Fiscal Year Ended August Fiscal Year Ended August (in thousands, except per share data and selected operating data) Growth Growth 2003 (1) 2002 (2) 2001 (3) 2000 1999 1998 1997 1996 (2) 1995 1994 1993 Income Statement Data Net sales 11% 16% $5,457,123 $5,325,510 $4,818,185 $4,482,696 $4,116,392 $3,242,922 $2,691,440 $2,242,633 $1,808,131 $1,508,029 $1,216,793 Cost of sales, including warehouse and delivery expenses 2,942,114 2,950,123 2,804,896 2,602,386 2,384,970 1,889,847 1,559,296 1,307,638 1,057,033 886,068 731,971 Operating, selling, general and administrative expenses 1,597,212 1,604,379 1,625,598 1,368,290 1,298,327 970,768 810,793 666,061 523,440 431,219 344,060 Operating profit 19% 21% 917,797 771,008 387,691 512,020 433,095 382,307 321,351 268,934 227,658 190,742 140,762 Interest income (expense)—net (84,790) (79,860) (100,665) (76,830) (45,312) (18,204) (8,843) (1,969) 623 2,244 2,473 Income before income taxes 18% 19% 833,007 691,148 287,026 435,190 387,783 364,103 312,508 266,965 228,281 192,986 143,235 Income taxes 315,403 263,000 111,500 167,600 143,000 136,200 117,500 99,800 89,500 76,600 56,300 Net income 18% 20% $ 517,604 $ 428,148 $ 175,526 $ 267,590 $ 244,783 $ 227,903 $ 195,008 $ 167,165 $ 138,781 $ 116,386 $ 86,935 Diluted earnings per share 29% 25% $ 5.34 $ 4.00 $ 1.54 $ 2.00 $ 1.63 $ 1.48 $ 1.28 $ 1.11 $ 0.93 $ 0.78 $ 0.59 Adjusted weighted average shares for diluted  earnings per share 96,963 107,111 113,801 133,869 150,257 154,070 152,535 151,238 149,302 148,726 147,608 Balance Sheet Data Current assets $1,584,994 $1,450,128 $1,328,511 $1,186,780 $1,225,084 $1,117,090 $ 778,802 $ 613,097 $ 447,822 $ 424,402 $ 378,467 Working capital (deficit) (90,572) (83,443) 61,857 152,236 224,530 257,261 186,350 219 30,273 85,373 92,331 Total assets 3,680,466 3,477,791 3,432,512 3,333,218 3,284,767 2,748,113 1,884,017 1,498,397 1,111,778 882,102 696,547 Current liabilities 1,675,566 1,533,571 1,266,654 1,034,544 1,000,554 859,829 592,452 612,878 417,549 339,029 286,136 Debt 1,546,845 1,194,517 1,225,402 1,249,937 888,340 545,067 198,400 94,400 13,503 4,252 4,458 Stockholders’ equity 373,758 689,127 866,213 992,179 1,323,801 1,302,057 1,075,208 865,582 684,710 528,377 396,613 Selected Operating Data Number of domestic auto parts stores at  beginning of year 3,068 3,019 2,915 2,711 2,657 1,728 1,423 1,143 933 783 678 New stores 160 102 107 208 245 952 308 280 210 151 107 Replacement stores 6 15 16 30 59 12 17 31 29 20 20 Closed stores 9 53 3 4 191 23 3 — — 1 2 Net new stores 151 49 104 204 54 929 305 280 210 150 105 Number of domestic auto parts stores at end of year 3,219 3,068 3,019 2,915 2,711 2,657 1,728 1,423 1,143 933 783 Number of Mexico auto parts stores at end of year 49 39 21 13 6 — — — — — — Number of total auto parts stores at end of year 3,268 3,107 3,040 2,928 2,717 2,657 1,728 1,423 1,143 933 783 Total domestic auto parts store square footage (000s) 20,500 19,683 19,377 18,719 17,405 16,499 11,611 9,437 7,480 5,949 4,839 Average square footage per domestic auto parts store 6,368 6,416 6,418 6,422 6,420 6,210 6,719 6,632 6,544 6,376 6,180 Increase in domestic auto parts store square footage 4% 2% 4% 8% 5% 42% 23% 26% 26% 23% 20% Increase in domestic auto parts comparable store  net sales (4) 3% 9% 4% 5% 5% 3% 9% 7% 7% 10% 9% Average net sales per domestic auto parts store (000s) $ 1,689 $ 1,658 $ 1,543 $ 1,517 $ 1,465 $ 1,568 $ 1,691 $ 1,702 $ 1,742 $ 1,758 $ 1,666 Average net sales per domestic auto parts store  square foot $ 264 $ 258 $ 240 $ 236 $ 232 $ 238 $ 253 $ 258 $ 269 $ 280 $ 274 Total domestic employees 47,727 44,179 44,557 43,164 40,483 38,526 28,700 26,800 20,200 17,400 15,700 Inventory turnover 2.04x 2.25x 2.39x 2.32x 2.28x 2.26x 2.46x 2.73x 2.90x 2.98x 3.19x Net inventory turnover (5) 14.03x 11.19x 9.09x 7.52x 7.28x 6.96x 7.53x 10.72x 12.35x 13.81x 15.02x Return on average equity 97% 55% 19% 23% 19% 19% 20% 22% 23% 25% 26%