NEW YORK (Standard&Poor's) Nov. 1, 2001--Standard&Poor's today affirmed its ratings on AutoZone Inc. and removed them from CreditWatch (see list below), where they had been placed Sept. 26, 2001. The outlook is negative. The rating affirmation is based on AutoZone's continued stable operating performance despite the weakening U.S. economy, and lease-adjusted return on permanent capital of more than 22%, which is strong for the rating. However, the negative outlook reflects an aggressive financial policy with regard to share repurchases. Over the past three years, AutoZone has repurchased about $1.2 billion of common stock, which has contributed to increased debt levels and negatively impacted certain credit protection measures. Lease-adjusted EBITDA coverage of interest has declined to about
