On June 26, 2008, Standard&Poor's Ratings Services lowered the corporate credit rating on Memphis, Tenn.-based AutoZone Inc. to 'BBB' from 'BBB+', following the company's announcement that it will expand its share repurchase program and increase leverage to at least 2.5x (adjusted debt/EBITDAR calculated by AutoZone using 6x annual rents). This action reflects the company's more aggressive financial policy. At the same time, we are affirming the company's 'A-2' short-term and commercial paper (CP) ratings. The outlook is stable. The rating reflects AutoZone's leading position in the stable but highly competitive retail automobile parts aftermarket, consistent operating performance, and strong profitability measures. These strengths are somewhat tempered by management's historically aggressive share repurchase activity and expectations for continued flat-to-negative
