The company expects to return to 2.1 times adjusted debt to EBIDTAR by the end of fiscal year in August 2008.

This effort was driven by opportunistic timing on cost of borrowings, as well as an attractive stock price. Again, the firm’s expectation is to return to 2.1 times metric by the end of fiscal year. The firm purposely manages its capital structure relative to its cash flow in order to maintain the credit ratings at investment grade while optimizing the cost of capital.

For the quarter, the tax rate was 36.7%, below last year’s rate of 36.8%.

The firm expects to run approximately a 37% tax rate for fiscal 2008.

In the first quarter, the firm generated $171 million of operating cash flow.

The company repurchased $350 million of AutoZone stock as part of its ongoing stock repurchase program. The firm remains committed to its targeted adjusted debt to EBIDTAR guidepost as 2.1 times and expects to return to that metric by the end of the fiscal year.

For the first quarter, the firm reported an industry-leading return on investment capital of 23%.

This metric continues to improve over last year’s already industry leading rate.

The firm reported an inventory balance of $2 billion, up approximately 9% versus the Q1 ending balance last year.

This year’s inventory balance includes approximately $60 million in additional inventory carried under the pay-on-scan initiative last year. The firm has slowly reduced this balance in recent years. On a per-store basis, the firm reported $507,000 per store versus $503,000 in last year’s first quarter; an increase of less than 1%. Also, the company has had added additional parts coverage throughout its category line review and if it had not been for the diligent work on rationalizing certain unproductive inventory, it could not have freed up the space that it needed for its additions. This effort on parts additions will continue for the foreseeable future and will allow it to say yes to its customers even more.

Accounts payable as a percent of gross inventory finished the quarter at 90% compared to 88% last year.

Total working capital was less than $1 million versus last year’s balance of $110 million. The firm will continue to focus on minimizing working capital as this past quarter reflects. The firm is committed to continuing its ongoing focus on increasing cash flow. Net fixed assets were up 4.4% versus last year.

Capital expenditures for the quarter totaled $45 million.

This reflects the additional expenditures required to open 44 new stores this quarter, maintenance on existing stores, and work on development of the new stores for upcoming quarters. Specifically related to new store openings, the new stores are on track to achieve at least a 15% IRR and continue to see ample opportunity to open stores in the U.S. at a mid-single-digit growth rate for the foreseeable future.

The firm opened 40 new stores in the quarter for a total of 3,972 stores in 48 states, the District of Columbia, and Puerto Rico.

The goal remains to open stores more evenly throughout the fiscal year. The company also relocated three stores this past quarter and it continues to see opportunities to expand this initiative in the future.

Depreciation totaled $40 million for the quarter.

This was higher than last year due primarily to new stores and the accounting for new capital leases initiated at the beginning of Q1 last year.

AutoZone continues to be one of the few players in the industry to have investment grade debt ratings.

The senior unsecured debt rating from Standard and Poor’s is DDD+ and the firm has a commercial paper rating of A2. Moodys investor service has assigned a senior unsecured debt credit rating of DAA2 and a commercial paper rating of T2. The firm continues to be comfortable with its long-term debt ratings and leverage ratios.