SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended November 17, 2007, or
 
o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _______ to ________.

Commission file number 1-10714

AUTOZONE, INC.
(Exact name of registrant as specified in its charter)

Nevada
 
62-1482048
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)

123 South Front Street
Memphis, Tennessee 38103
(Address of principal executive offices) (Zip Code)

(901) 495-6500
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   x
Accelerated filer   o
Non-accelerated filer   o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $.01 Par Value - 63,178,650 shares outstanding as of December 6, 2007.


EXPLANATORY NOTE

This amendment on Form 10-Q/A of AutoZone, Inc. is being filed to revise Part I, Item 1 - Financial Statements, of the Quarterly Report on Form 10-Q for the quarter ended November 17, 2007 that was filed on December 14, 2007 (the “Report”). Specifically, this Form 10-Q/A corrects a printer error in Stockholders’ equity for the previous fiscal year ended August 25, 2007 as shown in the Condensed Consolidated Balance Sheets contained in the Report. This amendment does not reflect events occurring after the filing of the Report and, other than the correction in Stockholders’ equity described above, does not modify or update the disclosures in the original Report in any way.

2

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
4
Item 1. Financial Statements
4
CONDENSED CONSOLIDATED BALANCE SHEETS
4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
10
SIGNATURES
11
EXHIBIT INDEX
12
EX.15.1 LETTER FROM ERNST & YOUNG LLP
  
EX.31.1 SECTION 302 CERTIFICATION OF PEO
  
EX.31.2 SECTION 302 CERTIFICATION OF PFO
  
EX.32.1 SECTION 906 CERTIFICATION OF PEO
  
EX.32.2 SECTION 906 CERTIFICATION OF PFO
  

3

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.

AUTOZONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)

 
  
November 17,
2007
  
August 25,
2007
  
ASSETS
          
Current assets
              
Cash and cash equivalents
  
$
79,813
  
$
86,654
  
Accounts receivable
    
53,900
    
59,876
  
Merchandise inventories
    
2,051,524
    
2,007,430
  
Other current assets
    
134,500
    
116,495
  
Total current assets
    
2,319,737
    
2,270,455
  
 
              
Property and equipment
              
Property and equipment
    
3,440,810
    
3,395,545
  
Less: Accumulated depreciation and amortization 
    
1,252,275
    
1,217,703
  
     
2,188,535
    
2,177,842
  
Other assets
              
Goodwill, net of accumulated amortization
    
302,645
    
302,645
  
Deferred income taxes
    
36,280
      21,331  
Other long-term assets 
    
27,020
    
32,436
  
     
365,945
    
356,412
  
   
$
4,874,217
  
$
4,804,709
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
              
Current liabilities
              
Accounts payable
  
$
1,844,940
  
$
1,870,668
  
Accrued expenses and other
    
326,129
    
307,633
  
Income taxes payable 
    
78,368
    
25,442
  
Deferred income taxes
    
69,833
    
82,152
  
Total current liabilities 
    
2,319,270
    
2,285,895
  
               
Debt
    
2,161,070
    
1,935,618
  
Other liabilities
    
222,824
    
179,996
  
Stockholders’ equity  
    
171,053
    
403,200
  
   
$
4,874,217
  
$
4,804,709
  

See Notes to Condensed Consolidated Financial Statements

4

AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)

   
Twelve Weeks Ended
  
   
November 17,
2007
  
November 18,
2006
  
 
          
Net sales
  
$
1,455,655
  
$
1,393,069
  
Cost of sales, including warehouse and delivery expenses
    
729,207
    
707,774
  
Operating, selling, general and administrative expenses
    
489,073
    
462,299
  
Operating profit
    
237,375
    
222,996
  
Interest expense, net 
    
28,062
    
27,093
  
Income before income taxes
    
209,313
    
195,903
  
Income taxes 
    
76,797
    
72,014
  
Net income 
  
$
132,516
  
$
123,889
  
               
Weighted average shares for basic earnings per share
    
64,855
    
71,082
  
Effect of dilutive stock equivalents 
    
589
    
731
  
Adjusted weighted average shares for diluted earnings per share
   
65,444
    
71,813
  
               
Basic earnings per share 
  
$
2.04
  
$
1.74
  
Diluted earnings per share 
  
$
2.02
  
$
1.73
  
               

See Notes to Condensed Consolidated Financial Statements

5

AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

   
Twelve Weeks Ended
  
 
  
November 17,
2007
  
November 18,
2006
  
Cash flows from operating activities
              
Net income
  
$
132,516
  
$
123,889
  
Adjustments to reconcile net income to net cash provided by operating activities
              
Depreciation and amortization of property and equipment
    
39,692
    
35,554
  
Amortization of debt origination fees
    
415
    
409
  
Income tax benefit from exercise of options
    
(1,795
)
  
(5,798
)
Deferred income taxes
    
(379
)
  
(802
)
Share-based compensation expense
    
4,182
    
4,302
  
Changes in operating assets and liabilities
              
Accounts receivable
    
5,976
    
6,531
  
Merchandise inventories
    
(44,094
)
  
(36,698
)
Accounts payable and accrued expenses
    
(23,074
)
  
(50,123
)
Income taxes payable
    
54,721
    
39,884
  
Other, net
    
2,885
    
(5,185
)
Net cash provided by operating activities
    
171,045
    
111,963
  
               
Cash flows from investing activities
              
Capital expenditures
    
(44,887
)
  
(52,198
)
Purchase of marketable securities
    
(20,448
)
  
(27,770
)
Proceeds from sale of marketable securities
    
5,282
    
8,790
  
Disposal of capital assets and other, net
    
392
    
282
  
Net cash used in investing activities
    
(59,661
)
  
(70,896
)
               
Cash flows from financing activities
              
Net proceeds from commercial paper
    
264,370
    
6,200
  
Repayment of debt
    
(38,918
)
  
(3,686
)
Net proceeds from sale of common stock
    
8,766
    
26,109
  
Purchase of treasury stock
    
(349,990
)
  
(90,767
)
Income tax benefit from exercise of stock options
   
1,795
 
  
5,798
 
Payment of capital lease obligations 
      (3,874
) 
  
(2,270
) 
Other, net
    
(374
)
  
(650
)
Net cash used in financing activities
    
(118,225
)
  
(59,266
)
Net decrease in cash and cash equivalents
    
(6,841
)
  
(18,199
)
Cash and cash equivalents at beginning of period
    
86,654
    
91,558
  
Cash and cash equivalents at end of period
  
$
79,813
  
$
73,359
  

See Notes to Condensed Consolidated Financial Statements

6

AUTOZONE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note A- Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Certain prior year amounts have been reclassified to conform to current year presentations. For further information, refer to the consolidated financial statements and footnotes included in the 2007 Annual Report to Shareholders for AutoZone, Inc. (“AutoZone” or the “Company”) for the year ended August 25, 2007.

Operating results for the twelve weeks ended November 17, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending August 30, 2008. Each of the first three quarters of AutoZone’s fiscal year consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. The fourth quarter for fiscal 2007 had 16 weeks and for fiscal 2008 has 17 weeks. Additionally, the Company’s business is somewhat seasonal in nature, with the highest sales generally occurring in the spring and summer months of March through August and the lowest sales generally occurring in the winter months of December through February.

Note B- Share-Based Payments

Share-based compensation transactions are accounted for in accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123(R) “Share-Based Payment.” AutoZone recognizes compensation expense for share-based payments based on the fair value of the awards at the grant date. Share-based payments include stock option grants and the discount on shares sold to employees under various share purchase plans.

Total share-based expense (a component of operating, selling, general and administrative expenses) was $4.2 million for the twelve week period ended November 17, 2007 and was $4.3 million for the comparable prior year period.

AutoZone grants options to purchase common stock to some of its employees and directors under various plans at prices equal to the market value of the stock on the dates the options are granted. Options have a term of 10 years or 10 years and one day from grant date. Director options generally vest three years from the grant date. Employee options generally vest in equal annual installments on the first, second, third and fourth anniversaries of the grant date. Employees and directors generally have 30 days after the employment relationship ends, or one year after death, to exercise all vested options. The fair value of each option grant is separately estimated for each vesting date. The fair value of each option is amortized into compensation expense on a straight-line basis between the grant date for the award and each vesting date. The Company has estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes-Merton multiple-option pricing valuation model. The application of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense. The weighted average key assumptions used in determining the fair value of options granted in the twelve week period ended November 17, 2007 are as follows:

Expected price volatility
    
24.4
%
Risk-free interest rate
    
4.1
%
Weighted average expected lives in years
    
4.0
  
Forfeiture rate
    
10.0
%
Dividend yield
    
0.0
%

The Company generally issues new shares when options are exercised. A summary of stock option activity since our most recent fiscal year end is as follows:
 
 
 
  
  
 Options
 
Weighted Average
 Exercise Price
  
Outstanding August 25, 2007
    
2,956,765
  
$
79.24
  
Granted
    
619,240
    
115.38
  
Exercised
    
(115,213
)
  
78.43
  
Canceled
    
(22,044
)
  
82.90
  
Outstanding November 17, 2007
    
3,438,748
  
$
85.75
  

There have been no modifications to the Company’s share-based compensation plans during the twelve week period ended November 17, 2007.

7

Note C- Income Taxes

AutoZone adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) on August 26, 2007. FIN 48 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The adoption of FIN 48 resulted in a charge to the beginning balance of retained earnings of $26.9 million at the date of adoption. Including this cumulative effect amount, total unrecognized tax benefits upon adoption were $49.2 million. Of this total, $23.8 million represents unrecognized tax benefits that, if recognized, would reduce the Company’s effective tax rate.

The major jurisdictions where the Company files income tax returns are the United States and Mexico. Generally, returns filed for tax years 2003 through 2007 remain open and subject to examination by the relevant tax authorities. The Company is typically engaged in various tax examinations at any given time, both by U. S. federal and state taxing jurisdictions and Mexican tax authorities. As a result of tax audit closings, settlements, and the expiration of statutes to examine such returns in various jurisdictions over the next 12 months, the Company estimates that the amount of unrecognized tax benefits could be reduced by approximately $30.5 million.

The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. Upon adoption of FIN 48, the Company had approximately $16.3 million of such accrued interest and penalties included in accrued liabilities associated with unrecognized tax benefits.

Note D- Inventories

Inventories are stated at the lower of cost or market using the last-in, first-out (“LIFO”) method. Included in inventory are related purchasing, storage, delivery and handling costs. Due to price deflation on the Company’s merchandise purchases, the Company’s inventory balances are effectively maintained under the first-in first-out method. The Company’s policy is not to write up inventory in excess of replacement cost, resulting in cost of sales being reflected at the higher amount. The cumulative balance of this unrecorded adjustment, which is reduced upon experiencing price inflation on our merchandise purchases, was $226.4 million at November 17, 2007, and $227.9 million at August 25, 2007.

Note E- Pension Plans

The (income) cost components of net periodic benefit income related to our pension plans for all periods presented are as follows:

   
Twelve Weeks Ended
  
(in thousands)
  
November 17,
 2007
  
November 18,
2006
 
 
          
Interest cost
  
$
2,299
  
$
2,214
  
Expected return on plan assets
    
(3,008
)
  
(2,387
)
Amortization of prior service cost
    
23
    
(12
)
Amortization of net loss
    
22
    
173
  
Net periodic benefit income
  
$
(664
)
$
(12
)

The Company makes contributions in amounts at least equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974. During the twelve week period ended November 17, 2007, the Company made $1.3 million in contributions to the plan and expects to fund approximately $2 million during the remainder of this fiscal year.

8

Note F- Long-Term Debt

The Company’s long-term debt consisted of the following:
 
 
(in thousands)
  
November 17,
2007
  
August 25,
2007
  
           
Bank Term Loan due December 2009, effective interest rate of 4.55%
  
$
300,000
  
$
300,000
  
5.875% Senior Notes due October 2012, effective interest rate of 6.33%
    
300,000
    
300,000
  
5.5% Senior Notes due November 2015, effective interest rate of 4.86%
    
300,000
    
300,000
  
4.75% Senior Notes due November 2010, effective interest rate of 4.17%
    
200,000
    
200,000
  
4.375% Senior Notes due June 2013, effective interest rate of 5.65%
    
200,000
    
200,000
  
6.95% Senior Notes due June 2016, effective interest rate of 7.09% 
    
200,000
    
200,000
  
6.5% Senior Notes due July 2008 
    
190,000
    
190,000
  
Commercial paper, weighted average interest rate of 5.1% at  November 17, 2007, and 6.1% at August 25, 2007  
    
471,070
    
206,700
  
Other 
    
-
   
38,918
  
   
$
2,161,070
  
$
1,935,618
  

Balances maturing in the next twelve months are classified as long-term in the accompanying condensed consolidated balance sheets as the Company has the ability and intent to refinance them on a long-term basis.
 
Note G- Stock Repurchase Program

On June 6, 2007, the Board of Directors increased the Company’s cumulative share repurchase authorization limit from $5.4 billion to $5.9 billion. From January 1, 1998 to November 17, 2007, the Company has repurchased a total of 102.2 million shares at an aggregate cost of $5.792 billion; including 2,897,744 shares of its common stock at an aggregate cost of $350.0 million during the twelve week period ended November 17, 2007. Considering cumulative repurchases as of November 17, 2007, the Company has $108.3 million remaining under this authorization to repurchase its common stock.

Note H- Comprehensive Income
 
Comprehensive income includes foreign currency translation adjustments; the impact from certain derivative financial instruments designated and effective as cash flow hedges, including changes in fair value, as applicable, and the reclassification of gains and/or losses from accumulated other comprehensive loss to net income to offset the earnings impact of the underlying items being hedged; and changes in the fair value of certain investments classified as available for sale. Comprehensive income for all periods presented is as follows:
 
   
Twelve Weeks Ended
  
 
(in thousands)
  
November 17,
2007
  
November 18,
2006
  
 
          
Net income, as reported
  
$
132,516
  
$
123,889
  
Foreign currency translation adjustment
    
812
    
630
  
Net impact from derivative instruments
    
(3,542
)
  
(1,715
)
Unrealized gains from marketable securities
    
246
    
64
  
Comprehensive income
  
$
130,032
  
$
122,868
  
 

9

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
AutoZone, Inc.

We have reviewed the condensed consolidated balance sheet of AutoZone, Inc. as of November 17, 2007, the related condensed consolidated statements of income for the twelve week periods ended November 17, 2007 and November 18, 2006, and the condensed consolidated statements of cash flows for the twelve week periods ended November 17, 2007 and November 18, 2006. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of AutoZone, Inc. as of August 25, 2007, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the year then ended, not presented herein, and, in our report dated October 19, 2007, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of August 25, 2007 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Memphis, Tennessee
December 11, 2007

10

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


AUTOZONE, INC.
 
By:
/s/ WILLIAM T. GILES
William T. Giles
Chief Financial Officer, Executive Vice President,
Finance, Information Technology and
Store Development
(Principal Financial Officer)
   
By:
/s/ CHARLIE PLEAS, III
Charlie Pleas, III
Senior Vice President, Controller
(Principal Accounting Officer)

Dated: January 4, 2008

11

EXHIBIT INDEX

The following exhibits are filed as part of this report:

Letter Regarding Unaudited Interim Financial Statements.
   
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

12