AutoZoneInformation2018.xlsx

Cover Page

Cover Page – USD ($) 12 Months Ended

Aug. 31, 2019 Oct. 21, 2019 Feb. 09, 2019

Cover [Abstract]

Document Type 10-K

Amendment Flag false

Document Period End Date Aug. 31,
2019

Document Fiscal Year Focus 2019

Document Fiscal Period Focus FY

Entity Registrant Name AUTOZONE INC

Entity Central Index Key 0000866787

Current Fiscal Year End Date –08-31

Entity Well-known Seasoned Issuer Yes

Entity Voluntary Filers No

Entity Current Reporting Status Yes

Entity Filer Category Large Accelerated Filer

Entity Public Float $ 21,723,299,587

Trading Symbol AZO

Entity Interactive Data Current Yes

Entity Shell Company false

Entity Small Business false

Entity Emerging Growth Company false

Title of 12(b) Security Common Stock

Security Exchange Name NYSE

Entity Address, State or Province TN

Entity Common Stock, Shares Outstanding 23,827,496

Consolidated Statements of Inco

Consolidated Statements of Income – USD ($) shares in Thousands, $ in Thousands 12 Months Ended

Aug. 31, 2019 Aug. 25, 2018 Aug. 26, 2017

Income Statement [Abstract]

Net sales $ 11,863,743 $ 11,221,077 $ 10,888,676

Cost of sales, including warehouse and delivery expenses 5,498,742 5,247,331 5,149,056

Gross profit 6,365,001 5,973,746 5,739,620

Operating, selling, general and administrative expenses 4,148,864 4,162,890 3,659,551

Operating profit 2,216,137 1,810,856 2,080,069

Interest expense, net 184,804 174,527 154,580

Income before income taxes 2,031,333 1,636,329 1,925,489

Income tax expense 414,112 298,793 644,620

Net income $ 1,617,221 $ 1,337,536 $ 1,280,869

Weighted average shares for basic earnings per share 24,966 26,970 28,430

Effect of dilutive stock equivalents 532 454 635

Weighted average shares for diluted earnings per share 25,498 27,424 29,065

Basic earnings per share $ 64.78 $ 49.59 $ 45.05

Diluted earnings per share $ 63.43 $ 48.77 $ 44.07

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income – USD ($) $ in Thousands 12 Months Ended

Aug. 31, 2019 Aug. 25, 2018 Aug. 26, 2017

Statement of Comprehensive Income [Abstract]

Net income $ 1,617,221 $ 1,337,536 $ 1,280,869

Other comprehensive income (loss):

Pension liability adjustments, net of taxes [1],[2] 72,376 16,514

Foreign currency translation adjustments (36,699) (53,085) 35,198

Unrealized gains (losses) on marketable debt securities, net of taxes [3] 1,464 (862) (131)

Net derivative activity, net of taxes [4] 1,718 323 1,391

Total other comprehensive (loss) income (33,517) 18,752 52,972

Comprehensive income $ 1,583,704 $ 1,356,288 $ 1,333,841

[1] On December 19, 2017, the Board approved a resolution to terminate both of the Company’s pension plans, effective March 15, 2018. During the fourth quarter of 2018, the Company completed the termination and no longer has any remaining defined benefit pension obligation.

[2] Pension liability adjustments are presented net of taxes of $46,523 in 2018, which includes $13,122 related to the adoption of ASU 2018-02—Income Statement—Reporting Comprehensive Income: Reclassification of Certain Tax effects from Accumulated Other Comprehensive Income (ASU 2018-02), and $10,542 in 2017.

[3] Unrealized gains on marketable debt securities are presented net of taxes of $389 in 2019. Unrealized losses on marketable debt securities are presented net of taxes of $234 in 2018, and $69 in 2017.

[4] Net derivative activities are presented net of taxes of $530 in 2019, $1,882 in 2018, which includes $1,367 related to the adoption of ASU 2018-02, and $814 in 2017

Consolidated Statements of Co_2

Consolidated Statements of Comprehensive Income (Parenthetical) – USD ($) $ in Thousands 12 Months Ended

Aug. 31, 2019 Aug. 25, 2018 Aug. 26, 2017

Pension liability adjustments, taxes $ 46,523 $ 10,542

Unrealized gains (losses) on marketable debt securities, net of taxes $ 389 (234) (69)

Net derivative activities, taxes $ 530 1,882 $ 814

Accounting Standards Update 2018-02 [Member]

Pension liability adjustments, taxes 13,122

Net derivative activities, taxes $ 1,367

Consolidated Balance Sheets

Consolidated Balance Sheets – USD ($) $ in Thousands Aug. 31, 2019 Aug. 25, 2018

Current assets:

Cash and cash equivalents $ 176,300 $ 217,824

Accounts receivable 308,995 258,136

Merchandise inventories 4,319,113 3,943,670

Other current assets 224,277 216,239

Total current assets 5,028,685 4,635,869

Property and equipment:

Land 1,147,709 1,107,092

Buildings and improvements 3,895,559 3,698,010

Equipment 1,991,042 1,841,330

Leasehold improvements 552,018 504,656

Construction in progress 126,868 140,535

Property and equipment 7,713,196 7,291,623

Less: Accumulated depreciation and amortization 3,314,445 3,073,223

Property and equipment, net 4,398,751 4,218,400

Goodwill 302,645 302,645

Deferred income taxes 26,861 34,620

Other long-term assets 138,971 155,446

Other long-term assets, total 468,477 492,711

Assets 9,895,913 9,346,980

Current liabilities:

Accounts payable 4,864,912 4,409,372

Accrued expenses and other 621,932 606,894

Income taxes payable 25,297 12,415

Total current liabilities 5,512,141 5,028,681

Long-term debt 5,206,344 5,005,930

Deferred income taxes 311,980 285,204

Other long-term liabilities 579,299 547,520

Commitments and contingencies

Stockholders’ deficit:

Preferred stock, authorized 1,000 shares; no shares issued

Common stock, par value $.01 per share, authorized 200,000 shares; 25,445 shares issued and 24,038 shares outstanding in 2019 and 27,530 shares issued and 25,742 shares outstanding in 2018 254 275

Additional paid-in capital 1,264,448 1,155,426

Retained deficit (1,305,347) (1,208,824)

Accumulated other comprehensive loss (269,322) (235,805)

Treasury stock, at cost (1,403,884) (1,231,427)

Total stockholders’ deficit (1,713,851) (1,520,355)

Liabilities and Stockholders’ Deficit $ 9,895,913 $ 9,346,980

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) – $ / shares Aug. 31, 2019 Aug. 25, 2018

Common Stock [Member]

Common stock, par value $ 0.01 $ 0.01

Common stock, shares authorized 200,000,000 200,000,000

Common stock, shares issued 25,445,000 27,530,000

Common stock, shares outstanding 24,038,000 25,742,000

Preferred Stock [Member]

Preferred stock, shares authorized 1,000,000 1,000,000

Preferred stock, shares issued 0 0

Consolidated Statements of Cash

Consolidated Statements of Cash Flows – USD ($) $ in Thousands 12 Months Ended

Aug. 31, 2019 Aug. 25, 2018 Aug. 26, 2017

Cash flows from operating activities:

Net income $ 1,617,221 $ 1,337,536 $ 1,280,869

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property and equipment and intangibles 369,957 345,084 323,051

Amortization of debt origination fees 8,162 8,393 8,369

Deferred income taxes 35,051 (124,261) 74,902

Share-based compensation expense 43,255 43,674 38,244

Pension plan contributions (11,596) (17,761)

Pension termination charges (refund) (6,796) 130,263

Asset impairment 193,162

Changes in operating assets and liabilities:

Accounts receivable (48,512) 7,534 7,795

Merchandise inventories (394,147) (188,782) (236,807)

Accounts payable and accrued expenses 464,176 319,609 82,614

Income taxes payable (10,489) (6,438) (3,659)

Other, net 50,635 26,114 12,995

Net cash provided by operating activities 2,128,513 2,080,292 1,570,612

Cash flows from investing activities:

Capital expenditures (496,050) (521,788) (553,832)

Proceeds from sale of assets 35,279

Purchase of marketable debt securities (55,538) (104,536) (85,711)

Proceeds from sale of marketable debt securities 53,140 69,644 82,993

Proceeds (payments) from disposal of capital assets and other, net 6,602 (459) 2,951

Net cash used in investing activities (491,846) (521,860) (553,599)

Cash flows from financing activities:

Net (payments of) proceeds from commercial paper (295,300) 170,200 (42,400)

Proceeds from issuance of debt 750,000 600,000

Repayment of debt (250,000) (250,000) (400,000)

Net proceeds from sale of common stock 188,819 89,715 54,686

Purchase of treasury stock (2,004,896) (1,592,013) (1,071,649)

Payments of capital lease obligations (53,307) (49,004) (47,604)

Other, net (9,404) (1,052) (7,362)

Net cash used in financing activities (1,674,088) (1,632,154) (914,329)

Effect of exchange rate changes on cash (4,103) (1,724) 852

Net (decrease) increase in cash and cash equivalents (41,524) (75,446) 103,536

Cash and cash equivalents at beginning of year 217,824 293,270 189,734

Cash and cash equivalents at end of year 176,300 217,824 293,270

Supplemental cash flow information:

Interest paid, net of interest cost capitalized 153,371 163,965 135,331

Income taxes paid 383,871 427,161 579,925

Assets acquired through capital lease $ 147,699 $ 98,782 $ 84,011

Consolidated Statements of Stoc

Consolidated Statements of Stockholders’ Deficit – USD ($) shares in Thousands, $ in Thousands Total Common Stock [Member] Additional Paid-In Capital [Member] Retained Deficit [Member] Accumulated Other Comprehensive Loss [Member] Treasury Stock [Member]

Balance at Aug. 27, 2016 $ (1,787,538) $ 303 $ 1,054,647 $ (1,602,186) $ (307,529) $ (932,773)

Balance, Shares at Aug. 27, 2016 30,329

Net income 1,280,869 1,280,869

Total other comprehensive income (loss) 52,972 52,972

Purchase of treasury stock (1,071,649) (1,071,649)

Retirement of treasury shares $ (18) (64,943) (1,321,070) 1,386,031

Retirement of treasury shares, shares (1,804)

Issuance of common stock under stock options and stock purchase plans 54,686 $ 2 54,684

Issuance of common stock under stock options and stock purchase plans, Shares 210

Share-based compensation expense 42,283 42,283

Balance at Aug. 26, 2017 (1,428,377) $ 287 1,086,671 (1,642,387) (254,557) (618,391)

Balance, shares at Aug. 26, 2017 28,735

Net income 1,337,536 1,337,536

Total other comprehensive income (loss) 18,752 18,752

Purchase of treasury stock (1,592,013) (1,592,013)

Retirement of treasury shares $ (15) (60,500) (918,462) 978,977

Retirement of treasury shares, shares (1,512)

Issuance of common stock under stock options and stock purchase plans 89,715 $ 3 89,712

Issuance of common stock under stock options and stock purchase plans, Shares 307

Adoption of ASU 2018-02 14,489 14,489

Share-based compensation expense 39,543 39,543

Balance at Aug. 25, 2018 (1,520,355) $ 275 1,155,426 (1,208,824) (235,805) (1,231,427)

Balance, shares at Aug. 25, 2018 27,530

Cumulative effect of adoption of ASU 2014-09 at Aug. 25, 2018 (6,773) (6,773)

Balance at August 25, 2018, as adjusted at Aug. 25, 2018 (1,527,128) $ 275 1,155,426 (1,215,597) (235,805) (1,231,427)

Balance at August 25, 2018, as adjusted, shares at Aug. 25, 2018 27,530

Net income 1,617,221 1,617,221

Total other comprehensive income (loss) (33,517) (33,517)

Purchase of treasury stock (2,004,896) (2,004,896)

Retirement of treasury shares $ (26) (125,442) (1,706,971) 1,832,439

Retirement of treasury shares, shares (2,563)

Issuance of common stock under stock options and stock purchase plans 195,190 $ 5 195,185

Issuance of common stock under stock options and stock purchase plans, Shares 478

Share-based compensation expense 39,279 39,279

Balance at Aug. 31, 2019 $ (1,713,851) $ 254 $ 1,264,448 $ (1,305,347) $ (269,322) $ (1,403,884)

Balance, shares at Aug. 31, 2019 25,445

Consolidated Statements of St_2

Consolidated Statements of Stockholders’ Deficit (Parenthetical) – shares shares in Thousands 12 Months Ended 260 Months Ended

Aug. 31, 2019 Aug. 25, 2018 Aug. 26, 2017 Aug. 31, 2019

Statement of Stockholders’ Equity [Abstract]

Purchase of treasury stock, shares 2,182 2,398 1,495 146,900

Significant Accounting Policies

Significant Accounting Policies 12 Months Ended

Aug. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies Note A – Significant Accounting Policies Business: 5,772 604 35 non-automotive non-automotive Fiscal Year: Basis of Presentation: Use of Estimates: Cash and Cash Equivalents: 90 days or less less than five days Cash balances are held in various locations around the world. Cash and cash equivalents of $ 49.9 Accounts Receivable: Merchandise Inventories: last-in, first-out Marketable Debt Securities: available-for-sale. Property and Equipment: 40 50 5 15 3 10 Impairment of Long-Lived Assets: Goodwill: Intangible Assets: Derivative Instruments and Hedging Activities: AutoZone’s financial market risk results primarily from changes in interest rates. At times, AutoZone reduces its exposure to changes in interest rates by entering into various interest rate hedge instruments such as interest rate swap contracts, treasury lock agreements and forward-starting interest rate swaps. All of the Company’s interest rate hedge instruments are designated as cash flow hedges. Refer to “Note H – Derivative Financial Instruments” for additional disclosures regarding the Company’s derivative instruments and hedging activities. Cash flows related to these instruments designated as qualifying hedges are reflected in the accompanying Consolidated Statements of Cash Flows in the same categories as the cash flows from the items being hedged. Accordingly, cash flows relating to the settlement of interest rate derivatives hedging the forecasted issuance of debt have been reflected upon settlement as a component of financing cash flows. The resulting gain or loss from such settlement is deferred to Accumulated Other Comprehensive Loss and reclassified to interest expense over the term of the underlying debt. This reclassification of the deferred gains and losses impacts the interest expense recognized on the underlying debt that was hedged and is therefore reflected as a component of operating cash flows in periods subsequent to settlement. Foreign Currency: German Self-Insurance Reserves: The Company retains a significant portion of the risks associated with workers’ compensation, general liability, products liability, property and vehicle insurance. The Company obtains third party insurance to limit the exposure related to certain of these risks. The reserve for the Company’s liability associated with these risks totaled $207.0 million and $203.1 million at August 31, 2019 and August 25, 2018, respectively. The assumptions made by management in estimating its self-insurance reserves include consideration of historical cost experience, judgments about the present and expected levels of cost per claim and retention levels. The Company utilizes various methods, including analyses of historical trends and use of a specialist, to estimate the costs to settle reported claims and claims incurred but not yet reported. The actuarial methods develop estimates of the future ultimate claim costs based on claims incurred as of the balance sheet date. When estimating these liabilities, the Company considers factors, such as the severity, duration and frequency of claims, legal costs associated with claims, healthcare trends and projected inflation of related factors. The Company’s liabilities for workers’ compensation, general and product liability, property and vehicle claims do not have scheduled maturities; however, the timing of future payments is predictable based on historical patterns and is relied upon in determining the current portion of these liabilities. Accordingly, the Company reflects the net present value of the obligations it determines to be long-term using the risk-free interest rate as of the balance sheet date. Deferred Rent: Financial Instruments: Income Taxes: The Company recognizes liabilities for uncertain income tax positions based on a two-step more than 50% The Company classifies interest related to income tax liabilities, and if applicable, penalties, as a component of Income tax expense. The income tax liabilities and accrued interest and penalties that are expected to be payable within one year of the balance sheet date are presented within the Accrued expenses and other caption in the accompanying Consolidated Balance Sheets. The remaining portion of the income tax liabilities and accrued interest and penalties are presented within the Other long-term liabilities caption in the accompanying Consolidated Balance Sheets because payment of cash is not anticipated within one year of the balance sheet date. Refer to “Note D – Income Taxes” for additional disclosures regarding the Company’s income taxes. Sales and Use Taxes: Dividends: Revenue Recognition: The Company’s performance obligations are typically satisfied when the customer takes possession of the merchandise. Revenue from retail customers is recognized when the customer leaves our store with the purchased products, typically at the point of sale or for E-commerce same-day. pre-established – A portion of the Company’s transactions include the sale of auto parts that contain a core component. The core component represents the recyclable portion of the auto part. Customers are not charged for the core component of the new part if a used core is returned at the point of sale of the new part; otherwise the Company charges customers a specified amount for the core component. The Company refunds that same amount upon the customer returning a used core to the store at a later date. The Company does not recognize sales or cost of sales for the core component of these transactions when a used part is returned or expected to be returned from the customer. Vendor Allowances and Advertising Costs: Rebates and other miscellaneous incentives are earned based on purchases or product sales and are accrued ratably over the purchase or sale of the related product. These monies are generally recorded as a reduction of merchandise inventories and are recognized as a reduction to cost of sales as the related inventories are sold. For arrangements that provide for reimbursement of specific, incremental, identifiable costs incurred by the Company in selling the vendors’ products, the vendor funds are recorded as a reduction to Operating, selling, general and administrative expenses in the period in which the specific costs were incurred. The Company expenses advertising costs as incurred. Advertising expense, net of vendor promotional funds, was $87.5 million in fiscal 2019, $95.2 million in fiscal 2018, and $93.1 million in fiscal 2017. Vendor promotional funds, which reduced advertising expense, amounted to $32.2 million in fiscal 2019, $25.3 million in fiscal 2018, and $28.3 million in fiscal 2017. Cost of Sales and Operating, Selling, General and Administrative Expenses: Cost of Sales • Total cost of merchandise sold, including: • Freight expenses associated with moving merchandise inventories from the Company’s vendors to the distribution centers; • Vendor allowances that are not reimbursements for specific, incremental and identifiable costs • Costs associated with operating the Company’s supply chain, including payroll and benefit costs, warehouse occupancy costs, transportation costs and depreciation; and • Inventory shrinkage Operating, Selling, General and Administrative Expenses • Payroll and benefit costs for store, field leadership and store support employees; • Occupancy costs of store and store support facilities; • Depreciation and amortization related to store and store support assets; • Transportation costs associated with field leadership, commercial sales force and deliveries from stores; • Advertising; • Self – • Other administrative costs, such as credit card transaction fees, legal costs, supplies and travel and lodging Warranty Costs: Shipping and Handling Costs: Pre-opening Pre-opening Earnings per Share Share-Based Payments: Risk and Uncertainties: Recently Adopted Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, 2014-09, 2014-09, 2014-09 In October 2016, the FASB issued ASU 2016-16, 2016-16 2016-16 Recently Issued Accounting Pronouncements: In February 2016, the FASB issued ASU 2016-02, Accounting Standard Codification 840 (“ASC 840”), two-fold right-of-use The Company established a cross-functional implementation team to implement the new standard and identify new processes and controls to ensure compliance with the new standard. The implementation team has implemented ASU 2016-02 In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting 2018-07 2018-07 In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other Internal Use Software (Subtopic 350-40): internal-use 2018-15 In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 2018-19, Codification Improvements to Topic 326, Financial Instruments Credit Losses. 2016-13 2016-13

Share-Based Payments

Share-Based Payments 12 Months Ended

Aug. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payments Note B – Share-Based Payments Overview of Share-Based Payment Plans The Company has several active and inactive equity incentive plans under which the Company has been authorized to grant share-based awards to key employees and non-employee at a d iscou nt Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan On December 15, 2010, the Company’s stockholders approved the 2011 Equity Incentive Award Plan (the “2011 Plan”), allowing the Company to provide equity-based compensation to non-employee non-employee During fiscal 2016, the Company’s stockholders approved the Amended and Restated AutoZone, Inc. 2011 Equity Incentive Award Plan (the “Amended 2011 Equity Plan”). The Amended 2011 Equity Plan imposes a maximum limit on the compensation, measured as the sum of any cash compensation and the aggregate grant date fair value of awards granted under the Amended 2011 Equity Plan, which may be paid to non-employee ten-year AutoZone, Inc. Director Compensation Program During fiscal 2014, the Company adopted the 2014 Director Compensation Program (the “Program”), which states that non-employee non-employee non-employee Non-employee 2011 Director Compensation Program In addition to the 2011 Plan, on December 15, 2010, the Company adopted the 2011 Director Compensation Program (the “2011 Program”), which stated that non-employee one-fourth non-employee Total share-based compensation expense (a component of Operating, selling, general and administrative expenses) was $43.3 million for fiscal 2019, $43.7 million for fiscal 2018 and $38.2 million for fiscal 2017. As of August 31, 2019, share-based compensation expense for unvested awards not yet recognized in earnings is $34.3 million and will be recognized over a weighted average period of 1.7 years. General terms and methods of valuation for the Company’s share-based awards are as follows: Stock Options The Company grants options to purchase common stock to certain of its employees under its plan at prices equal to the market value of the stock on the date of grant. Options have a term of 10 years or 10 years and one day from grant date. Employee options generally vest in equal annual installments on the first, second, third and fourth anniversaries of the grant date and generally have 30 or 90 days after the service 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 following table presents the weighted average for key assumptions used in determining the fair value of options granted and the related share-based compensation expense: Year Ended August 31, August 25, August 26, Expected price volatility 21 % 20 % 18 % Risk-free interest rates 3.0 % 1.9 % 1.2 % Weighted average expected lives (in years) 5.6 5.1 5.1 Forfeiture rate 10 % 10 % 10 % Dividend yield 0 % 0 % 0 % The following methodologies were applied in developing the assumptions used in determining the fair value of options granted: Expected price volatility Risk-free interest rate Expected lives Forfeiture rate Dividend yield The weighted average grant date fair value per share of options granted was $208.37 during fiscal 2019, $129.12 during fiscal 2018 and $139.80 during fiscal 2017. The intrinsic value of options exercised was $227.4 million in fiscal 2019, $123.1 million in fiscal 2018 and $93.9 million in fiscal 2017. The total fair value of options vested was $34.5 million in fiscal 2019, $35.7 million in fiscal 2018 and $34.7 million in fiscal 2017. The Company generally issues new shares when options are exercised. The following table summarizes information about stock option activity for the year ended August 31, 2019: Number of Shares Weighted Average Exercise Weighted- (in years) Aggregate Intrinsic (in thousands) Outstanding – August 25, 2018 1,706,866 $ 534.74 Granted 172,750 774.33 Exercised (471,216 ) 413.60 Cancelled (59,089 ) 679.92 Outstanding – August 31, 2019 1,349,311 601.36 6.08 $ 675,097 Exercisable 793,266 528.85 4.88 454,415 Expected to vest 500,441 704.81 7.80 198,614 Available for future grants 547,519 Restricted Stock Units Restricted stock unit awards are valued at the market price of a share of the Company’s stock on the date of grant and vest ratably on an annual basis over a four-year service period and are payable in shares of common stock on the vesting date. Compensation expense for grants of employee restricted stock units is recognized on a straight-line basis over the four-year service period, less estimated forfeitures, which are consistent with stock option forfeiture assumptions. As of August 31, 2019, total unrecognized stock-based compensation expense related to nonvested restricted stock unit awards, net of estimated forfeitures, was approximately $5.6 million, before income taxes, which we expect to recognize over an estimated weighted average period of 3.1 years. Transactions related to restricted stock units for the fiscal year ended August 31, 2019 as follow: Number of Shares Weighted- Nonvested at August 25, 2018 — — Granted 13,021 $ 786.08 Vested (2,514 ) 838.34 Canceled or forfeited (458 ) 772.80 Nonvested at August 31, 2019 10,049 $ 773.61 Stock Appreciation Rights At August 31, 2019 , compensation expense Employee Stock Purchase Plan and Executive Stock Purchase Plan The Company recognized $2.8 million in compensation expense related to the discount on the selling of shares to employees and executives under the various share purchase plans in fiscal 2019, $2.1 million in fiscal 2018 and $1.8 million in fiscal 2017. Under the Employee Plan, 11,011, 14,523 and 2019, respectivel y all at market value

Accrued Expenses and Other

Accrued Expenses and Other 12 Months Ended

Aug. 31, 2019

Payables and Accruals [Abstract]

Accrued Expenses and Other Note C – Accrued Expenses and Other Accrued expenses and other consisted of the following: (in thousands) August 31, August 25, Accrued compensation, related payroll taxes and benefits $ 170,321 $ 195,004 Property, sales, and other taxes 122,372 106,050 Medical and casualty insurance claims (current portion) 89,250 88,761 Capital lease obligations 56,246 52,290 Accrued interest 48,147 36,902 Accrued gift cards 38,658 27,401 Accrued sales and warranty returns 34,310 20,025 Other 62,628 80,461 $ 621,932 $ 606,894 The Company retains a significant portion of the insurance risks associated with workers’ compensation, employee health, general, products liability, property and vehicle insurance. A portion of these self-insured losses is managed through a wholly owned insurance captive. The Company maintains certain levels for stop-loss coverage for each self-insured plan in to limit its liability for large claims. The retained limits per claim type

Income Taxes

Income Taxes 12 Months Ended

Aug. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes Note D – Income Taxes The components of income from continuing operations before income taxes are as follows: Year Ended (in thousands) August 31, August 25, August 26, Domestic $ 1,745,625 $ 1,412,963 $ 1,737,401 International 285,708 223,366 188,088 $ 2,031,333 $ 1,636,329 $ 1,925,489 The provision for income tax expense consisted of the following: Year Ended (in thousands) August 31, August 25, August 26, Current: Federal $ 274,504 $ 328,963 $ 487,492 State 45,457 36,389 31,733 International 59,100 57,702 50,493 379,061 423,054 569,718 Deferred: Federal 25,757 (131,926 ) 72,208 State 6,914 8,167 7,769 International 2,380 (502 ) (5,075 ) 35,051 (124,261 ) 74,902 Income tax expense $ 414,112 $ 298,793 $ 644,620 A reconciliation of the provision for income taxes to the amount computed by applying the federal statutory tax rate to income before …