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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

For the fiscal year ended February 3, 2002.

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

Commission File Number 001-13927

CSK AUTO CORPORATION

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

      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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes     þ     No     o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

      As of April 17, 2002 the aggregate market value of the Company’s common stock held by non-affiliates was approximately $246.6 million. For purposes of the above statement only, all directors and executive officers of the registrant are assumed to be affiliates. As of April 17, 2002 there were 32,477,236 shares of the Company’s common stock outstanding.

Documents Incorporated by Reference

•	Portions of the Company’s definitive Proxy Statement on Schedule 14A, with respect to the Company’s 2002 Annual Meeting of Stockholders, are incorporated by reference into Part III of this Form 10-K.

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Note Concerning Forward-Looking Information

      Some of the information in this Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue” or similar words. You should read statements that contain these words carefully because they: (1) discuss our future expectations; (2) contain projections of our future results of operations or of our financial condition; or (3) state other “forward-looking” information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or over which we have no control, the occurrence of which could have a material adverse effect on our business, operating results and financial condition. These events may include future operating results and potential competition, among other things. Factors that might cause actual results to differ materially from those in such forward-looking statements include, but are not limited to, those discussed in Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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PART I

Item 1.     Business

General

      We are the largest specialty retailer of automotive parts and accessories in the Western United States and one of the largest such retailers in the United States, based on store count. We have the number one market position in 25 of the 28 geographic markets in which we operate, based on store count. As of February 3, 2002, we operated 1,130 stores in 19 states under one fully integrated operating format and three brand names:

	•	Checker Auto Parts, founded in 1969, with 418 stores in the Southwestern, Rocky Mountain and Northern Plains states and Hawaii;
	•	Schuck’s Auto Supply, founded in 1917, with 235 stores in the Pacific Northwest and Alaska; and
	•	Kragen Auto Parts, founded in 1947, with 477 stores primarily in California.

      We offer a broad selection of national brand name and generic automotive products for domestic and imported cars and light trucks. Our products include new and remanufactured automotive replacement parts, maintenance items and accessories. Our stores average approximately 7,290 square feet in size and typically offer a store specific mix of between 13,000 and 18,000 stock-keeping units, or SKUs. We also operate a highly efficient network of 39 strategically located depots to provide approximately 75% of our stores an additional 65,000 SKUs on a same-day delivery basis. Through our extensive on-line vendor network, we make available up to an additional 250,000 SKUs on a same-day delivery basis to approximately 75% of our stores and up to 1,000,000 additional SKUs on a next-day delivery basis to substantially all of our stores.

      We serve both the do-it-yourself (DIY) and the commercial installer, or do-it-for-me (DIFM), markets. The DIY market, which is comprised of consumers who typically repair and maintain vehicles themselves, is the foundation of our business. Sales to the DIY market represented approximately 82% of our net sales for fiscal year 2001. The DIFM market is comprised of auto repair professionals, fleet owners, governments, and municipalities and accounted for approximately 60% of the annual sales in the U.S. automotive aftermarket industry in 2000, according to statistics published by the Automotive Aftermarket Industry Association. Sales to the DIFM market represented approximately 18% of our net sales for fiscal year 2001. In 1994, we began targeting the DIFM market to leverage our existing store base, fixed costs, inventory, and in-store personnel. We believe we are well positioned to effectively and profitably further penetrate the highly fragmented DIFM market because of our sales force dedicated to DIFM customers, experienced in-store sales associates, high level of customer service, conveniently located stores, efficient depot delivery network, attractive pricing, and ability to provide timely availability of a broad selection of national brand name products.

Industry Overview

      We compete in the approximately $98 billion U.S. automotive aftermarket industry, which includes replacement parts (excluding tires), accessories, maintenance items, batteries and automotive fluids for cars and light trucks. The industry is comprised of the $36 billion DIY market and the $62 billion DIFM market. From 1991 to 2000, the DIY market grew at a compound annual rate of 5.8% and the DIFM market grew at a compound annual rate of 6.0%. We believe that the U.S. automotive aftermarket industry is characterized by stable demand and is growing because of increases in:

	•	the size and age of the automotive fleet. The number of light vehicles in use, which includes cars and light trucks, has increased from 175.4 million in 1991 to 205.3 million in 2000. From 1991 to 2000, the average age of cars increased from 7.9 years to 9.1 years and the average age of light trucks increased from 8.1 years to 8.4 years. In the Western United States, where we operate, the average age of domestic cars was 10.8 years in 2000 according to Lang Marketing Resources, Inc.
	•	the number of miles driven annually per vehicle. Miles driven annually has grown from approximately 2.0 trillion in 1991 to approximately 2.5 trillion in 1999.

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	•	the number of licensed drivers. Licensed drivers increased from 169.0 million in 1991 to approximately 187.2 million in 1999.
	•	the percentage of the total light vehicle fleet represented by light trucks, which includes SUVs. Light trucks comprised 37.8% of all light vehicles in use in 2000, up from 29.7% in 1991. According to Lang Marketing Resources, Inc., in 2000, each light truck generated an average of $480 of aftermarket product purchases versus $325 of such purchases generated per car.
	•	the number of light vehicles coming off warranty, particularly leased vehicles. From 1996 to 2000, approximately 80.2 million new light vehicles were sold and an additional 18.6 million light vehicles were leased. Management believes that leased vehicles are often under-maintained and, therefore, may require higher-than-average maintenance and repair expenditures in the post-warranty period.

      Despite significant consolidation of automotive aftermarket retailers in recent years, the industry remains highly fragmented. Our primary competitors include national and regional automotive parts chains, wholesalers, jobber stores, independent operators, automobile dealers, and discount stores and mass merchandisers that carry automotive products. According to Lang Marketing Resources, Inc., specialty automotive parts retailers have increased their market share of U.S. DIY sales from 31.6% in 1994 to 40.8% in 2000.

Competitive Strengths

      We believe that our competitive strengths include the following:

      Leading Market Position in the Western United States. We are the largest specialty retailer of automotive parts and accessories in the Western United States and have the number one market position in 25 of the 28 geographic markets in which we operate, based on store count. Our research indicates that we have better brand name recognition than many of our competitors in several of our key markets. We believe that this is due to the long operating history of our stores, our advertising and marketing programs, the breadth of our product selection, and our reputation for superior customer service.

      As the largest specialty retailer of automotive parts and accessories in the Western United States, we believe we have certain competitive advantages over smaller retail chains and independent operators. These advantages include: (1) our brand name recognition as a trusted source of automotive parts and accessories, (2) our ability to make available a broad selection of products on a timely basis, (3) marketing and distribution efficiencies due to economies of scale, and (4) our advanced store level information and distribution systems, which are the result of our significant investments in recent years. We also believe that we enjoy a competitive advantage over mass merchandisers due to our focus on automotive parts and accessories and our knowledgeable sales associates.

      Focus on Customer Service. Our research indicates that consumers in our key markets rate our sales associates as “the most knowledgeable and helpful” more frequently than those of certain other well-known specialty retailers of automotive parts. Recruiting, training and retaining high quality sales associates is a major component of our focus on customer service. Our training programs and incentives encourage our sales associates to develop technical expertise, which enables them to effectively advise customers on product selection and use. We have an average of two Automotive Society of Engineers, or ASE, certified mechanics per store. To further satisfy our customers’ needs we also offer free testing of certain parts, “no hassle” return policies, electronically maintained warranties and a customer service call center.

      Profitable and Growing Commercial Sales Program. We believe we are well positioned to effectively service our DIFM customers, who typically require convenient locations, a high level of customer service, and timely availability of brand name products. Beginning in fiscal 1996, we significantly increased our marketing efforts to the DIFM market, added sales personnel dedicated to our DIFM customers, increased the breadth and depth of our product selection, and improved and expanded our distribution systems. We currently operate DIFM sales centers in 545 of our stores and our DIFM sales have grown from $89.6 million, or approximately 11% of net sales in fiscal 1996, to $259.1 million, or approximately 18% of net sales for the fiscal year ended February 3, 2002. The growth of our commercial sales program has increased the sales base for our

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      Timely Availability of a Broad Selection of Brand Name Products. Our stores typically offer a store specific mix of between 13,000 and 18,000 SKUs. We also operate a highly efficient network of 39 strategically located depots to provide approximately 75% of our stores an additional 65,000 SKUs on a same-day delivery basis. Through our extensive on-line vendor network, we make available up to an additional 250,000 SKUs on a same-day delivery basis to approximately 75% of our stores and up to 1,000,000 additional SKUs on a next-day delivery basis to substantially all of our stores. While our stores also stock high quality generic products that appeal to our value conscious customers, we feature a broad selection of national brand name products that help generate customer traffic and have strong consumer appeal, particularly in the DIFM market.

      Sophisticated Store-Level Information and Distribution Systems. In recent years, we have made significant investments in sophisticated store-level information systems and warehouse and distribution systems, in order to more effectively manage our inventory and increase the availability of products to our customers. Our sophisticated inventory management systems provide inventory movement forecasting based on history, trend and seasonality. Our systems have enhanced our ability to predict the size and timing of product requirements by closely monitoring service level goals, vendor lead times and cost of inventory assumptions. Our store level replenishment system generates orders based upon store on-hand and store model stock quantities. Store model stock quantities are determined by an automatic model stock adjustment system, which utilizes historical sales patterns, seasonality and store presentation requirements. We also maintain a store specific precision-pricing program that seeks to optimize margins while maintaining price competitiveness. Our fully integrated warehouse and distribution network and our 39 strategically located depots, which operate using state-of-the-art technology, have allowed us to significantly improve distribution efficiency. Additionally, these investments have allowed us to both improve our in-stock inventory levels and reduce delivery costs and times for products.

Business Strategy

      Our business strategy includes the following key elements:

      Drive Customer Traffic and Increase Sales Base. Our marketing and merchandising strategy is designed to drive customer traffic and build market share. Our strategy is to make available to our customers one of the broadest selections of quality brand name products on a timely basis in order to maximize customer satisfaction and generate loyal repeat customers. We offer our products at competitive prices, in conveniently located and attractively designed stores. Our advertising programs are specifically tailored to target our various customer constituencies for maximum appeal and effectiveness.

      Our pricing philosophy is that we should not lose a customer because of price. Our pricing strategy is to offer everyday low prices at each of our stores. As a result, we closely monitor our competitors’ pricing levels through our precision pricing program, which analyzes prices at the store level rather than at the market or chain level. This initiative enables us to establish pricing levels at each store based upon that store’s local market competition. Our entry-level products offer excellent value by meeting standard quality requirements at low prices. In addition, our sales associates are encouraged to offer alternative products at slightly higher price points. These products typically provide extra features, improved performance, an enhanced warranty or are national brand items.

      Grow Our Commercial Sales Business. We intend to continue to grow our DIFM business and to increase our market share by providing a high level of customer service to our existing customers and by using our dedicated DIFM sales force to aggressively market to potential new customers in different sectors of the commercial market, including independent repair garages, national repair shops, fleet owners and municipalities. By leveraging our existing store network, we believe we can increase store operating profits as we expand our DIFM sales.

      Maximize Customer Satisfaction. We aim to provide the highest level of customer service in our industry to generate repeat business. We attempt to achieve this goal by staffing our stores with well trained

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      Improve Profitability and Cash Flow. We continually review our operations in order to ensure that we are optimally allocating our resources and have an appropriate cost structure that will enable us to grow our net sales, profitability, and free cash flow. We recently completed a thorough review of our operations, which led to the planned closure of 36 unprofitable stores (28 of which had been closed as of February 3, 2002 and 2 are under contract for sale), personnel reductions at the corporate and store levels, certain store operating expense reductions, and a reprofiling of our store inventory designed to maximize revenues by increasing our inventory turns. We refer to this program as our Profitability Enhancement Program, or PEP.

Store Operations

      Our stores are divided into eight geographic regions: Southwest, Rocky Mountain, Northwest, Northern Plains, Southern California, Coastal California, Los Angeles, and Northern California. Each region is administered by a regional manager, each of whom oversees seven to eleven district managers. Each of our district managers has responsibility for between 8 and 19 stores.

      The table below sets forth, as of February 3, 2002, the geographic distribution of our stores and the trade names under which they operated.

      Our stores are generally open seven days a week, with hours from 8:00 a.m. to 9:00 p.m. (9:00 a.m. to 6:00 p.m. on Sundays). The average store employs approximately 10 to 20 employees, including a store manager, two assistant store managers and a staff of full-time and part-time employees.

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Store Formats

      Approximately 63% of our stores are freestanding, with the balance principally located within strip shopping centers. The stores, which range in size from 2,600 to 24,000 square feet, average approximately 7,290 square feet in size and offer a store specific mix of between 13,000 and 18,000 SKUs

      We have three prototype store designs, which are 6,000, 7,000 and 8,000 square feet in size. The store size for a given new location is selected generally based upon sales volume expectations determined through demographics and the detailed market analysis that we prepare as part of our site selection process. The following table categorizes our stores by size, as of February 3, 2002:

      Approximately 85% to 90% of each store’s square footage is selling space, of which approximately 40% to 50% is dedicated to automotive replacement parts inventory. The replacement parts inventory area is staffed with knowledgeable parts personnel and is equipped with our electronic parts catalog. The remaining selling space contains gondolas for accessories and maintenance items, including oil and air filters, additives, waxes and other items, together with specifically designed shelving for batteries and, in many stores, oil products.

Store Growth

      Our store growth is focused on our existing or contiguous markets and includes:

	•	opening new stores;
	•	relocating smaller stores to larger stores at better locations; and
	•	expanding selected stores.

      Our market strategy group, which is a part of our real estate department, utilizes a sophisticated, market-based approach that identifies and analyzes potential store locations based on detailed demographic and competitive studies. These demographic and competitive studies include analysis of population density, growth patterns, age, per capita income, vehicle traffic counts and the number and type of existing automotive-related facilities, such as automotive parts stores and other competitors within a pre-determined radius of the potential new location. These potential locations are compared to our existing locations to determine opportunities for opening new stores and relocating or expanding existing stores.

      The following table sets forth our store development activities during the periods indicated:

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      We opened, relocated, or expanded 25 stores in fiscal 2001 as compared to 60 stores in fiscal 2000. We expect to open, relocate or expand approximately 25 stores in fiscal 2002.

Store Merchandising

      Our store merchandising program, which classifies our product mix into 120 separate categories, is designed to determine the optimal inventory mix at each individual store based on that store’s historical sales. We believe that we can improve store sales, gross profit margin and inventory turnover by tailoring individual store inventory mix based on historical sales patterns for each of the 120 product categories. As part of our Profitability Enhancement Program, we completed a comprehensive review of slower-selling items that meet neither current return criteria nor our objective for inventory turns. This review has resulted in a plan to eliminate certain merchandise, and to transfer certain goods to stores that are turning them satisfactorily.

Purchasing

      Merchandise is selected from over 300 suppliers and purchased for all stores by personnel at our corporate headquarters in Phoenix, Arizona. No one class of product and no single supplier accounted for as much as 10% of our purchases in fiscal 2001.

      Our inventory management systems include the E-3 Trim Buying System, which provides inventory movement forecasting based upon history, trend and seasonality. Combined with service level goals, vendor lead times and cost of inventory assumptions, the E-3 Trim Buying System determines the timing and size of purchase orders. Approximately 90% of the dollar value of transactions are sent via electronic data interchange, with the remainder being sent by a computer facsimile interface. Our store replenishment system generates orders based upon store on-hand and store model stock. This includes an automatic model stock adjustment system utilizing historical sales, seasonality and store presentation requirements. We also can allocate seasonal and promotional merchandise based upon a store’s history of prior promotional and seasonal sales.

      Our stores offer products with nationally recognized, well-advertised brand names, such as Armor All, Autolite, AC Delco, Castrol, Dayco, Exide, Fel Pro, Fram, Havoline, Mobil, Monroe, Pennzoil, Prestone, Quaker State, RayBestos, Stant, Sylvania, Turtle Wax and Valvoline. In addition to brand name products, our stores carry a wide variety of high quality generic products. Because most of our generic products are produced by nationally recognized manufacturers that produce similar brand name products that enjoy a high degree of consumer acceptance, we believe that our generic products are of a quality that is comparable to such brand name products.

Commercial Sales Program

      In addition to our primary focus on serving the do-it-yourself consumer, we have significantly increased our marketing efforts to the commercial customer in the automotive replacement parts market. The commercial market constitutes in excess of 60% of the annual sales in the automotive aftermarket and is currently growing at a faster rate than the do-it-yourself market. Our commercial sales program, which is intended to facilitate penetration of this market, is targeted to professional mechanics, auto repair shops, auto dealers, fleet owners, mass and general merchandisers with auto repair facilities and other commercial repair outlets located near our stores.

      We have made a significant commitment to this portion of our business and upgraded the information systems capabilities available to the commercial sales group. In addition, we employ one district sales manager for approximately every five stores that have a commercial sales center. A district sales manager is responsible for servicing existing commercial accounts and developing new commercial accounts. In addition, at a minimum, each commercial sales center has a dedicated in-store salesperson, driver and delivery vehicle.

      We believe we are well positioned to effectively and profitably service commercial customers, who typically require a higher level of customer service and broad product availability. The commercial market has traditionally been serviced primarily by jobbers. Recently, however, automotive specialty retailing chains, such

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      As of February 3, 2002, we operated commercial service centers in 545 of our stores. Our sales to commercial accounts (including sales by stores without commercial service centers) increased 3.9% to $259.1 million in fiscal 2001 from $249.3 million in fiscal 2000. Fiscal 2001 has 52 weeks while fiscal 2000 had 53 weeks. On a comparable store basis and excluding the 53rd week in fiscal 2000, commercial sales increased 10% in fiscal 2001 over fiscal 2000.

Advertising

      We support our marketing and merchandising strategy primarily through print advertising, in-store promotional displays and radio and television advertising. The print advertising consists of monthly color circulars that are produced by our in-house advertising department and that contain redeemable coupons. We also advertise on radio, television and billboards primarily to reinforce our image and name recognition. Television advertising is targeted to sports programming and radio advertising is primarily aired during commuting hours. Advertising efforts include Spanish language television and radio as well as bilingual store signage. In-store signs and displays are used to promote products, identify departments, and to announce store specials. We also sponsor two National Hot Rod Association Funny Cars and have been designated the “Official Auto Parts Store of the NHRA.” We have the following web sites on the Internet:

	•	http://www.cskauto.com;
	•	http://www.checkerauto.com;
	•	http://www.schucks.com;
	•	http://www.kragen.com;
	•	http://www.identifix.com; and
	•	http://www.autoshop-online.com.

Diagnostic & Maintenance Repair Services

      Through our subsidiary, Automotive Information Systems, Inc., we provide diagnostic vehicle repair information to automotive technicians, automotive replacement parts manufacturers, automotive test equipment manufacturers, and to DIY consumers. This allows us to provide our DIY, DIFM, and Internet customers with high quality diagnostic information in order to assist them with correctly identifying problems and efficiently obtaining the parts they need.

      Automotive Information Systems was founded in 1987 and markets its products and services under the brand name IDENTIFIX. These products and services include:

	•	technical hotlines serving more than 15,000 automotive shops;
	•	the RepairTrac Service Bulletin;
	•	on-line diagrams containing over 50,000 wiring diagrams;
	•	consulting services to automotive manufacturers; and
	•	consumer services provided through our worldwide web sites.

      Automotive Information Systems has evolved into one of the leading sources of knowledge about where and how vehicles break, and how to correctly repair those vehicles. This extensive automotive knowledge comes from: (1) more than 250,000 calls received annually from technicians seeking diagnostic assistance for

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      In Automotive Information Systems’ 14 years of operation, it has developed a customer base of more than 15,000 repair shops by providing efficient and accurate information resources for automotive diagnostics and repair. We are committed to supporting Automotive Information Systems’ existing customer base while developing new ways to deliver information to its customers.

Associates

      As of February 3, 2002, we employed approximately 8,620 full-time associates and approximately 5,130 part-time associates. Approximately 87% of our personnel are employed in store level operations, 8% in distribution and 5% in our corporate headquarters, including our call center and priority parts operation.

      We have never experienced any material labor disruption and believe that our labor relations are good. Except for approximately 450 associates located at approximately 40 stores in the Northern California market, who have been represented by a union for many years, none of our personnel are represented by a labor union.

      CSK Tech, our sales associate development program, is dedicated to the continuous education of store associates through structured on-the-job training and formal classroom instruction. The curriculum focuses on four areas of the associate’s development:

	•	customer service skills;
	•	basic automotive systems;
	•	advanced automotive systems; and
	•	management development.

      Much of the training is delivered through formal classes in training centers that are fully equipped with the same systems as are in our stores. We believe that our training programs enable sales associates to provide a high level of service to a wide variety of customers ranging from less knowledgeable do-it-yourself consumers to more sophisticated purchasers requiring diagnostic advice. We also provide continuing training programs for store managers and district managers designed to assist them in increasing store-level efficiency and improving their potential for promotion. In addition, we require periodic meetings of district and store managers to facilitate and enhance communications within our organization. Many of our current associates have passed the ASE-P2 test, a nationally recognized certification for auto parts technicians.

Competition

      We compete in both the DIY and DIFM markets of the automotive aftermarket industry, which is highly fragmented and generally very competitive. We compete primarily with national and regional retail automotive parts chains (such as AutoZone, Inc. and The Pep Boys — Manny, Moe and Jack, Inc.), wholesalers or jobber stores (some of which are associated with national automotive parts distributors or associations, such as NAPA), automobile dealers, and discount stores and mass merchandisers that carry automotive replacement parts, maintenance items and accessories (such as Wal-Mart Stores, Inc.). As the largest specialty retailer of automotive parts and accessories in the Western United States, we believe we have certain competitive advantages over smaller retail chains and independent operators. These advantages include: (1) our brand name recognition as a trusted source of automotive parts and accessories, (2) our ability to make available a broad selection of products on a timely basis, (3) marketing and distribution efficiencies due to economies of scale, and (4) our advanced store level information and distribution systems, which are the result of our significant investments in recent years. We also believe that we enjoy a competitive advantage over mass merchandisers due to our focus on automotive parts and accessories and our knowledgeable sales associates.

      The principal competitive factors that affect our business are store location, customer service, product selection, availability, quality and price. While we believe that we compete effectively in our various markets,

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Trade Names, Service Marks and Trademarks

      We have the right to exclusively use the tradename “Checker” nationwide in connection with the automotive parts retailing business pursuant to a settlement and use agreement with the owner of the federal registration for such trademark. We own and have registered the service mark “Schuck’s” with the United States Patent and Trademark Office for use in connection with the automotive parts retailing business. We expect to file a renewal for this mark prior to June 30, 2005, based on its current expiration date. We have common law rights to use the tradename “Kragen” in connection with the automotive parts retailing business. In addition, we own and have registered numerous trademarks with respect to many of our private label products and advertising and marketing strategies. We believe that our various tradenames, service marks and trademarks are important to our merchandising strategy, but that our business is not otherwise dependant on any particular service mark, tradename or trademark. There are no infringing uses known by us that materially affect the use of such marks.

Warehouse and Distribution

      Our warehouse and distribution system utilizes bar coding, radio frequency scanners and sophisticated conveyor and put-to-light systems. We instituted engineered labor standards and incentive programs in each of our distribution centers which have contributed to improved labor productivity. Each store is currently serviced by one of our three main distribution centers, with the regional distribution centers handling bulk materials, such as oil. All of our merchandise is shipped by vendors to our distribution centers, with the exception of batteries, which are shipped directly to stores by the vendor. We have sufficient warehouse and distribution capacity to meet the requirements of our growth plans for the foreseeable future.

Seasonality

      Our business is somewhat seasonal in nature, with the highest sales occurring in the summer months of June through August (overlapping our second and third fiscal quarters). In addition, our business is affected by weather conditions. While unusually severe or inclement weather tends to reduce sales, as our customers are more likely to defer elective maintenance during such periods, extremely hot and cold temperatures tend to enhance sales by causing auto parts to fail and sales of seasonal products to increase.

Item 2.     Properties

      The following table sets forth certain information concerning our principal leased facilities as of February 3, 2002:

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(1)	This facility is owned by Missouri Falls Partners, an affiliate of The Carmel Trust (“Carmel”), a trust governed under the laws of Canada. Carmel is an affiliate of ours and a member of the Carmel Group.
(2)	Subject to time period and other restrictions, we have the ability to expand the Phoenix distribution center by approximately 80,000 square feet and the Dixon distribution center by 160,000 square feet should the need arise.

      At February 3, 2002, all but two of our operating stores were leased. The expiration dates (including renewal options) of the store leases are summarized as follows:

      Additional information regarding our facilities appears in Item I. Business under the captions “Store Operations,” “Store Formats” and “Warehouse and Distribution.”

Item 3.     Legal Proceedings

      We were served on March 8, 2000 with a complaint filed in Federal Court in the Eastern District of New York by the Coalition for a Level Playing Field, O.K. and, based on the current amended complaint, 255 individual auto parts dealers alleging that we and seven other auto parts dealers (AutoZone, Inc., Wal-Mart Stores, Inc., Advance Stores Company, Inc., Discount Auto, Inc., The Pep Boys — Manny, Moe and Jack, Inc., O’Reilly Automotive, Inc., and Keystone Automotive Operations, Inc.) violated the Robinson-Patman Act. Only 15 of the individual plaintiffs asserted claims against us. The complaint, which has been amended, alleges that we and other defendants knowingly either induced or received discriminatory prices from large suppliers, allegedly in violation of Section 2(a) and 2(f) of the Robinson-Patman Act, as well as received compensation from large suppliers for services not performed for those suppliers, allegedly in violation of Section 2(c) of the Robinson-Patman Act. The complaint seeks injunctive relief against all defendants and seeks treble damages on behalf of the individual auto parts dealers who are plaintiffs, plus attorneys’ fees. The complaint alleges that the estimated average damage amount per plaintiff is $1,000,000 (and more for those plaintiffs that are wholesale distributors and not simply jobbers) before trebling. We believe the suit is without merit and plan to vigorously defend it. We, along with other defendants, filed a motion to dismiss and certain other procedural motions. In October 2001, the court granted the motions in part and denied them in part. In March 2002, the court entered an order separating discovery with respect to liability and damages and setting various discovery deadlines. We do not currently believe that this complaint will result in liabilities material to our consolidated financial position, results of operations or cash flows.

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      During the second quarter of fiscal 2001, we recorded a $2.0 million charge for the settlement of certain other legal claims.

      We currently and from time to time are involved in other litigation incidental to the conduct of our business. The damages claimed in some of this litigation are substantial. Although the amount of liability that may result from these matters cannot be ascertained, we do not currently believe that, in the aggregate, they will result in liabilities material to our consolidated financial condition, results of operations or cash flows.

Environmental Matters

      We are subject to various federal, state and local laws and governmental regulations relating to the operation of our business, including those governing the handling, storage and disposal of hazardous substances, the recycling of batteries and used lubricants, and the ownership and operation of real property. For example, under environmental laws, a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous substances in soil or groundwater. Such laws often impose joint and several liability and liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. We have recorded no liabilities to provide for the cost of environmental remediation activities, as we do not believe that we have incurred any such liabilities pursuant to the existing accounting literature.

      At some of our acquired locations, automobiles are serviced in automotive service facilities that we sublease to third parties. As a result of investigations undertaken in connection with such acquisitions, we are aware that soil or groundwater may be contaminated at some of these properties. Although there can be no assurance, based on current information and, in some cases, indemnities we obtained from the former operators of these facilities, we believe that any such contamination will not have a material adverse effect on our financial position, results of operations or cash flows.

      As part of our operations, we handle hazardous materials in the ordinary course of business and our customers may bring hazardous materials onto our property in connection with, for example, our oil recycling program. We currently provide a recycling program for batteries and for the collection of used lubricants at certain of our stores as a service to our customers pursuant to agreements with third-party vendors. The batteries and used lubricants are collected by our associates, deposited into vendor-supplied containers/pallets and then disposed of by the third-party vendors. In general, our agreements with such vendors contain provisions that are designed to limit our potential liability under applicable environmental regulations for any damage or contamination that may be caused by the batteries and lubricants to off-site properties (including as a result of waste disposal) and to our properties, when caused by the vendor.

      We do not believe that compliance with environmental laws and regulations has had a material impact on our operations to date, but there can be no assurance that future compliance with such laws and regulations will not have a material adverse effect on our financial position, results of operations or cash flows.

Item 4.     Submission of Matters to a Vote of Security Holders

      No matters were submitted to a vote of our stockholders during the fourth quarter of fiscal 2001.

PART II

      Our common stock has been listed on the New York Stock Exchange under the symbol CAO since March 12, 1998. As of April 17, 2002, there were 32,477,236 shares of our common stock outstanding and there were approximately 94 record holders of our common stock.

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      The following table sets forth, for the periods indicated, the high and low bid prices for our common stock as reported by the New York Stock Exchange.

      We have not paid any dividends on our common stock during the last two fiscal years. We currently do not intend to pay any dividends on our common stock.

      We are a holding company with no business operations of our own. We therefore depend upon payments, dividends and distributions from CSK Auto, Inc., our wholly owned subsidiary, for funds to pay dividends to our stockholders. CSK Auto, Inc. currently intends to retain its earnings to fund its working capital, debt repayment and capital expenditure needs and for other general corporate purposes. CSK Auto, Inc. has no current intention of paying dividends or making other distributions to us in excess of amounts necessary to pay our operating expenses and taxes. CSK Auto, Inc.’s senior credit facility and the indentures governing its 11% Senior Subordinated Notes and 12% Senior Notes contain restrictions on CSK Auto, Inc.’s ability to pay dividends or make payments or other distributions to us.

7% Convertible Subordinated Debentures and Make-Whole Warrants

      On December 21, 2001, pursuant to a Securities Purchase Agreement by and among us, Investcorp CSK Holdings L.P., and LBI Group Inc. (the “Purchase Agreement”), we sold $50 million principal amount of 7% Convertible Subordinated Debentures (the “Convertible Debentures”) and associated warrants (the “Make-Whole Warrants”), including $30 million of Convertible Debentures and one Make-Whole Warrant to Investcorp CSK Holdings L.P., and $20 million of Convertible Debentures and one Make-Whole Warrant to Lehman Brothers Inc. The Convertible Debentures and Make-Whole Warrants were issued in reliance on the exemption from securities registration afforded by Rule 506 of Regulation D of the Securities Act. A Form D was filed with respect to these sales on January 4, 2002.

      The holders of the Convertible Debentures may convert them into our common stock at any time. Additionally, we may require the conversion of the Convertible Debentures into our common stock following satisfaction of certain conditions, including the effectiveness of a registration statement covering the shares of common stock to be issued upon conversion, absence of any event of default, and absence of specified changes in management. We currently expect that the registration statement will be declared effective by the SEC prior to May 20, 2002 and we intend to require conversion of the Convertible Debentures shortly thereafter. The conversion price for the Convertible Debentures is subject to certain anti-dilution provisions and other adjustments that may result in the issuance of additional shares of our common stock.

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      If the Convertible Debentures have not been converted at maturity in 2006, we can, at our option, either redeem the convertible subordinated debentures for 100% of the principal amount in cash or convert the Convertible Debentures into our common stock on an agreed basis.

      Agreements relating to the Convertible Debentures include provisions for conversion price adjustments and specific requirements for treatment of the Convertible Debentures in the event of a merger, sale of substantially all assets or similar transaction. In addition, in the event of a change of control, such agreements require us to make an offer to purchase the Convertible Debentures at a redemption price equal to 125% of the principal amount until December, 2002 and 112.5% thereafter. The Convertible Debentures also provide for monetary penalties if we fail to convert them into common stock upon the holder’s request.

      The Make-Whole Warrants are automatically exercisable into shares of our common stock on the earlier of (i) a change of control, and (ii) November 21, 2002, only if the following two events have occurred: (1) we have previously required the conversion of the Convertible Debentures; and (2) the conversion price of the Convertible Debentures at the time of such required conversion is greater than the “adjusted conversion price”.

      The “adjusted conversion price” is an amount equal to the greater of (i) the average of the closing sale prices of our common stock on the trading days from December 21, 2001 through November 20, 2002 and (ii) $4.94, as adjusted in the case of a change of control and for specified dilutive events.

      The number of shares of our common stock issuable upon exercise of the Make-Whole Warrants is equal to the following amount, subject to adjustment in accordance with the provisions of the Convertible Debentures and Make-Whole Warrants, and less a number of shares so as to have a cashless exercise of the warrants based on an exercise price of $0.01: (1) the quotient determined by dividing (A) the $50.0 million principal amount of the Convertible Debentures initially issued, plus any interest payments added to the principal of the Convertible Debentures, by (B) the adjusted conversion price; minus (2) the number of shares of our common stock we have issued upon conversion of the Convertible Debentures prior to the exercise of the warrants.

7% Convertible Subordinated Notes

      We sold a $30 million principal amount 7% convertible subordinated note in August 2001 to Oppenheimer Capital Income Fund pursuant to a Note Purchase Agreement dated August 14, 2001. This Note Purchase Agreement was executed and delivered in reliance on the exemption from securities registration afforded by Section 4(2) of the Securities Act. This note was converted into 4,524,886 shares of our common stock on December 21, 2001, and the issuance of these shares upon such conversion relied upon the exemption from securities registration afforded by Section 3(a)(9) of the Securities Act.

12% Senior Notes Due 2006

      On December 21, 2001, we issued a Guarantee with respect to $280.0 million aggregate principal amount of 12% Senior Notes due June 15, 2006 issued by our wholly owned subsidiary, CSK Auto, Inc., in a private offering underwritten by Credit Suisse First Boston Corp., J.P. Morgan Securities, Inc., and UBS Warburg, LLC. The Guarantee is an unregistered security which is exempt from registration under the exemption afforded by Regulation S and Section 4(2) of the Securities Act of 1933.

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      The following table sets forth our selected consolidated statement of operations, balance sheet and operating data. The selected statement of operations and balance sheet data are derived from our consolidated financial statements, which have been audited by PricewaterhouseCoopers LLP, independent accountants. You should read the data presented below together with our consolidated financial statements and related notes, the other financial information contained herein, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

See accompanying notes on pages 16 and 17.

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Notes to Selected Consolidated Financial Data

      (1) Our fiscal year consists of 52 or 53 weeks, ends on the Sunday nearest to January 31 and is named for the calendar year just ended. All fiscal years presented had 52 weeks except for fiscal 2000, which had 53 weeks.

      (2) Amounts in the above table have been prepared in accordance with accounting principles generally accepted in the United States of America. Certain one-time and special items are included in the results for each year presented, but are excluded from management’s evaluation of operations and are excluded for purposes of measuring compliance under our debt covenants. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a summary of the fiscal 2001, 2000 and 1999 one-time and special items.

      (3) Results of operations in fiscal 1998 include one-time and special items totaling $7.5 million, comprised of:

	•	The write-off of a $3.6 million prepaid management fee;
	•	$3.1 million of transition and integration expenses associated with 82 stores acquired from Trak Auto Corporation; and
	•	$0.8 million of costs in connection with the CSK Auto Corporation’s secondary offering of common stock.

      In addition, our fiscal 1998 results include an extraordinary loss of $6.8 million (net of an income tax benefit of $4.2 million) relating to the early extinguishment of outstanding debt with the proceeds from our initial public offering.

      (4) In December 1997, we acquired 82 stores from Trak Auto Corporation, which have been included in results of operations from the date of acquisition. Results of operations in fiscal 1997 include one-time and special items totaling $5.3 million, comprised of:

	•	$3.4 million of transition and integration expenses associated with the 82 stores acquired from Trak Auto Corporation;
	•	$0.9 million of non-cash stock based compensation.
	•	$1.0 million of other expenses related to our recapitalization in October 1996

      In addition, our fiscal 1997 results include an extraordinary loss of $3.0 million (net of an income tax benefit of $2.1 million) relating to the early extinguishment of outstanding debt under our previous senior credit facility.

      (5) EBITDA represents net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization expense. While EBITDA is not intended to represent cash flow from operations as defined by generally accepted accounting principles and should not be considered as an indicator of operating performance or an alternative to cash flow as a measure of liquidity, it is included herein to provide additional information with respect to our ability to meet our future debt service, capital expenditure and working capital requirements.

      Adjusted EBITDA reflects the impact of one-time and special items that we believe are important in evaluating our results on a normalized basis. Such items are included in the calculation of EBITDA as it is defined in our senior credit facility, for purposes of measuring our compliance with debt covenants.

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      Both EBITDA and adjusted EBITDA may differ in method of calculation from similarly titled measures used by other companies. The computation for each of the respective periods shown is as follows:

(a)	In March 2000, we participated in the formation of a new joint venture, PartsAmerica.com (“PA”), with Advance Stores Company Incorporated (“Advance”) and Sequoia Capital. PA engaged in the sale of automotive parts and accessories via e-commerce. Results of operations for fiscal 2000 reflect the write off our investment in PA (a total of $3.2 million) due to extremely poor operating results. During the second quarter of fiscal 2001, PA ceased operations.
(b)	See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the fiscal 2001, 2000 and 1999 one-time and special items. See notes 3 and 4 above for a discussion of these items for fiscal 1998 and fiscal 1997. One time and special items for purposes of adjusted EBITDA calculations do not exclude a $1.5 million reduction of closed store expenses (C.) in fiscal 2001 as the senior credit facility definition does not require such treatment of this item.

      (6) Adjusted EBITDAR represents adjusted EBITDA plus operating lease rental expense. Because the proportion of stores leased versus owned varies among industry competitors, we believe that adjusted

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      (7) Represents sales to commercial accounts, including sales from stores without commercial sales centers.

      (8) For purposes of the ratio, earnings means the sum of:

	•	our income (loss) before income taxes from continuing operations;
	•	our proportionate share of the income or loss of any fifty-percent owned companies; and
	•	our fixed charges.

      Fixed charges means the sum of:

	•	the interest we pay on borrowed funds;
	•	the amount we amortize for debt discount, premium, and issuance expense; and
	•	one-third (the proportion deemed representative of the interest factor) of all our rental expenses.

      For the year ended February 3, 2002, earnings were $22.9 million less than needed to cover our fixed charges.

      (9) Comparable store net sales data is calculated based on the change in net sales commencing after the time a new store has been open twelve months. Therefore, sales for the first twelve months a new store is open are not included in the comparable store calculation. Relocations are included in comparable store net sales from the date of opening.

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General

      CSK Auto Corporation is the largest retailer of automotive parts and accessories in the Western United States and one of the largest retailers of these products in the United States based, in each case, on our number of stores. As of February 3, 2002, we operated 1,130 stores under one fully integrated operating format and three brand names:

	•	Checker Auto Parts, founded in 1969, with 418 stores in the Southwestern, Rocky Mountain and Northern Plains states and Hawaii;
	•	Schuck’s Auto Supply, founded in 1917, with 235 stores in the Pacific Northwest and Alaska; and
	•	Kragen Auto Parts, founded in 1947, with 477 stores primarily in California.

Fiscal Years

      Our fiscal year ends on the Sunday nearest to January 31 and is named for the calendar year just ended. Occasionally this results in a fiscal year that is 53 weeks long. When we refer to a particular fiscal year, we mean the following:

	•	Fiscal 2001 means the 52 weeks ended February 3, 2002;
	•	Fiscal 2000 means the 53 weeks ended February 4, 2001; and
	•	Fiscal 1999 means the 52 weeks ended January 30, 2000.

Results of Operations — Fiscal 2001 versus Fiscal 2000 and Fiscal 2000 versus Fiscal 1999

     Overview

      Reported financial results are summarized as follows: