Petsmart 2005 Annual Report Download - page 26

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Government Regulation
We are subject to various federal, state, provincial and local laws and regulations governing, among other
things: our relationships with employees, including minimum wage requirements, overtime, working conditions
and citizenship requirements; veterinary practices or the operation of veterinary hospitals in retail stores that may
impact our ability to operate veterinary hospitals in certain facilities; the transportation, handling and sale of small
pets; environmental regulations with respect to generation, handling, storage, transportation and disposal of waste
and biohazardous materials; the distribution, import/export and sale of products; the handling, security, protection
and use of customer information; and the licensing and certification of services.
We seek to structure our operations to comply with all federal, state, provincial and local laws and regulations
of each jurisdiction in which we operate. Given varying and uncertain interpretations of these laws and regulations
and the fact that the laws and regulations are enforced by the courts and by regulatory authorities with broad
discretion, there can be no assurances that we would be found to be in compliance in all jurisdictions. We also could
be subject to costs, including fines, penalties or sanctions and third party claims as a result of violations of, or
liabilities under, these laws and regulations.
Intellectual Property
We believe our intellectual property has significant value and is an important component in our merchandising
and marketing strategies. We have several service marks and trademarks registered with the United States Patent
and Trademark Office, or USPTO, including PetSmart», PetSmart.com», PetSmart PetsHotel», PetPerks», Where
Pets Are Family»and All You Need For The Life Of Your Pet», as well as many others. We also own several service
mark and trademark applications that are pending with the USPTO and anticipate filing additional applications in
the future. We also own numerous registered service marks, trademarks and pending applications in other countries,
including Canada, as well as several trade names, domain names and copyrights for use in our business.
Employees
As of January 29, 2006, we employed approximately 34,600 associates, approximately 16,800 of whom were
employed full time. We continue to invest in education for our full and part-time associates as part of our emphasis
on customer service and providing pet care solutions. We are subject to no collective bargaining agreements and
have experienced no work stoppages. We consider our relationship with our associates to be good. Increases in the
federal minimum wage in recent years have not had a material effect on our business.
Financial Information by Business Segment and Geographic Data
As of January 29, 2006, we had two operating segments, PetSmart North America, which included all retail
locations, and PetSmart Direct, which included our internet operations and equine catalog. We evaluated our
segment reporting requirements under Financial Accounting Standards Board, or FASB, Statement of Financial
Accounting Standards, or SFAS, No. 131, “Disclosures about Segments of an Enterprise and Related Information,”
and determined the PetSmart Direct operating segment does not meet the quantitative thresholds for disclosure as a
reportable operating segment.
Net sales in the United States were $3.7 billion, $3.3 billion and $2.9 billion for fiscal 2005, 2004 and 2003,
respectively. Net Canadian sales, denominated in United States dollars, were $107.7 million, $87.7 million and
$75.7 million for fiscal 2005, 2004 and 2003, respectively. Substantially all our long-lived assets are located in the
United States.
Available Information
We make available, free of charge through our internet web-site (www.petsmart.com), our Annual Report on
Form 10-K, our Quarterly Reports on Form 10-Q, our current reports on Form 8-K and amendments to those reports,
as soon as reasonably practicable after we electronically file such material, or furnish it to the Securities and
Exchange Commission.
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