Petsmart 2007 Annual Report Download - page 78

Note 15 — Supplemental Schedule of Cash Flows
Supplemental cash flow information for 2007, 2006 and 2005 was as follows (in thousands):
2007 2006 2005
(53 weeks) (52 weeks) (52 weeks)
Interest paid ....................................... $ 50,812 $ 37,913 $ 28,804
Income taxes paid, net of refunds ....................... $171,303 $125,468 $ 92,390
Assets acquired using capital lease obligations ............. $100,506 $ 98,628 $114,350
Accruals and accounts payable for capital expenditures ....... $ 27,560 $ 32,903 $ 29,469
Dividends declared but unpaid ......................... $ 3,837 $ 4,064 $ 4,170
Note 16 — Acquisition of Store Locations in Canada
We completed the purchase of 19 store locations which added 18 net new stores in Canada on May 31, 2007,
for approximately $37.0 million after all adjustments. The acquisition has been accounted for pursuant to
SFAS No. 141, “Business Combinations,” and accordingly, the operating results of the acquired stores are included
in the consolidated financial statements from the date of acquisition. In connection with the acquisition, we initially
recorded $27.5 million of goodwill. During the thirteen weeks ended October 28, 2007, we decreased our
preliminary purchase price by $0.5 million as a result of adjustments to inventory. The purchase price allocation
was finalized during the fourteen weeks ended February 3, 2008 with further adjustments to the carrying values of
assets and liabilities acquired, the useful lives of intangible assets and the residual amount allocated to goodwill.
The impact of the acquisition on our results of operations is immaterial. Since the acquisition date, goodwill has
increased approximately $2.2 million due to foreign currency translation as a result of the strengthening Canadian
dollar. The goodwill is expected to be deductible for tax purposes.
A summary of the final purchase price allocation is as follows (in thousands):
February 3, 2008
Fair value of assets acquired .......................................... $ 9,258
Goodwill ........................................................ 27,705
Total assets acquired .............................................. 36,963
Fair value of liabilities assumed ....................................... —
Net assets acquired ............................................... $36,963
Note 17 — Discontinuation of Equine Product Line
On February 28, 2007, we announced plans to exit our equine product line, including the sale or discon-
tinuation of StateLineTack.com and our equine catalog, and the sale of a warehouse, call center and store facility in
Brockport, New York.
On April 29, 2007, we entered into an agreement to sell a portion of the equine product line, including the State
Line Tack brand, certain inventory, customer lists and certain other assets to a third-party. The gain recognized was
not material.
We performed an impairment analysis on the remaining assets supporting the equine product line, including
the Brockport, New York facility, in accordance with FASB Statement of Financial Accounting Standards, or SFAS,
No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” that indicated no impairment existed.
We accelerated the depreciation on these assets, and they were fully depreciated to their estimated salvage value as
of February 3, 2008.
F-28
PetSmart, Inc. and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)