Petsmart 2011 Annual Report Download - page 42

Operating Capital and Capital Expenditure Requirements
Substantially all our stores are leased facilities. We opened 53 new stores and closed 8 stores in 2011. Gen-
erally, each new store requires capital expenditures of approximately $0.8 million for fixtures, equipment and
leasehold improvements, approximately $0.3 million for inventory and approximately $0.1 million for preopen-
ing costs. We expect total capital spending to be $130 million to $140 million for 2012, based on our plan to
open approximately 45 to 50 net new stores and 5 new PetsHotels, continuing our investment in the development
of our information systems, adding to our services capacity with the expansion of certain grooming salons,
remodeling or replacing certain store assets and continuing our store refresh program.
Our ability to fund our operations and make planned capital expenditures depends on our future operating
performance and cash flow, which are subject to prevailing economic conditions and to financial, business and
other factors, some of which are beyond our control.
The following table presents our capital expenditures for each of the past three years (in thousands):
Year Ended
January 29,
2012
January 30,
2011
January 31,
2010
Capital Expenditures:
New stores ........................................ $ 44,737 $ 38,715 $ 28,470
Store-related projects(1) .............................. 32,623 49,989 48,051
PetsHotel(2) ....................................... 3,758 9,980 6,510
Information technology .............................. 36,035 20,222 20,297
Supply chain ....................................... 3,080 5,484 8,851
Other ............................................. 487 684 741
Total capital expenditures ........................... $120,720 $125,074 $112,920
(1) Includes store remodels, grooming salon expansions, equipment replacement, relocations, and various mer-
chandising projects.
(2) For new and existing stores.
Lease and Other Commitments
Operating and Capital Lease Commitments and Other Obligations
The following table summarizes our contractual obligations, net of estimated sublease income, at
January 29, 2012, and the effect that such obligations are expected to have on our liquidity and cash flows in
future periods (in thousands):
Contractual Obligation 2012
2013 &
2014
2015 &
2016
2017 and
Beyond Other Total
Operating lease obligations(1) ......... $305,090 $595,918 $460,721 $535,606 $ — $1,897,335
Capital lease obligations(1)(2) ......... 107,548 228,182 199,283 289,648 — 824,661
Purchase obligations(3) .............. 51,661 47,000 — — — 98,661
Uncertain tax positions(4) ............————20,940 20,940
Insurance obligations(5) .............. 31,672———71,116 102,788
Total ............................. $495,971 $871,100 $660,004 $825,254 $92,056 $2,944,385
Less: Sublease income ............... 3,258 6,196 5,119 2,593 — 17,166
Net Total .......................... $492,713 $864,904 $654,885 $822,661 $92,056 $2,927,219
(1) In addition to the commitments scheduled above, we have executed operating and capital lease agreements
with total minimum lease payments of $104.1 million. The typical lease term for these agreements is 10
years. We do not have the right to control the use of the property under these leases as of January 29, 2012
because we have not taken physical possession of the property.
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