Petsmart 2011 Annual Report Download - page 70

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PetSmart, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements — (Continued)
The master operating agreement also includes a provision for the sharing of profits on the sales of ther-
apeutic pet foods sold in all stores with an operating Banfield hospital. The net sales and gross profit on the sale
of therapeutic pet foods are not material to our consolidated financial statements.
Note 6 — Property and Equipment
Property and equipment consists of the following (in thousands):
January 29,
2012
January 30,
2011
Land ....................................................... $ 1,032 $ 1,032
Buildings ................................................... 14,193 15,520
Furniture, fixtures and equipment ................................ 1,004,584 984,755
Leasehold improvements ....................................... 643,207 617,735
Computer software ........................................... 108,834 110,398
Buildings under capital leases ................................... 753,705 720,959
2,525,555 2,450,399
Less: accumulated depreciation and amortization ................... 1,516,144 1,347,380
1,009,411 1,103,019
Construction in progress ....................................... 57,617 29,416
Property and equipment, net .................................... $1,067,028 $1,132,435
Note 7 — Reserve for Closed Stores
The components of the reserve for closed stores were as follows (in thousands):
January 29,
2012
January 30,
2011
Total remaining gross occupancy costs ............................. $29,974 $ 34,313
Less:
Expected sublease income ..................................... (18,520) (22,964)
Interest costs ................................................ (1,447) (1,585)
Reserve for closed stores ........................................ $10,007 $ 9,764
Current portion, included in other current liabilities ................... 2,756 3,056
Noncurrent portion, included in other noncurrent liabilities ............. 7,251 6,708
Reserve for closed stores ........................................ $10,007 $ 9,764
F-18