Petsmart 2012 Annual Report Download - page 69

F-23
Future minimum annual rental commitments have not been reduced by amounts expected to be received from subtenants. At
February 3, 2013, the future annual payments expected to be collected from subtenants are as follows (in thousands):
2013......................................................................................................................................................................... $ 3,367
2014......................................................................................................................................................................... 3,078
2015......................................................................................................................................................................... 3,092
2016......................................................................................................................................................................... 2,330
2017......................................................................................................................................................................... 1,442
Thereafter................................................................................................................................................................ 2,256
$ 15,565
Note 12 — Commitments and Contingencies
Advertising Purchase Commitments
As of February 3, 2013, we had obligations to purchase $32.3 million of advertising in 2013.
Product Purchase Commitments
As of February 3, 2013, we had various commitments to purchase $57.0 million and $25.0 million of merchandise from certain
vendors in 2013 and 2014, respectively.
Litigation and Settlements
We are involved in the legal proceedings described below and are subject to other claims and litigation arising in the normal
course of our business. We have made accruals with respect to certain of these matters, where appropriate, that are reflected in our
consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters, we have not
made accruals because we have not yet determined that a loss is probable or because the amount of loss cannot be reasonably
estimated. While the ultimate outcome of the matters described below cannot be determined, we currently do not expect that these
proceedings and claims, individually or in the aggregate, will have a material adverse effect on our financial position, results of
operations, or cash flows. The outcome of any litigation is inherently uncertain, however, and if decided adversely to PetSmart,
or if PetSmart determines that settlement of particular litigation is appropriate, we may be subject to liability that could have a
material adverse effect on the Company's financial position, results of operations, or cash flows. Accordingly, we disclose matters
below for which a material loss is reasonably possible. In each case, however, we have either determined that the range of loss is
not reasonably estimable or that any reasonably estimable range of loss is not material to our consolidated financial statements.
In January 2011, we were served with a lawsuit captioned Pedroza, et al. v. PetSmart, Inc., a case originally filed in California
Superior Court for the County of San Bernardino. The case has been removed to the United States District Court for the Central
District of California. The complaint alleges, purportedly on behalf of current and former exempt store management in California,
that we improperly classified our store management as exempt pursuant to the California Labor Code, and as a result failed to: (i)
pay or provide to such managers proper wages, overtime compensation, or rest or meal periods, (ii) maintain and provide accurate
wage-related statements and records, and (iii) reimburse certain business expenses, in each case as is required by the California
Labor Code.The lawsuit seeks compensatory damages, statutory penalties and other relief, including liquidated damages, attorneys'
fees, costs and injunctive relief. The court has since dismissed the plaintiff's claim for statutory penalties for the alleged failures
to provide accurate wage statements and pay all wages upon termination. On January 28, 2013, the court issued a decision denying
class certification. The remaining claims were subsequently dismissed.
In May 2012, we were named as a defendant in Moore, et al. v. PetSmart, Inc., et. al., a lawsuit originally filed in California
Superior Court for the County of Alameda. PetSmart removed the case to the United States District Court for the Northern District
of California. The complaint brings both individual and class action claims, first alleging that PetSmart failed to engage in the
interactive process and failed to accommodate the disabilities of four current and former named associates. The complaint also
alleges on behalf of current and former hourly store associates that PetSmart failed to provide pay for all hours worked, failed to
properly reimburse associates for business expenses, and failed to provide timely and uninterrupted meal and rest periods. The
lawsuit seeks compensatory damages, statutory penalties, and other relief, including attorneys' fees, costs, and injunctive relief.
In September 2012, a former associate named us as a defendant in McKee, et al. v. PetSmart, Inc., which is currently pending
before the United States District Court for the District of Delaware. The case seeks to assert a Fair Labor Standards Act collective
PetSmart, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements — (Continued)