Petsmart 2000 Annual Report Download - page 54

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Foreign (5,482) (8,076) (5,047)
27,851 (857) (17,079)
Income tax expense (benefit) $ 25,077 $ 15,837 $ (17,735)
A reconciliation of the federal statutory tax rate to the C ompany’ s effective tax rate before cumulative effect
of a change in accounting principle is as follows:
Fis cal Year Ended
January 30, 2000 January 31, 1999 February 1, 1998
Dollars Percentage Dollars Percentage Dollars Percentage
(Dollars in thousands )
Provision at federal statutory tax
rate $ (2,386) (35)% $13,687 35% $(17,332) (35)%
State income taxes, net of federal
tax benefit 3,152 46 2,077 5 (1,665) (3)
Foreign taxes 804 12 95 — 556 1
Tax in exces s of financial reporting
loss on disposition of subsidiary,
net of accrual adjustments (5,000) (73) — — — —
Enacted change in foreign tax rate — — 240 1 609 1
Corporate joint venture losses not
deductible 10,171 149 — — — —
Change in valuation allowance 17,987 264 — — — —
Nondeductible acquisition costs — — — — 72 —
Other 349 5 (262) (1) 25 —
$25,077 368% $15,837 40% $(17,735) (36)%
Losses from the Company’ s equity investment in PETsMART.com are excluded from the Company’ s
consolidated income tax return, thereby impacting the reported effective tax rate. Also, the loss on the sale of the
United K ingdom subsidiary is not deductible for tax purposes until a capital gain is recognized to offset the capital
loss.
As of January 30, 2000, net operating loss carryforwards of approximately $14,840,000 were available for
Canadian income tax reporting purposes, which begin to expire in 2001, and capital loss carryforwards of
approximately $51,000,000 were available for U.S. income tax reporting purposes, which expire in 2004.
F-15
PETSMART, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of January 30, 2000, the Company recorded a deferred income tax asset (liability) of $6,794,000 and
9/16/2010 www.sec.gov/Archives/edgar/data/86…
sec.gov/…/0000950153-00-000575-d1.… 54/70