Petsmart 2000 Annual Report Download - page 56

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At January 30, 2000 and January 31, 1999, no amounts were outstanding under the agreement. During the
year ended January 30, 2000, an average of approximately $5,273,000 was outstanding under the agreement, at
an average annual interest rate of 8.39%. No advances or payments were made under the
F-16
PETSMART, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
agreement during the year ended January 31, 1999. Outstanding letters of credit at January 30, 2000 and
January 31, 1999 totaled approximately $21,300,000 and $20,800,000, respectively.
During fiscal 1999, the Company terminated, at a nominal cost, interest rate swap agreements it had with a
financial institution. These swaps were used to allow the Company to fix the variable lease payments and
borrowing rates on its leases and credit facilities for certain periods of time. The interest rate swap agreements
were scheduled to terminate at various dates between July 2000 and April 2002.
NOTE 9 — SUBORDINATED CONVERTIBLE NOTES
In November 1997, the Company sold $200,000,000 aggregate principal amount of 6 3/4% Convertible
Subordinated Notes due 2004 (“the Notes”). The Notes are convertible into approximately 22,857,000 shares
of the Company’ s common stock at any time prior to maturity at a conversion price of $8.75 per share, subject
to adjustment under certain conditions, and may be redeemed, in whole or in part, by the Company at any time
after November 1, 2000 at a premium.
NOTE 10 — INTEREST EXPENSE
Interest costs incurred and interest capitalized on construction in progress are as follows:
Fis cal Year Ended
January 30, January 31, February 1,
2000 1999 1998
(In thous ands )
Interest costs incurred $ 23,475 $ 24,123 $ 13,984
Less: interest costs capitalized 1,753 1,073 63
Interest expens e $ 21,722 $ 23,050 $ 13,921
NOTE 11 — LEASES
The C ompany leases substantially all of its stores, distribution centers, corporate offices and certain
equipment under noncancelable operating leases, expiring at various dates through 2020. The Company has the
option to extend the terms of the leases for periods ranging from 5 to 20 years. Certain leases require payment of
property taxes, utilities, common area maintenance and insurance and additional rents based on a percentage of
9/16/2010 www.sec.gov/Archives/edgar/data/86…
sec.gov/…/0000950153-00-000575-d1.… 56/70