Petsmart 2001 Annual Report Download - page 55

PETsMART, Inc. and Subsidiaries
Notes to Consolidated Financial Statements Ì (Continued)
common shares. The rights expire August 28, 2007 and are subject to redemption at a price of $0.001 in
speciÑed circumstances.
Note 16 Ì Supplemental Schedule of Cash Flows
Interest paid during Ñscal 2000, 1999, and 1998 amounted to approximately $23,810,000, $22,929,000,
and $23,757,000, respectively. Such amounts include interest paid on the bank credit facilities and capital
leases.
Income taxes paid, net of refunds, during Ñscal 2000, 1999, and 1998 amounted to approximately
$3,923,000, $12,648,000 and $3,396,000, respectively.
During Ñscal year 2000, 1999, and 1998, the Company incurred capital lease obligations of approximately
$11,690,000, $1,795,000, and $34,997,000, respectively, for new equipment and buildings.
During Ñscal 1999, the Company consummated a transfer of assets of PVS to MMIH in exchange for an
additional equity investment in MMIH (see Note 3). The assets of PVS included approximately $3,291,000
of merchandise and supplies inventory, $5,730,000 of property and equipment, net, $13,858,000 of goodwill,
net, $673,000 of deferred income taxes, and $655,000 of accrued vacation liability.
The following is a summary of the net cash eÅect from the sale of the UK subsidiary in Ñscal 1999 (see
Note 6):
Working capital, other than cash ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 11,408,000
Property and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 45,076,000
Other assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,953,000
Net assets of subsidiary sold in excess of proceeds ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (23,605,000)
Capital lease obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (7,552,000)
Disposal transaction costs paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4,040,000)
Deferred rents and other liabilitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,463,000)
Net cash eÅect from sale of UK subsidiary ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 37,777,000
Note 17 Ì Subsequent Events
On April 30, 2001, the Company entered into a new credit arrangement with a Ñnancial institution
providing for borrowings of up to $250,000,000, including a sublimit of up to $150,000,000 for letters of credit
and expiring on April 30, 2004. Borrowings and letter of credit issuances under the facility will be subject to a
borrowing base and will bear interest, at the Company's option, at either a bank's prime rate or LIBOR, plus
applicable margins to be determined based on certain Ñnancial tests. The new arrangement is secured by
substantially all personal property assets of the Company and its domestic subsidiaries and certain real
property of the Company. In addition, the Company obtained Ñnancing for up to $132,300,000 to reÑnance
certain Ñnancing arrangements related to properties leased by the Company under structured lease facilities.
This new credit arrangement replaced the Company's prior revolving credit arrangement.
Note 18 Ì Financial Information by Business Segment
The Company sells and distributes a wide variety of pet and equine products including pet food, treats,
litter, pet supplies, live Ñsh, birds, and small animals and other goods and equine related products through
retail stores, catalogs, and e-commerce. Additionally, the Company provides directly, or indirectly through a
related party, veterinary, grooming, and obedience training services in many of its retail locations. As of the
end of Ñscal 2000, the Company operates three reportable business segments. PETsMART North American
operations, the largest segment, includes all retail stores in the United States and Canada, along with the
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