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These excerpts taken from the PETM 10-K filed Mar 26, 2009. Related
Party Transactions
We have an investment in MMIH which, through a wholly-owned
subsidiary, Medical Management International, Inc., operates
full-service veterinary hospitals inside 722 of our stores. Our
investment consists of common and convertible preferred stock.
During the thirteen weeks ended April 29, 2007, we sold a
portion of our non-voting shares in MMIH resulting in a pre-tax
gain of $95.4 million. In connection with this transaction,
we also converted our remaining MMIH non-voting shares to voting
shares. The increase in voting shares caused us to exceed the
significant influence threshold as defined by GAAP, which
required us to account for our investment in MMIH using the
equity method of accounting instead of the previously applied
cost method in accordance with APB No. 18. As of
February 1, 2009, we owned approximately 21.5% of the
voting stock and approximately 21.0% of the combined voting and
non-voting stock of MMIH.
Conversion to the equity method of accounting would typically
require a restatement of prior years’ consolidated
financial statements for MMIH earnings. However, because the
amounts are not material, we have not restated prior year
financial statements. Our equity income from our investment in
MMIH, which is recorded one month in arrears, was
$2.6 million for 2008.
We charge MMIH license fees for the space used by the veterinary
hospitals and for their portion of utilities costs. We treat
these amounts as a reduction of the retail stores’
occupancy costs, which are included as a component of cost of
sales in the Consolidated Statements of Operations and
Comprehensive Income. We also charge MMIH for its portion of
specific operating expenses, and treat the reimbursement as a
reduction of the stores’ operating expense.
In June 2007, we entered into a new master operating agreement
with MMIH that has an initial
15-year term
and was retroactive to February 2007. The new agreement includes
a change to the calculation of license fees charged to MMIH and
a provision for MMIH to pay their portion of utilities costs.
We recognized license fees, utilities and other cost
reimbursements of $30.1 million and $32.9 million
during 2008 and 2007, respectively. Receivables from MMIH
totaled $3.3 million and $4.5 million at
February 1, 2009, and February 3, 2008, respectively,
and were included in the receivables in the accompanying
Consolidated Balance Sheets.
The master operating agreement also includes a provision for the
sharing of profits on the sales of therapeutic pet foods sold in
all stores with a hospital operated by MMIH.
Related Party Transactions We have an investment in MMIH which, through a wholly-owned subsidiary, Medical Management International, Inc., operates full-service veterinary hospitals inside 722 of our stores. Our investment consists of common and convertible preferred stock. During the thirteen weeks ended April 29, 2007, we sold a portion of our non-voting shares in MMIH resulting in a pre-tax gain of $95.4 million. In connection with this transaction, we also converted our remaining MMIH non-voting shares to voting shares. The increase in voting shares caused us to exceed the significant influence threshold as defined by GAAP, which required us to account for our investment in MMIH using the equity method of accounting instead of the previously applied cost method in accordance with APB No. 18. As of February 1, 2009, we owned approximately 21.5% of the voting stock and approximately 21.0% of the combined voting and non-voting stock of MMIH. Conversion to the equity method of accounting would typically require a restatement of prior years’ consolidated financial statements for MMIH earnings. However, because the amounts are not material, we have not restated prior year financial statements. Our equity income from our investment in MMIH, which is recorded one month in arrears, was $2.6 million for 2008. We charge MMIH license fees for the space used by the veterinary hospitals and for their portion of utilities costs. We treat these amounts as a reduction of the retail stores’ occupancy costs, which are included as a component of cost of sales in the Consolidated Statements of Operations and Comprehensive Income. We also charge MMIH for its portion of specific operating expenses, and treat the reimbursement as a reduction of the stores’ operating expense. In June 2007, we entered into a new master operating agreement with MMIH that has an initial 15-year term and was retroactive to February 2007. The new agreement includes a change to the calculation of license fees charged to MMIH and a provision for MMIH to pay their portion of utilities costs. We recognized license fees, utilities and other cost reimbursements of $30.1 million and $32.9 million during 2008 and 2007, respectively. Receivables from MMIH totaled $3.3 million and $4.5 million at February 1, 2009, and February 3, 2008, respectively, and were included in the receivables in the accompanying Consolidated Balance Sheets. The master operating agreement also includes a provision for the sharing of profits on the sales of therapeutic pet foods sold in all stores with a hospital operated by MMIH. These excerpts taken from the PETM 10-K filed Mar 31, 2008. Related
Party Transactions
We have an investment in MMI Holdings, Inc. who, through a
wholly-owned subsidiary, Medical Management International, Inc.,
operates full-service veterinary hospitals inside 673 of our
stores. Our investment consists of common and convertible
preferred stock.
During the first quarter of 2007, we sold a portion of our
non-voting shares in MMIH resulting in a pre-tax gain of
$95.4 million. In connection with this transaction, we also
converted our remaining MMIH non-voting shares to voting shares.
The increase in voting shares caused us to exceed the
significant influence threshold as defined by GAAP, which
required us to account for our investment in MMIH using the
equity method of accounting instead of the previously applied
cost method in accordance with APB No. 18. As of
February 3, 2008, we owned approximately 21.5% of the
voting stock and approximately 21.0% of the combined voting and
non-voting stock of MMIH.
Conversion to the equity method of accounting would typically
require a restatement of prior years’ consolidated
financial statements for MMIH earnings. However, because the
amounts are not material, we have not restated prior year
financial statements. Our equity income from our investment in
MMIH, which is recorded one month in arrears, was
$1.7 million for 2007.
We charge MMIH license fees for the space used by the veterinary
hospitals and for their portion of utilities costs. We treat
these amounts as a reduction of the retail stores’
occupancy costs, which are included as a component of cost of
sales in the Consolidated Statements of Operations and
Comprehensive Income. We also charge MMIH for its portion of
specific operating expenses, and treat the reimbursement as a
reduction of the stores’ operating expense.
Table of Contents
In June 2007, we entered into a new master operating agreement
with MMIH that has an initial
15-year term
and was retroactive to February 2007. The new agreement includes
a change to the calculation of license fees charged to MMIH and
a provision for MMIH to pay their portion of utilities costs.
We recognized license fees, utilities and other cost
reimbursements of $32.9 million and $21.4 million
during 2007 and 2006, respectively. Receivables from MMIH
totaled $4.5 million and $6.9 million at
February 3, 2008 and January 28, 2007, respectively,
and were included in the receivables in the accompanying
Consolidated Balance Sheets.
The master operating agreement also includes a provision for the
sharing of profits on the sales of therapeutic pet foods sold in
all stores with an operating Banfield hospital.
Related Party Transactions We have an investment in MMI Holdings, Inc. who, through a wholly-owned subsidiary, Medical Management International, Inc., operates full-service veterinary hospitals inside 673 of our stores. Our investment consists of common and convertible preferred stock. During the first quarter of 2007, we sold a portion of our non-voting shares in MMIH resulting in a pre-tax gain of $95.4 million. In connection with this transaction, we also converted our remaining MMIH non-voting shares to voting shares. The increase in voting shares caused us to exceed the significant influence threshold as defined by GAAP, which required us to account for our investment in MMIH using the equity method of accounting instead of the previously applied cost method in accordance with APB No. 18. As of February 3, 2008, we owned approximately 21.5% of the voting stock and approximately 21.0% of the combined voting and non-voting stock of MMIH. Conversion to the equity method of accounting would typically require a restatement of prior years’ consolidated financial statements for MMIH earnings. However, because the amounts are not material, we have not restated prior year financial statements. Our equity income from our investment in MMIH, which is recorded one month in arrears, was $1.7 million for 2007. We charge MMIH license fees for the space used by the veterinary hospitals and for their portion of utilities costs. We treat these amounts as a reduction of the retail stores’ occupancy costs, which are included as a component of cost of sales in the Consolidated Statements of Operations and Comprehensive Income. We also charge MMIH for its portion of specific operating expenses, and treat the reimbursement as a reduction of the stores’ operating expense.
Table of ContentsIn June 2007, we entered into a new master operating agreement with MMIH that has an initial 15-year term and was retroactive to February 2007. The new agreement includes a change to the calculation of license fees charged to MMIH and a provision for MMIH to pay their portion of utilities costs. We recognized license fees, utilities and other cost reimbursements of $32.9 million and $21.4 million during 2007 and 2006, respectively. Receivables from MMIH totaled $4.5 million and $6.9 million at February 3, 2008 and January 28, 2007, respectively, and were included in the receivables in the accompanying Consolidated Balance Sheets. The master operating agreement also includes a provision for the sharing of profits on the sales of therapeutic pet foods sold in all stores with an operating Banfield hospital. This excerpt taken from the PETM 10-K filed Mar 28, 2007. Related
Party Transactions
We have an investment in MMIH, a provider of veterinary and
other pet-related services. MMIH operates full-service
veterinary hospitals inside 596 of our stores, under the
registered trademark of Banfield, The Pet Hospital. Philip L.
Francis, our Chairman and Chief Executive Officer, and Robert F.
Moran, our President and Chief Operating Officer, are members of
the board of directors of MMIH. Our investment consists of
common and convertible preferred stock. During fiscal 2006, we
purchased an additional $4.4 million of MMIH capital stock
from certain MMIH shareholders, and as of January 28, 2007,
we owned approximately 17.8% of the voting stock and
approximately 37.2% of the combined voting and non-voting stock
of MMIH. On February 28, 2007, we announced an agreement to
increase our portion of the voting shares of MMIH and decrease
our portion of non-voting shares. See Note 17 to the Notes
to Consolidated Financial Statements for additional information.
We charge MMIH licensing fees for the space used by the
veterinary hospitals, and we treat this income as a reduction of
stores’ occupancy costs. We record occupancy costs as a
component of cost of sales in our Consolidated Statements of
Operations and Comprehensive Income. Licensing fees are
determined by fixed costs per square foot, adjusted for the
number of days the hospitals are open and sales volumes
achieved. We recognized licensing fees of $21.4 million in
fiscal 2006, $16.3 million in fiscal 2005 and
$13.1 million in fiscal 2004. We also charge MMIH for its
portion of specific operating expenses and treat the
reimbursement as a reduction of the stores’ operating
expenses. Receivables from MMIH totaled $6.9 million and
$5.4 million at January 28, 2007 and January 29,
2006, respectively, and were included in receivables in the
Consolidated Balance Sheets.
In March 2005, we entered into a merchandising agreement with
MMIH and Hills Pet Nutrition, Inc. to provide certain
prescription diet and other therapeutic pet food in our stores
with an operating Banfield Pet Hospital. As of January 28,
2007 and January 29, 2006, we had $0.4 million and
$1.2 million, respectively, payable to MMIH included in
other current liabilities in the Consolidated Balance Sheets as
a result of activity under this merchandising agreement.
This excerpt taken from the PETM 10-K filed Apr 10, 2006. Related
Party Transactions
We have an investment in MMI Holdings, Inc., or MMIH, a provider
of veterinary and other pet-related services. MMIH, through a
wholly owned subsidiary, Medical Management International, Inc.,
or MMI, operates full-service veterinary hospitals inside 513 of
our stores, under the registered trademark of Banfield, The Pet
Hospital. Philip L. Francis, our Chairman and Chief Executive
Officer, and Robert F. Moran, our President and Chief Operating
Officer, are members of the board of directors of MMIH. Our
investment consists of common and convertible preferred stock.
During the second quarter of 2004, we purchased an additional
$0.8 million of MMIH capital stock from certain MMIH
stockholders, and as of January 29, 2006, we owned
approximately 17.1% of the voting stock and approximately 37.0%
of the combined voting and non-voting stock of MMIH. We charge
MMI licensing fees for the space used by the veterinary
hospitals, and we treat this income as a reduction of the retail
Table of Contents
stores’ occupancy costs. We record occupancy costs as a
component of cost of sales in our Consolidated Statements of
Operations. Licensing fees are determined by fixed costs per
square foot, adjusted for the number of days the hospitals are
open and sales volumes achieved. We recognized licensing fees of
$16.3 million in fiscal 2005, $13.1 million in fiscal
2004 and $10.5 million in fiscal 2003. We also charge MMI
for its portion of specific operating expenses and treat the
reimbursement as a reduction of the stores’ operating
expenses. Receivables from MMI totaled $5.4 million and
$5.5 million at January 29, 2006 and January 30,
2005, respectively, and were included in receivables in the
Consolidated Balance Sheets.
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