The rating on PetSmart Inc. reflects Standard&Poor's Ratings Services' expectation for operational stability and modest improvement of credit measures over the near term. We expect profitability to keep benefiting from stronger sales and improving sales mix as consumers continue to shift back to higher margin discretionary products. We view PetSmart's financial risk profile as significant. Credit measures have improved moderately, with leverage decreasing to 2.5x at May 1, 2011, from about 3.0x two years ago and EBITDA interest coverage increasing to 4.5x from 4.0x for the corresponding periods. PetSmart has only capital leases on its balance sheet and as such, improvement of these metrics mainly reflected EBITDA growth, and, to some extent, lower operating lease commitments. We expect
