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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K/A
(Amendment No. 1)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

|For the Fiscal Year Ended
February 2, 2002 |  | Commission File Number:
0-23574
|------------------------------------------ |  | -------------------------------

PETCO ANIMAL SUPPLIES, INC.(Exact Name of Registrant As Specified In Its Charter)

|Delaware(Sate or Other Jurisdiction
of Incorporation or Organization) |  | 33-0479906(I.R.S. Employer Identification No.)
|--------------------------------------------------------------------- |  | ----------------------------------------------

9125 Rehco Road, San Diego, California 92121(Address, Including Zip Code, of Principal Executive Offices)

Registrant's
Telephone Number, Including Area Code: (858) 453-7845

Securities
registered pursuant to Section 12(b) of the Act: None

Securities
registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value(Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.    YES o    NO ý

Indicate
by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K:    ý

As
of April 12, 2002, there were outstanding 57,271,673 shares of the registrant's Common Stock, $0.001 par value. As of that date, the aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately $472.5 million. Shares of common stock held by each executive officer and director and by each person or group who owns
10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination
for other purposes.

Documents
Incorporated By Reference: Certain exhibits filed with the registrant's Registration Statement on Form S-1 (Registration No. 333-75830),
as amended, and Registration Statement on Form S-4 (Registration Statement No. 333-84474) are incorporated herein by reference into Part IV of this
Form 10-K.

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EXPLANATORY NOTE:

PETCO
Animal Supplies, Inc. hereby amends Part IV, Item 14 of its Annual Report on Form 10-K for the fiscal year ended February 2, 2002, as
originally filed with the Securities and Exchange Commission on April 23, 2002 (the "Original Filing"). In accordance with Rule 12b-15 of the Securities Exchange Act of 1934,
as amended, we have set forth the text of Item 14 in its entirety. However, we are filing this Amendment No. 1 on Form 10-K/A solely to add the conformed signature of KPMG,
LLP, our independent auditors, to the Independent Auditors' Report contained on page F-1 of the Original Filing, which was inadvertently omitted from the Original Filing. No other
modifications or changes have been made to Item 14 in this Amendment No. 1 on Form 10-K/A and all other items of the Original Filing shall remain as set forth in the Original
Filing.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1.    Financial Statements

The Consolidated Financial Statements required by this Item are submitted in a separate section beginning on page F-1 of this Annual Report on
Form 10-K.

|                                                                                                                                    |  | Page
|----------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Independent Auditors Report                                                                                                         |  | F-1 
|Consolidated Balance Sheets as of February 3, 2001 and February 2, 2002                                                             |  | F-2 
|Consolidated Statements of Operations for the Years Ended January 29, 2000, February 3, 2001 and February 2, 2002                   |  | F-3 
|Consolidated Statement of Stockholders Equity (Deficit) for the Years Ended January 29, 2000, February 3, 2001 and February 2, 2002 |  | F-4 
|Consolidated Statements of Cash Flows for the Years Ended January 29, 2000, February 3, 2001 and February 2, 2002                   |  | F-5 
|Notes to Consolidated Financial Statements                                                                                          |  | F-6 



Schedules
not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.



The
exhibits listed under Item 14(c) hereof are filed as part of this Annual Report on Form 10-K.

(b)  Reports on Form 8-K.

No reports on Form 8-K were filed during the fiscal quarter ended February 2, 2002.

(c)  Exhibits

The following exhibits are filed with this Annual Report on Form 10-K:

|Exhibit
Number |  | Exhibit Description                                                                                                                                                           
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Third Amended and Restated Certificate of Incorporation of PETCO Animal Supplies, Inc.(1)                                                                                     
|3.2            |  | Amended and Restated Bylaws of PETCO Animal Supplies, Inc.(1)                                                                                                                 
|4.1            |  | Indenture, dated as of October 26, 2001, by and among PETCO, certain subsidiaries of PETCO and U.S. Bank N.A., as trustee(2)                                                  
|4.2            |  | Exchange and Registration Rights Agreement, dated as of October 26, 2001, by and between PETCO, certain subsidiaries of PETCO and Goldman Sachs & Co., as initial purchaser(2)
|4.3*           |  | Form of Specimen Common Stock Certificate                                                                                                                                     

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|4.4    |  | Amended and Restated Stockholders Agreement, dated as of February 19, 2002, by and among PETCO and certain stockholders of PETCO(2)                                                                                                                                                                                                                                    
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.5    |  | Amended and Restated Securityholders Agreement, dated as of February 19, 2002, by and among PETCO and certain securityholders of PETCO(2)                                                                                                                                                                                                                              
|10.1   |  | Form of Amended and Restated Credit Agreement, dated as of October 26, 2001, by and among PETCO, Goldman Sachs Credit Partners L.P., as joint lead arranger, joint book-runner and sole syndication agent, Wells Fargo Bank
National Association, as joint lead arranger, joint book-runner and sole administrative agent, and the lenders party thereto, as amended(2)
|10.2   |  | Distribution Center Lease, dated as of June 23, 1997, by and between PETCO and Knickerbocker Industrial Properties East LP, as amended, for 152 Dayton Jamesburg Road, South Brunswick, New Jersey(2)                                                                                                                                                                  
|10.3   |  | Distribution Center Lease, dated as of February 20, 1998, by and between PETCO and Industrial Developments International, Inc. for 3801 Rock Creek Boulevard, Joliet, Illinois(2)                                                                                                                                                                                      
|10.4   |  | Distribution Center Lease, dated as of November 24, 1997, by and between PETCO and Opus West Corporation for 4345 Parkhurst Street, Mira Loma, California(2)                                                                                                                                                                                                           
|10.5   |  | Master Equipment Lease Agreement, dated as of September 15, 1998, by and between PETCO and IBM Leasing(2)                                                                                                                                                                                                                                                              
|10.6   |  | Management Services Agreement, dated as of October, 2, 2000, by and among PETCO, Leonard Green & Partners, L.P. and TPG GenPar III, L.P.(2)                                                                                                                                                                                                                            
|10.7   |  | Amended and Restated Employment Agreement, dated as of October 2, 2000, by and between PETCO and Brian K. Devine(2)                                                                                                                                                                                                                                                    
|10.8   |  | Employment Agreement, dated as of October 2, 2000, by and between PETCO and Bruce C. Hall(2)                                                                                                                                                                                                                                                                           
|10.9   |  | Employment Agreement, dated as of October 2, 2000, by and between PETCO and James M. Myers(2)                                                                                                                                                                                                                                                                          
|10.10  |  | Form of Indemnification Agreement between PETCO and certain officers and directors(2)                                                                                                                                                                                                                                                                                  
|10.11  |  | Form of Retention Agreement for executive officers(2)                                                                                                                                                                                                                                                                                                                  
|10.12  |  | Form of Retention Agreement for non-executive officers(2)                                                                                                                                                                                                                                                                                                              
|10.13  |  | PETCO Animal Supplies 401(k) plan(2)                                                                                                                                                                                                                                                                                                                                   
|10.14  |  | PETCO Flexible Benefit Plan, amended and restated effective July 1, 1998(2)                                                                                                                                                                                                                                                                                            
|10.15  |  | The 1994 Stock Option and Restricted Stock Plan for Executive and Key Employees of PETCO Animal Supplies, Inc., as amended and restated as of October 2, 2000(2)                                                                                                                                                                                                       
|10.16  |  | Form of PETCO Animal Supplies, Inc. Non-qualified Stock Option Agreement(2)                                                                                                                                                                                                                                                                                            
|10.17  |  | Form of PETCO Animal Supplies, Inc. Incentive Stock Option Agreement(2)                                                                                                                                                                                                                                                                                                
|10.18  |  | Form of PETCO Animal Supplies, Inc. Restricted Stock Agreement(2)                                                                                                                                                                                                                                                                                                      
|10.19  |  | Agreement and Plan of Merger, dated as of May 17, 2000, by and between PETCO and BD Recapitalization Corp.(2)                                                                                                                                                                                                                                                          
|10.20  |  | First Amendment to Agreement and Plan of Merger, dated as of September 14, 2000, by and between PETCO and BD Recapitalization Corp.(2)                                                                                                                                                                                                                                 
|10.21  |  | Standard Industrial/Commercial Lease, dated as of February 28, 2001, by and between PETCO and Carol Canyon Properties, LLC for 8945 Rehco Road, San Diego, California(2)                                                                                                                                                                                               
|10.22  |  | PETCO Animal Supplies Deferred Compensation Plan(2)                                                                                                                                                                                                                                                                                                                    
|10.23  |  | 2002 Incentive Award Plan of PETCO Animal Supplies, Inc.(2)                                                                                                                                                                                                                                                                                                            
|10.24* |  | Consulting Agreement, effective as of November 29, 2001, by and between PETCO and Brian K. Devine                                                                                                                                                                                                                                                                      
|10.25* |  | Supplemental Executive Retirement Program, effective as of November 29, 2001, by and between PETCO and Brian K. Devine                                                                                                                                                                                                                                                 
|21.1   |  | Subsidiaries of PETCO(2)                                                                                                                                                                                                                                                                                                                                               
|23.1   |  | Consent of KPMG LLP, Independent Auditors                                                                                                                                                                                                                                                                                                                              
|24.1*  |  | Power of Attorney                                                                                                                                                                                                                                                                                                                                                      

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(d)  Financial Statement Schedules.

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or
notes thereto.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in San Diego, California, on the 30th day of April, 2002.

| |  | PETCO ANIMAL SUPPLIES, INC.
| |  | ---------------------------
| |  | By:                        

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INDEPENDENT AUDITORS' REPORT

The
Board of Directors and Stockholders
PETCO Animal Supplies, Inc.:

We
have audited the accompanying consolidated balance sheets of PETCO Animal Supplies, Inc. and subsidiaries as of February 3, 2001 and February 2, 2002, and the
related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended February 2, 2002. These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of PETCO Animal Supplies, Inc. and
subsidiaries as of February 3, 2001 and February 2, 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended
February 2, 2002, in conformity with accounting principles generally accepted in the United States of America.

| |  | /s/ KPMG LLP
| |  | ------------

San Diego, California
March 18, 2002

F-1

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PETCO ANIMAL SUPPLIES, INC.  CONSOLIDATED BALANCE SHEETS  (In thousands, except per share data)

|                                                                        |                                                                                                                                                                                        | February 3, 2001            |         | February 2, 2002 |         
|----------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------- | ---------------- | --------
|ASSETS (note 5)                                                         |                                                                                                                                                                                        |                             |         |                  |         
|Current assets:                                                         |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        | Cash and cash equivalents                                                                                                                                                              |                             | $       | 18,044           |         
|                                                                        | Receivables                                                                                                                                                                            |                             |         | 8,311            |         
|                                                                        | Inventories                                                                                                                                                                            |                             |         | 122,246          |         
|                                                                        | Deferred tax assets (note 10)                                                                                                                                                          |                             |         | 14,127           |         
|                                                                        | Other                                                                                                                                                                                  |                             |         | 7,760            |         
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        | Total current assets        |         |                  | 170,488 
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|Fixed assets (note 7):                                                  |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        | Equipment                                                                                                                                                                              |                             |         | 121,944          |         
|                                                                        | Furniture and fixtures                                                                                                                                                                 |                             |         | 71,133           |         
|                                                                        | Leasehold improvements                                                                                                                                                                 |                             |         | 144,848          |         
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        |                             | 337,925 |                  |         
|                                                                        | Less accumulated depreciation and amortization                                                                                                                                         |                             |         | (138,857         | )       
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        |                             | 199,068 |                  |         
|Debt issuance costs                                                     |                                                                                                                                                                                        |                             | 8,828   |                  |         
|Goodwill                                                                |                                                                                                                                                                                        |                             | 45,855  |                  |         
|Investment in affiliates (note 4)                                       |                                                                                                                                                                                        |                             | 19,447  |                  |         
|Other assets                                                            |                                                                                                                                                                                        |                             | 10,633  |                  |         
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        | $                           | 454,319 |                  | $       
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|LIABILITIES AND STOCKHOLDERS' DEFICIT                                   |                                                                                                                                                                                        |                             |         |                  |         
|Current liabilities:                                                    |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        | Accounts payable                                                                                                                                                                       |                             | $       | 45,511           |         
|                                                                        | Accrued expenses                                                                                                                                                                       |                             |         | 40,085           |         
|                                                                        | Accrued interest                                                                                                                                                                       |                             |         | 10,417           |         
|                                                                        | Accrued salaries and employee benefits                                                                                                                                                 |                             |         | 23,513           |         
|                                                                        | Current portion of long-term debt (note 5)                                                                                                                                             |                             |         | 5,250            |         
|                                                                        | Current portion of capital lease and other obligations (note 7)                                                                                                                        |                             |         | 6,189            |         
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        | Total current liabilities   |         |                  | 130,965 
|Long-term debt, excluding current portion (note 5)                      |                                                                                                                                                                                        |                             | 263,750 |                  |         
|Senior subordinated notes payable (note 6)                              |                                                                                                                                                                                        |                             | 109,856 |                  |         
|Capital lease and other obligations, excluding current portion (note 7) |                                                                                                                                                                                        |                             | 6,146   |                  |         
|Accrued store closing costs                                             |                                                                                                                                                                                        |                             | 3,424   |                  |         
|Deferred tax liability (note 10)                                        |                                                                                                                                                                                        |                             | 3,182   |                  |         
|Deferred rent and other liabilities                                     |                                                                                                                                                                                        |                             | 13,866  |                  |         
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        | Total liabilities           |         |                  | 531,189 
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|Preferred stock (note 8):                                               |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        | $.01 par value, 500 shares authorized, 111 and 78 shares issued and outstanding at February 2, 2002                                                                                    |                             |         |                  |         
|                                                                        | 14% Series A senior redeemable preferred stock                                                                                                                                         |                             |         | 112,669          |         
|                                                                        | 12% Series B junior redeemable preferred stock                                                                                                                                         |                             |         | 78,868           |         
|Stockholders' equity (deficit) (note 9):                                |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        | Common stock, $.001 par value, 50,000 shares authorized at February 3, 2001 and 38,194 and 39,117 shares issued and outstanding at February 3, 2001 and February 2, 2002, respectively |                             |         | 38               |         
|                                                                        | Additional paid-in capital                                                                                                                                                             |                             |         | (182,786         | )       
|                                                                        | Deferred compensation                                                                                                                                                                  |                             |         |                 |         
|                                                                        | Accumulated deficit                                                                                                                                                                    |                             |         | (85,659          | )       
|                                                                        | Accumulated comprehensive loss                                                                                                                                                         |                             |         |                 |         
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        | Total stockholders' deficit |         |                  | (268,407
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         
|Commitments and contingencies (notes 5, 6, 7 and 13)                    |                                                                                                                                                                                        |                             |         |                  |         
|                                                                        |                                                                                                                                                                                        | $                           | 454,319 |                  | $       
|                                                                        |                                                                                                                                                                                        |                             |         |                  |         

See accompanying notes to consolidated financial statements.

F-2

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PETCO ANIMAL SUPPLIES, INC.  CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands, except per share data)

|                                                                                                                 |                                                                                                                                 | Years Ended                      |        
|---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -------
|
|Net sales                                                                                                        |                                                                                                                                 | $                                | 990,289
|Cost of sales and occupancy costs                                                                                |                                                                                                                                 |                                  | 720,711
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 | Gross profit                                                                                                                    |                                  |        
|Selling, general and administrative expenses                                                                     |                                                                                                                                 |                                  | 220,800
|Write-off of Canadian investment (note 4)                                                                        |                                                                                                                                 |                                  |       
|Merger and non-recurring costs (note 3)                                                                          |                                                                                                                                 |                                  |       
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 | Operating income                                                                                                                |                                  |        
|Interest income                                                                                                  |                                                                                                                                 |                                  | (863   
|Interest expense                                                                                                 |                                                                                                                                 |                                  | 9,799  
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 | Earnings (loss) before Internet operations and equity in loss of unconsolidated affiliates, income taxes and extraordinary item |                                  |        
|Internet operations and equity in loss of unconsolidated affiliates (note 4)                                     |                                                                                                                                 |                                  | (1,254 
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 | Earnings (loss) before income taxes and extraordinary item                                                                      |                                  |        
|Income taxes (benefit) (note 10)                                                                                 |                                                                                                                                 |                                  | 16,831 
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 | Earnings (loss) before extraordinary item                                                                                       |                                  |        
|Extraordinary itemloss on extinguishment of debt (net of income tax benefit of $825 and $7,888) (notes 5 and 6) |                                                                                                                                 |                                  |       
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 | Net earnings (loss)                                                                                                             |                                  |        
|Increase in carrying amount of redeemable preferred stock                                                        |                                                                                                                                 |                                  |       
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 | Net earnings (loss) available to common stockholders                                                                            |                                  | $      
|                                                                                                                 |                                                                                                                                 |                                  |        
|Basic and diluted earnings (loss) per common share:                                                              |                                                                                                                                 |                                  |        
|                                                                                                                 | Earnings (loss) before extraordinary item                                                                                       |                                  | $      
|                                                                                                                 | Extraordinary loss on early extinguishment of debt                                                                              |                                  |        
|                                                                                                                 |                                                                                                                                 |                                  |        
|                                                                                                                 |                                                                                                                                 | Earnings (loss) per common share |        
|                                                                                                                 |                                                                                                                                 |                                  |        
|Shares used for computing basic earnings (loss) per share                                                        |                                                                                                                                 |                                  | 928,136
|                                                                                                                 |                                                                                                                                 |                                  |        
|Shares used for computing diluted earnings (loss) per share                                                      |                                                                                                                                 |                                  | 938,872
|                                                                                                                 |                                                                                                                                 |                                  |        

See
accompanying notes to consolidated financial statements.

F-3

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PETCO ANIMAL SUPPLIES, INC.  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)  (In thousands)

|                                                           |  | Common Stock |   |   |      |   |   |          |   |   |        | Total
Stockholders'
Equity/
(Deficit) |  
|---------------------------------------------------------- |  | ------------ | - | - | ---- | - | - | -------- | - | - | ------ | ------------------------------------- | -
|
|
|Balances at January 30, 1999                               |  | 927,256      |   | $ | 927  |   | $ | 269,991  |   | $ |       |                                       | $
|Exercise of options                                        |  | 1,452        |   |   | 1    |   |   | 291      |   |   |       |                                       |  
|Net earnings                                               |  |             |   |   |     |   |   |         |   |   |       |                                       |  
|                                                           |  |              |   |   |      |   |   |          |   |   |        |                                       |  
|Balances at January 29, 2000                               |  | 928,708      |   | $ | 928  |   | $ | 270,282  |   | $ |       |                                       | $
|Exercise of options                                        |  | 4,690        |   |   | 5    |   |   | 1,096    |   |   |       |                                       |  
|Issuance of common stock                                   |  | 31,988       |   |   | 32   |   |   | 15,841   |   |   |       |                                       |  
|Repurchase and retirement of common stock                  |  | (927,192     | ) |   | (927 | ) |   | (462,500 | ) |   |       |                                       |  
|Note receivable from officer for exercise of options       |  |             |   |   |     |   |   | (85      | ) |   |       |                                       |  
|Issuance of common stock warrants                          |  |             |   |   |     |   |   | 1,066    |   |   |       |                                       |  
|Accretion of redeemable preferred stock                    |  |             |   |   |     |   |   | (8,486   | ) |   |       |                                       |  
|Net loss                                                   |  |             |   |   |     |   |   |         |   |   |       |                                       |  
|                                                           |  |              |   |   |      |   |   |          |   |   |        |                                       |  
|Balances at February 3, 2001                               |  | 38,194       |   | $ | 38   |   | $ | (182,786 | ) | $ |       |                                       | $
|Exercise of options                                        |  | 923          |   |   | 1    |   |   | 123      |   |   |       |                                       |  
|Stock-based compensation                                   |  |             |   |   |     |   |   | 23,934   |   |   | (9,288 | )                                     |  
|Amortization of deferred compensation                      |  |             |   |   |     |   |   |         |   |   | 849    |                                       |  
|Notes receivable from stockholders for exercise of options |  |             |   |   |     |   |   | (906     | ) |   |       |                                       |  
|Accretion of redeemable preferred stock                    |  |             |   |   |     |   |   | (27,745  | ) |   |       |                                       |  
|Unrealized loss on hedge                                   |  |             |   |   |     |   |   |         |   |   |       |                                       |  
|Net loss                                                   |  |             |   |   |     |   |   |         |   |   |       |                                       |  
|                                                           |  |              |   |   |      |   |   |          |   |   |        |                                       |  
|Balances at February 2, 2002                               |  | 39,117       |   | $ | 39   |   | $ | (187,380 | ) | $ | (8,439 | )                                     | $
|                                                           |  |              |   |   |      |   |   |          |   |   |        |                                       |  

See accompanying notes to consolidated financial statements.

F-4

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PETCO ANIMAL SUPPLIES, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands)

|                                                     |                                                                             | Years Ended                            |                                                    
|---------------------------------------------------- | --------------------------------------------------------------------------- | -------------------------------------- | ---------------------------------------------------
|
|Cash flows from operating activities:                |                                                                             |                                        |                                                    
|                                                     | Net earnings (loss)                                                         |                                        | $                                                  
|                                                     | Depreciation and amortization                                               |                                        |                                                    
|                                                     | Provision for deferred and other taxes                                      |                                        |                                                    
|                                                     | Internet operations and equity in loss of unconsolidated affiliates         |                                        |                                                    
|                                                     | Stock-based compensation                                                    |                                        |                                                    
|                                                     | Non-cash write-off of investment in affiliate                               |                                        |                                                    
|                                                     | Loss on retirement of fixed assets                                          |                                        |                                                    
|                                                     | Non-cash write-off of debt issuance costs                                   |                                        |                                                    
|                                                     | Changes in assets and liabilities, net of effects of purchase acquisitions: |                                        |                                                    
|                                                     |                                                                             | Receivables                            |                                                    
|                                                     |                                                                             | Inventories                            |                                                    
|                                                     |                                                                             | Other assets                           |                                                    
|                                                     |                                                                             | Accounts payable                       |                                                    
|                                                     |                                                                             | Accrued expenses                       |                                                    
|                                                     |                                                                             | Accrued interest                       |                                                    
|                                                     |                                                                             | Accrued salaries and employee benefits |                                                    
|                                                     |                                                                             | Accrued store closing costs            |                                                    
|                                                     |                                                                             | Deferred rent and other liabilities    |                                                    
|                                                     |                                                                             |                                        |                                                    
|                                                     |                                                                             |                                        | Net cash provided by operating activities          
|                                                     |                                                                             |                                        |                                                    
|Cash flows from investing activities:                |                                                                             |                                        |                                                    
|                                                     | Additions to fixed assets                                                   |                                        |                                                    
|                                                     | Investment in affiliates                                                    |                                        |                                                    
|                                                     | Net cash invested in acquisitions of businesses                             |                                        |                                                    
|                                                     | Loans to employees                                                          |                                        |                                                    
|                                                     | Repayment of loan to affiliate                                              |                                        |                                                    
|                                                     | Change in other assets                                                      |                                        |                                                    
|                                                     |                                                                             |                                        |                                                    
|                                                     |                                                                             |                                        | Net cash used in investing activities              
|                                                     |                                                                             |                                        |                                                    
|Cash flows from financing activities:                |                                                                             |                                        |                                                    
|                                                     | Borrowings under long-term debt agreements                                  |                                        |                                                    
|                                                     | Repayment of long-term debt agreements                                      |                                        |                                                    
|                                                     | Debt issuance costs                                                         |                                        |                                                    
|                                                     | Repayment of capital lease and other obligations                            |                                        |                                                    
|                                                     | Repurchase of common stock                                                  |                                        |                                                    
|                                                     | Net proceeds from the issuance of common stock                              |                                        |                                                    
|                                                     | Net proceeds from the issuance of Series A redeemable preferred Stock       |                                        |                                                    
|                                                     | Net proceeds from the issuance of Series B redeemable preferred Stock       |                                        |                                                    
|                                                     | Proceeds from the issuance of common stock warrants                         |                                        |                                                    
|                                                     |                                                                             |                                        |                                                    
|                                                     |                                                                             |                                        | Net cash provided by (used in) financing activities
|                                                     |                                                                             |                                        |                                                    
|Net increase/(decrease) in cash and cash equivalents |                                                                             |                                        | 33,735                                             
|Cash and cash equivalents at beginning of year       |                                                                             |                                        | 2,324                                              
|                                                     |                                                                             |                                        |                                                    
|Cash and cash equivalents at end of year             |                                                                             | $                                      | 36,059                                             
|                                                     |                                                                             |                                        |                                                    
|Supplemental cash flow disclosures:                  |                                                                             |                                        |                                                    
|                                                     | Interest paid on debt                                                       |                                        | $                                                  
|                                                     | Income taxes paid                                                           |                                        | $                                                  

See accompanying notes to consolidated financial statements.

F-5

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PETCO ANIMAL SUPPLIES, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (In thousands, except per share data or as otherwise noted)

1. Summary of Significant Accounting Policies

(a) Description of Business:

PETCO Animal Supplies, Inc., (the "Company" or "PETCO") a Delaware corporation, is a national specialty retailer of premium pet food and supplies with
stores in 41 states and the District of Columbia.

(b) Basis of Presentation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Investments in affiliates are accounted for using the
equity method. All significant intercompany accounts and transactions have been eliminated.

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.

(c) Common Stock Split:

Following the recapitalization transaction described in Note 2, the Company effected a 22-for-1 split of its common stock.
Historical share information prior to the recapitalization transaction has been retroactively restated to reflect the stock split for all periods presented.

Additionally,
prior to the completion of the Company's initial public offering on February 27, 2002, the Company effected a 2-for-1 stock split of its
common stock. All share information in the consolidated financial statements has been retroactively restated to reflect the stock split for all periods presented.

(d) Fiscal Year:

The Company's fiscal year ends on the Saturday closest to January 31, resulting in years of either 52 or 53 weeks. The fiscal year ended February 3,
2001 consisted of 53 weeks. All other fiscal years presented herein consisted of 52 weeks. All references to a fiscal year refer to the fiscal year ending on the Saturday closest to January 31
of the following year.

(e) Cash Equivalents:

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents.

(f) Inventories:

Inventories are stated at the lower of cost, determined by the first-in, first-out method, or market.

(g) Pre-opening Costs:

Costs incurred in connection with opening new stores are expensed as incurred.

F-6

---

(h) Fixed Assets:

Fixed assets are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally five
to ten years. Equipment under capital leases is stated at the present value of minimum lease payments at the inception of the lease. Amortization is computed using the straight-line method
over the lesser of the lease term or the estimated useful lives of the assets, generally five to fifteen years.

(i) Goodwill and Long-Lived Assets:

Costs in excess of net assets of acquired businesses is amortized on the straight-line method over three to fifteen years. The carrying value of
goodwill is reviewed on a periodic basis for recoverability based on expectations for future undiscounted cash flows from the related operations. Should the review indicate that goodwill is not
recoverable, the Company adjusts the goodwill to the extent carrying value exceeds the fair value of the goodwill. Reviews of carrying values of goodwill resulted in write-downs of $19 and $501 in
fiscal 1999 and fiscal 2000, respectively, related to planned store closures. During fiscal 2001 there were no goodwill write-downs. Accumulated amortization at February 3, 2001 and
February 2, 2002 was $17,362 and $22,354, respectively.

In
addition, the Company periodically assesses long-lived assets for impairment under Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," based on expectations of future undiscounted cash flows from the related operations, and when
circumstances dictate, adjusts the asset to the extent carrying value exceeds the fair value of the asset. These factors, along with management's plans with respect to the operations, are considered
in assessing the recoverability of goodwill, other purchased intangibles and property and equipment. Assessments of long-lived assets resulted in write-downs of fixed assets of $396,
$2,457 and $858 during fiscal 1999, 2000 and 2001, respectively. These write-downs relate to store furnishings, equipment and leasehold improvements for planned store closures and are recorded as
selling, general, and administrative expenses in the accompanying statement of operations.

(j) Other Assets:

The Company had a secured loan to another limited partner in a limited partnership which operates retail pet food and supply stores in Canada. The loan bore
interest at 7.5% and was repaid in full on January 28, 2002.

The
remainder of other assets consists primarily of lease deposits, non-compete agreements and prepaid expenses. Non-compete agreements are amortized using the
straight-line method over the periods of the
agreements, generally five to seven years. Accumulated amortization for intangible other assets at February 3, 2001 and February 2, 2002 was $1,203 and $1,513, respectively.

(k) Debt Issuance Costs:

Debt issuance costs are amortized to interest expense using the effective interest method over the life of the related debt. Accumulated amortization for debt
issuance costs at February 3, 2001 and February 2, 2002 was $614 and $1,549, respectively.

(l) Store Closing Costs:

Management continually reviews the ability of stores to provide positive contributions to the Company's results. The Company charges costs associated with store
closures to operations upon commitment to close a store within the next 12 months. Store closing costs consist of future lease obligations, property taxes and common area maintenance costs, net
against contractual sub-lease income and are recorded as selling, general, and administrative expenses in the accompanying

F-7

---

statement of operations. For the fiscal years 1999, 2000, and 2001 store closing costs charged to operations were $110, $90, and $260, respectively.

(m) Income Taxes:

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

(n) Fair Value of Financial Instruments:

Because of their short maturities, the carrying amounts for cash and cash equivalents, receivables, accounts payable, accrued expenses, accrued interest and
accrued salaries and employee benefits approximate fair value. The carrying amounts for long-term debt and other obligations approximate fair value as the interest rates and terms are
substantially similar to those that could be obtained currently for similar instruments.

The
Company uses an interest rate collar agreement to manage interest rate exposure. At February 2, 2002, the Company had a $75,000 notional amount interest rate collar using a
floating index of one-month LIBOR contracts at an interest rate cap of 7.00% and an interest rate floor of 5.43%, expiring in December 2002. The interest rate differential to be
paid, if interest rates are less than the interest rate floor, or received, if interest rates rise above the interest rate cap, is recognized quarterly as a component of interest expense or interest
income over the life of the agreement.

(o) Stock Options:

The Company accounts for stock option plans in accordance with the provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations which recognizes compensation expense on the grant date if the current market price of the stock exceeds the exercise price. The Company adopted the
disclosure provisions of SFAS No. 123, "Accounting for Stock-Based Compensation."

(p) Comprehensive Income:

SFAS No. 130, "Reporting Comprehensive Income" requires that certain items of comprehensive income other than net earnings or loss be reported in the
financial statements. During fiscal 2001, the Company recorded $1,467, net of tax benefit of $820, to other comprehensive loss related to the decline in fair value of the Company's interest rate
hedge.

(q) Revenue Recognition:

Revenue from sales of the Company's products is recognized at the point of sale for retail stores and at the time of shipment for e-commerce sales.
Shipping terms for e-commerce sales are FOB shipping point.

(r) Segment Reporting:

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," requires annual and interim reporting for an enterprise's operating
segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a

F-8

---

component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the chief
operating decision maker in deciding how to allocate resources. All of the Company's stores are aggregated into one reportable segment given the similarities of economic characteristics between the
operations represented by the stores and the common nature of the products, customers and methods of distribution.

(s) Reclassifications:

Certain previously reported amounts have been reclassified to conform with the current period presentation.

(t) Effect of Accounting Changes:

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," which
establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS No. 133 requires that an entity recognize all derivatives as either assets or liabilities
in the balance sheet, and measure those instruments at fair value. Accounting for changes in the fair value of a derivative depends on the intended use and resulting designation of the derivative. For
derivatives designated as hedges, changes in the fair value are either offset against the change in fair value of the assets or liabilities through earnings or recognized in other comprehensive income
in the balance sheet. The Company maintains a $75.0 million interest rate collar agreement, or hedge, to limit its exposure to the interest rate risk associated with variable rate debt. During
the fiscal year ended February 2, 2002, the Company recorded $1,467, net of tax benefit of $820, to other comprehensive loss in the balance sheet related to the decline in fair value of the
derivative.

(u) Earnings (Loss) per Share:

Basic net earnings (loss) per common share is computed using the weighted average number of common shares outstanding during the period. Diluted net earnings
(loss) per common share
incorporates the incremental shares issuable upon the assumed exercise of potentially issuable common stock.

Net
earnings (loss) and weighted average common shares used to compute net earnings (loss) per common share, basic and diluted, are presented below:

|                                                     |  | Years Ended |        
|---------------------------------------------------- |  | ----------- | -------
|
|Net earnings (loss) available to common stockholders |  | $           | 21,757 
|                                                     |  |             |        
|Common shares, basic                                 |  |             | 928,136
|Dilutive effect of stock options                     |  |             | 10,736 
|                                                     |  |             |        
|Common shares, diluted                               |  |             | 938,872
|                                                     |  |             |        

Warrants
to purchase 2,132 shares of common stock were outstanding at February 3, 2001 and February 2, 2002, but were not included in the computation of diluted earnings
(loss) per common share because the conversion would have an antidilutive effect on diluted earnings (loss) per common share. Options to purchase common shares that were outstanding but not included
in the computation of diluted earnings (loss) per common share because the conversion would have an antidilutive effect were 111,320, 1,452 and 1,355 for the fiscal years ended 1999, 2000 and 2001,
respectively.

F-9

---

2. Recapitalization

During fiscal 2000, the Company entered into a merger and recapitalization agreement with BD Recapitalization Corp. ("BD"), an entity formed for that purpose by
the sponsors of the merger and recapitalization transaction, Leonard Green & Partners, L.P. and Texas Pacific Group. In the merger, each issued and outstanding share of the Company's common
stock was cancelled and converted automatically into the right to receive $0.50 per share in cash, with the exception of 5,911 shares retained by members of the Company's management. In
October 2000, following approval of the transaction by the stockholders of the Company, BD completed the merger and recapitalization of the Company by investing $190.0 million in common
and preferred stock, arranging financing in the form of a new credit facility and senior subordinated notes, retiring debt under the existing credit facility and repurchasing each share of outstanding
common stock, other than the 5,911 shares held by management, for an aggregate of $463,427. Net proceeds from the issuance of new shares of common stock in the merger and recapitalization was $15,873.
Following the merger and recapitalization the Company effected a 22-for-1 split of its common stock. This merger was accounted for as a recapitalization and as such, a
step-up of assets to fair market value was not required.

During
fiscal 2000, transaction costs of $19,771 were incurred and expensed related to the recapitalization. Additionally, financing costs of $11,254 have been deferred and are being
amortized over the lives of the new debt facilities.

3. Business Combinations

During fiscal 1999, the Company completed one acquisition of a retailer of pet food and supplies in a transaction accounted for as a purchase. The aggregate fair
value of assets acquired and the net cash invested in this business was $2,623, of which $7 was expended in fiscal 2000. The excess of the aggregate cost over the fair value of net assets acquired was
$1,468, which was recorded as goodwill and is being amortized over fifteen years. A summary of the assets acquired and liabilities assumed in the acquisition follows:

Fair Value(in thousands)Inventory

$
150Intangible assets


600Fixed assets


640Goodwill


1,468Other liabilities


(235
)Purchase Price

$
2,623


During
fiscal 2000, the Company completed one acquisition of a retailer of pet food and supplies in a transaction accounted for as a purchase. The aggregate fair value of assets acquired
and the net cash invested in the business was $12,575. The excess of the aggregate cost over the fair value of net assets acquired was $10,926, which was recorded as goodwill and is being amortized
over fifteen years. A summary of the assets acquired and liabilities assumed in the acquisition follows:

Fair Value(in thousands)Inventory

$
1,925Fixed assets


775Goodwill


10,926Other liabilities


(1,051
)Purchase price

$
12,575


F-10

---

Additionally,
during fiscal 2000, the Company completed the acquisition of certain operating assets of Petopia.com, an e-commerce destination for pet food and supplies in a
transaction accounted for as a purchase. The aggregate fair value of assets acquired was $3,825. The excess of the aggregate cost over the fair value of net assets acquired was $3,126, which was
recorded as goodwill and is being amortized over three years. A summary of the assets acquired and liabilities assumed in the acquisition follows:

Fair Value(in thousands)Inventory

$
120Fixed assets


1,199Other assets


210Goodwill


3,126Other liabilities


(830
)Purchase price

$
3,825


The
consolidated financial statements include the operating results from the closing date for each respective purchase acquisition. The purchase acquisitions during fiscal years 1999 and
2000 did not materially affect results of operations and accordingly, pro-forma results are not presented.

In
fiscal 2000, merger and non-recurring costs of $55,928 were recorded. These costs consisted of $19,771 of transaction costs related to the recapitalization, compensation
expense of $22,254 related to the repurchase of outstanding options for common stock in the recapitalization of the Company, the write-off of $10,206 with respect to an investment in an
affiliate and $3,697 in expenses related to the settlement of existing shareholder lawsuits and shareholder lawsuits related to the recapitalization of the Company.

In
fiscal 2001, merger and non-recurring costs of $445 were recorded, consisting of legal costs related to the recapitalization and costs incurred in closing Petopia.com's
facilities.

4. Investment in Affiliates

During fiscal 1999, the Company acquired an equity interest in Petopia.com, an e-commerce destination for the sale of pet food and supplies. The
Company accounted for its investment in Petopia.com using the equity method and recorded its proportionate share of earnings or loss. The Company recognized $4,021 and $11,498 in equity in losses for
fiscal 1999 and 2000, respectively. The Company also provided certain marketing and fulfillment services to Petopia.com according to the terms of a strategic alliance agreement, under which the
Company earned revenue and additional equity and incurred expenses. The net revenue from these activities are included in Internet operations and equity in loss of unconsolidated affiliates in fiscal
years 1999 and 2000 in the amounts of $2,767 and $10,208, respectively. The Company wrote off its investment in Petopia.com of $10,206 in fiscal 2000, reflected in merger and non-recurring
costs, due to Petopia.com's pending liquidation and wrote off $1,321 in receivables due from Petopia.com, reflected in Internet operations and equity in loss of unconsolidated affiliates.
Subsequently, the Company acquired certain operating assets of that entity and recorded $1,455 in transition costs in Internet operations and equity in loss of unconsolidated affiliates, in relocating
Petopia.com's operating assets to the Company's national support center (see Note 3).

The
Company had a 72% limited partner interest in a limited partnership (the "LP") which operates retail pet food and supply stores in Canada. On January 28, 2002, the Company
terminated its relationship with Canadian Petcetera Limited Partnership (the Partnership) and entered into a settlement agreement in connection with the resolution of a dispute with the other partners
in the Partnership. In connection with the settlement agreement, the Company transferred all of its limited

F-11

---

partnership interest in the Partnership to an affiliate of the general partner and paid a settlement fee of $10.3 million. In conjunction with the termination of its relationship with the
Partnership, the Company recorded a write-off of $26.7 million in fiscal year 2001, consisting of $26.1 million carrying value of its investment in the Partnership and
$0.6 million of related assets, and recorded settlement expense of approximately $10.3 million. The Company accounted for its investment in the LP using the equity method as it does not
exercise control over the LP and recorded its proportionate share of earnings or loss according to the partnership agreement. The Company did not record any earnings or loss for the year ended
January 29, 2000 and recorded losses of $477 and $3,083 for the years ended February 3, 2001 and February 2, 2002 respectively, which are included in Internet operations and
equity in loss of unconsolidated affiliates in the accompanying consolidated statements of operations.

5. Long-Term Debt

At January 29, 2000, the Company had a credit facility with a syndicate of banks with a commitment of up to $150.0 million consisting of
$100.0 million in term loans and $50.0 million in revolving loans. This credit facility was retired during fiscal 2000 in connection with the merger and recapitalization and related
unamortized debt issuance costs were written off resulting in an extraordinary expense of $1,264 (net of income tax benefit of $825).

In
October 2000 in connection with the merger and recapitalization, the Company obtained credit facilities consisting of $270 million in term loans and an $80 million
revolving credit facility which expire between October 2, 2006 and October 2, 2008.

In
October 2001, the Company amended its senior credit facility to reduce the revolving credit facility to $75 million and to restructure the term loans into a single
$195 million term loan that expires between October 2, 2006 and October 2, 2008. Borrowings under the senior credit facility are secured by substantially all of the Company's
assets and currently bear interest, at the Company's option, at the agent bank's base rate plus a margin of up to 2.25%, or LIBOR plus a margin of up to 3.25%, based on the leverage ratio at the time
in the case of the revolving credit facility and a fixed margin in the case of the term loan B facility. The effective interest rate of these borrowings at February 2, 2002 was 5.33% to 5.37%.
The credit agreement contains certain affirmative and negative covenants related to indebtedness, interest and fixed charges coverage and consolidated net worth. The Company was in full compliance
with all these covenants at February 2, 2002.

In
fiscal 2001, the Company recorded an extraordinary loss on early extinguishment of debt totaling $805 consisting of the write-off of $1,295 in unamortized debt discount,
net of a tax benefit of $490. The Company recorded an additional extraordinary loss on early extinguishment of debt related to the redemption of Senior Subordinated Notes as discussed in
note 6.

F-12

---

Long-term debt consists of:

|                     |  | February 3,
2001 |         | February 2,
2002
|-------------------- |  | ---------------- | ------- | ----------------
|Revolving loans      |  | $                |        |                 
|Term loans           |  |                  | 269,000 |                 
|                     |  |                  |         |                 
|                     |  |                  | 269,000 |                 
|Less current portion |  |                  | 5,250   |                 
|                     |  |                  |         |                 
|                     |  | $                | 263,750 |                 
|                     |  |                  |         |                 

Annual
maturities of long-term debt for the next five fiscal years are as follows: $2,000, $2,000, $2,000, $2,000 and $25,000.

6. Senior Subordinated Notes

At February 3, 2001, the Company had $120 million Senior Subordinated Notes maturing on October 1, 2010. Interest on the Senior Subordinated
Notes accrued at a rate of 13% per annum. In connection with the issuance of the Senior Subordinated Notes, the purchaser received Series A and Series B redeemable preferred stock, with
a fair value of $9,421 and warrants for the purchase of 2,132 shares of
common stock of the Company, at an exercise price of $0.001 per share, with a fair value of $1,066. The fair value of the preferred stock and warrants was reflected as a discount to the Senior
Subordinated Notes and was being amortized to interest expense over ten years. The warrants are exercisable at any time.

In
October 2001, these Notes were redeemed in full and the Company recorded an extraordinary loss on early extinguishment of debt totaling $12,137 consisting of a $8,400
prepayment penalty, the write-off of $1,677 in unamortized debt discount, and the write-off of $9,458 in unamortized debt issuance costs, net of a tax benefit of $7,398.

In
October 2001, the Company issued $200 million Senior Subordinated Notes maturing on November 1, 2011. Interest on the Senior Subordinated Notes accrues at a rate
of 10.75% per annum and is payable semi-annually. The Company may redeem the Senior Subordinated Notes at its option at any time after November 1, 2006, in whole or in part, based
upon an agreed upon schedule of redemption prices. At any time before November 1, 2004, up to 35% of the aggregate principal amount of the Senior Subordinated Notes may be redeemed from the
proceeds of a qualifying public offering of common stock of the Company at a redemption price of 110.75% of the principal amount of the Senior Subordinated Notes redeemed, plus accrued interest.

7. Lease Commitments and Other Obligations

The Company finances certain fixed assets under capital leases. There are approximately $24,237 and $20,253 in fixed assets financed through capital leases at
February 3, 2001 and February 2, 2002, respectively. Accumulated amortization related to these financed assets was approximately $11,808 and $13,083 at February 3, 2001 and
February 2, 2002, respectively.

The
Company leases warehouse and store facilities and equipment under operating leases. These operating leases generally have terms from three to ten years. Certain store leases include
additional contingent rental payments ranging from 2% to 6% of store revenues above defined levels. Contingent rentals during fiscal years 1999, 2000, and 2001 were $68, $77 and $86, respectively.

F-13

---

At
February 3, 2001, the present value of future minimum payments for capital lease and other obligations, and minimum lease payments under noncancelable operating leases were as
follows:

|Years                                                                    |  | Capital
Leases and
Other
Obligations |       | Operating
Leases
|------------------------------------------------------------------------ |  | ------------------------------------ | ----- | ----------------
|2002                                                                     |  | $                                    | 4,871 |                 
|2003                                                                     |  |                                      | 271   |                 
|2004                                                                     |  |                                      | 262   |                 
|2005                                                                     |  |                                      | 253   |                 
|2006                                                                     |  |                                      | 1,767 |                 
|Thereafter                                                               |  |                                      |      |                 
|                                                                         |  |                                      |       |                 
|Total minimum payments                                                   |  |                                      | 7,424 |                 
|                                                                         |  |                                      |       |                 
|Less amount representing interest                                        |  |                                      | 767   |                 
|                                                                         |  |                                      |       |                 
|Present value of net minimum capital lease and other obligation payments |  |                                      | 6,657 |                 
|Less current portion of capital lease and other obligations              |  |                                      | 4,552 |                 
|                                                                         |  |                                      |       |                 
|Capital lease and other obligations                                      |  | $                                    | 2,105 |                 
|                                                                         |  |                                      |       |                 

Rent
expense under operating leases for fiscal years 1999, 2000, and 2001 was approximately $89,352, $103,637 and $115,906, respectively.

8. Preferred Stock

The authorized number of shares of preferred stock at February 2, 2002 was 500 with a par value of $.01 per share. During fiscal 2000, the Board of
Directors authorized the issuance of two series of redeemable preferred stock.

Series A
senior redeemable exchangeable cumulative preferred stock ("Series A Preferred") has 111 shares authorized and issued at February 2, 2002 and liquidation
preference of $1,000 per share plus accrued and unpaid dividends. Dividends are 14% per year, payable quarterly whether or not declared by the Company's Board of Directors, and if not paid in cash,
will accumulate as additional liquidation preference. Dividends will accrue on such additional liquidation preference. The Series A Preferred ranks senior to all other classes of the Company's
capital stock. The Company is required to redeem the shares of Series A Preferred in whole after 12 years at the liquidation preference, together with accumulated but unpaid dividends.
The terms of the Series A Preferred allow the Company to redeem shares of Series A Preferred before the mandatory redemption date at specified redemption prices and also allow the
Company to exchange shares of the Series A Preferred for debt securities under some circumstances. The holders of the Series A Preferred generally have no voting rights, except in
limited circumstances.

Series B
junior redeemable cumulative preferred stock ("Series B Preferred") has 78 shares authorized and issued at February 2, 2002 and liquidation preference of
$1,000 per share plus accrued and unpaid dividends. Dividends are 12% per year, payable quarterly whether or not declared by the Company's Board of Directors, and if not paid in cash, will accumulate
as additional liquidation preference. Dividends will accrue on such additional liquidation preference. The Series B Preferred ranks senior to all classes of the Company's common stock and ranks
junior to the Series A Preferred. The Company is required to redeem the shares of Series B Preferred in whole after 12 years at the liquidation preference, together with
accumulated but unpaid dividends. The terms of the Series B Preferred allow the Company to redeem shares of the Series B Preferred before the mandatory redemption date at specified
redemption prices. The holders of the Series B Preferred generally have no voting rights, except in limited circumstances. Subsequent to February 2, 2002, all Series A Preferred

F-14

---

and Series B Preferred was redeemed in connection with an initial public offering as more fully described in Note 14.

The
Board of Directors has not declared any dividend with respect to either series of preferred stock. Accumulated undeclared dividends as of February 2, 2002 were $22,379 and
$13,370 for the Series A Preferred and Series B Preferred, respectively. The accretion of these dividends is reflected in the accompanying consolidated statement of stockholders' equity
and is included in the carrying values of the preferred stock in the accompanying consolidated balance sheet.

9. Equity

(a) Common Stock:

The authorized number of shares at January 29, 2000 was 100,000 with a par value of $0.0001. During fiscal 2000, a merger and recapitalization of the
Company was completed, in which the authorized number of shares was established as 50,000 with a par value of $0.001 (Note 2).

(b) Stock Options:

In February 1994, the Company's stockholders approved the 1994 Stock Option Plan ("1994 Company Plan") which provides for the granting of stock options,
stock appreciation rights or restricted stock with respect to shares of common stock to executives and other key employees. Stock options may be granted in the form of incentive stock options or
non-statutory stock options and are exercisable for up to ten years following the date of grant. Stock option exercise prices must be equal to or greater than the fair market value of the
common stock on the grant date. In June 1996, the Company's stockholders approved an amendment to the 1994 Company Plan to increase the number of shares available for issuance under the plan
for each of the next five fiscal years by 3.0% of the number of shares of common stock issued and outstanding as of the end of the immediately preceding fiscal year. During fiscal 2000, as part of the
merger and recapitalization transaction, with the exception of 1,727 options, all options previously issued under the plan were cancelled and options with exercise prices of less than $0.50 were
repurchased from their holders.

In
February 1994, the Company's stockholders approved the Directors 1994 Stock Option Plan ("Directors Plan") which provides for the granting of common stock options to directors.
Stock option exercise prices must be equal to the fair market value of the common stock on the grant date. In June 1995, the Company's stockholders approved an amendment to the Directors Plan
to increase the number of shares available for issuance under the plan for each of the next five fiscal years by 0.1% of the number of shares of common stock issued and outstanding as of the end of
the immediately preceding fiscal year. During fiscal 2000, as part of the merger and recapitalization transaction, all options previously issued under the plan were cancelled and options with exercise
prices of less than $0.50 were repurchased from their holders. At February 3, 2001 there were no options outstanding under the plan and no further grants will be made.

In
1996, the Company assumed an employee stock option plan ("1993 Company Plan") from Pet Food Warehouse which provided for the granting of incentive and nonqualified stock options with
exercise prices equal to their fair market values on their grant dates that become exercisable over various periods and expire five or six years after the date of grant. The common shares and exercise
prices under this plan were adjusted based on the common share conversion rate per the merger agreement with Pet Food Warehouse. During fiscal 2000, as part of the merger and recapitalization
transaction, all options previously issued under the plan were cancelled and options with exercise prices of less than $0.50 were repurchased from their holders. At February 2, 2002 there were
no options outstanding under the plan and no further grants will be made.

F-15

---

In
1997, the Company assumed an employee stock option plan ("1989 Company Plan") from PetCare which provided for the granting of incentive and non-qualified stock options
with exercise prices equal to their fair market values on their grant dates that became exercisable over various periods and expire up to ten years after the date of grant. The common shares and
exercise prices under this plan were adjusted in accordance with the terms of the merger agreement with PetCare. During fiscal 2000, as part of the merger and recapitalization transaction, all options
previously issued under the plan were cancelled and options with exercise prices of less than $0.50 were repurchased from their holders. At February 3, 2001 there were no options outstanding
under the plan and no further grants will be made.

Compensation
expense of $22,254 related to the repurchase of outstanding options for common stock in the recapitalization is reflected in merger and non-recurring costs in
fiscal 2000. Information regarding the stock option plans follows:

|                                                           |           | All Company Plans
|---------------------------------------------------------- | --------- | -----------------
|
|Outstanding at January 30, 1999                            |           | 91,456           
|                                                           | Granted   |                  
|                                                           | Exercised |                  
|                                                           | Cancelled |                  
|                                                           |           |                  
|Outstanding at January 29, 2000                            |           | 111,295          
|Fiscal 2000 activity prior to merger and recapitalization: |           |                  
|                                                           | Granted   |                  
|                                                           | Exercised |                  
|                                                           | Cancelled |                  
|                                                           |           |                  
|Outstanding prior to merger and recapitalization           |           | 1,727            
|                                                           |           |                  

In
fiscal 2000, in connection with the merger and recapitalization of the company, the 1994 Company Plan was amended and restated to modify the total number of shares available for
issuance under the plan to 2,339. Under the terms of the recapitalization, the 1,727 options not repurchased were converted into 1,215 options, and the exercise prices were adjusted, to preserve the
economic value of the options for the holders.

Information
regarding the 1994 Company Plan, as amended, subsequent to the merger and recapitalization follows:

|                                                                |           | Shares |      | Option Price
Per Share |            | Weighted Average
Exercise Price
|--------------------------------------------------------------- | --------- | ------ | ---- | ---------------------- | ---------- | -------------------------------
|Outstanding subsequent to merger and recapitalization           |           | 1,215  |      | $                      | 0.10       |                                
|Fiscal 2000 activity subsequent to merger and recapitalization: |           |        |      |                        |            |                                
|                                                                | Granted   |        | 525  |                        | $          | 0.50                           
|                                                                | Exercised |        | (289 | )                      | $          | 0.10                           
|                                                                |           |        |      |                        |            |                                
|Outstanding at February 3, 2001                                 |           | 1,451  |      | $                      | 0.10-$0.50 |                                
|                                                                | Granted   |        | 882  |                        | $          | 0.50-$4.45                     
|                                                                | Exercised |        | (923 | )                      | $          | 0.10-$0.50                     
|                                                                | Cancelled |        | (55  | )                      | $          | 0.10-$0.10                     
|                                                                |           |        |      |                        |            |                                
|Outstanding at February 2, 2002                                 |           | 1,355  |      | $                      | 0.10-$4.45 |                                
|                                                                |           |        |      |                        |            |                                

F-16

---

(c) Accounting for Stock Options:

The Company accounts for stock option plans under APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Prior to
fiscal year 2001, had compensation costs for the Company's stock option plans been determined based upon the fair value at the grant date for awards under these plans, consistent with the methodology
prescribed under SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's net earnings would have been decreased by $3,521 during 1999 and the Company's net loss would have
increased by $2,815 and $137 during 2000 and 2001. The weighted average fair value of the options granted during 1999, 2000 and 2001 were estimated as $0.10, $0.13 and $0.56 on the date of grant using
the Black-Scholes option pricing model with the following assumptions: no dividend yield, volatility of 62.1%, 49.5% and 57.5%, risk-free interest rate of 6.0%, 5.8% and 3.7% for 1999,
2000 and 2001, respectively, and an expected life of five years for all grants for 1999 and 2000, and three years for 2001.

In
connection with fixed plan stock option awards granted to employees in fiscal 2001, the Company recorded deferred compensation of $9,288 equal to the aggregate differences between the
exercise prices of the options granted and the deemed fair value for accounting purposes. Deferred compensation is amortized over the vesting periods of the options, generally five years. During
fiscal 2001 the Company recorded amortization in the amount of $849. For variable plan awards, the
Company recorded stock-based compensation of $16,502 based on the changes in the deemed fair value of the common stock.

Total
stock-based compensation for fiscal 2001 was $17,351 and is recorded as cost of sales and occupancy costs and selling, general and administrative costs in the amount of $3,001 and
$14,350, respectively, in the accompanying statement of operations.

The
following table summarizes information about the options outstanding under the stock option plan at February 2, 2002:

Options Outstanding

Options ExercisableRange of
Exercise
Prices

Number Outstanding

Weighted Average
Remaining
Contractual
Life (Years)

Weighted
Average
Exercise
Price

Number
Exercisable

Weighted
Average
Exercise
Price$0.10-$0.10

25

8.01

$
0.10

25

$
0.100.50-  0.50

547

8.37


0.50

28


0.500.61-  0.61

615

9.55


0.61

144


0.614.45-  4.45

168

9.94


4.45

65


4.45$0.10-$4.45

1,355

9.10

$
1.03

262

$
1.50


10. Income Taxes

Income taxes (benefit) consists of the following:

|                                                 |         | Years Ended |       
|------------------------------------------------ | ------- | ----------- | ------
|
|Current:                                         |         |             |       
|                                                 | Federal |             | $     
|                                                 | State   |             |       
|                                                 |         |             |       
|                                                 |         |             | 1,984 
|                                                 |         |             |       
|Deferred:                                        |         |             |       
|                                                 | Federal |             |       
|                                                 | State   |             |       
|                                                 |         |             |       
|                                                 |         |             | 14,847
|                                                 |         |             |       
|Income taxes (benefit) before extraordinary item |         | $           | 16,831
|                                                 |         |             |       

F-17

---

Income
taxes are included in the statements of operations as follows:

|                                                                    |  | Years Ended |       
|------------------------------------------------------------------- |  | ----------- | ------
|
|Income taxes (benefit) on earnings (loss) before extraordinary item |  | $           | 16,831
|Income taxes (benefit) on extraordinary item                        |  |             |      
|                                                                    |  |             |       
|Total income taxes (benefit)                                        |  | $           | 16,831
|                                                                    |  |             |       

A
reconciliation of income taxes at the federal statutory rate 35% with the provision for income taxes (benefit) follows:

|                                        |  | Years Ended |       
|--------------------------------------- |  | ----------- | ------
|
|Income taxes at federal statutory rate  |  | $           | 13,506
|Non-deductible expenses                 |  |             | 463   
|State taxes, net of federal tax benefit |  |             | 1,882 
|Change in valuation allowance           |  |             | 1,600 
|Other                                   |  |             | (620  
|                                        |  |             |       
|                                        |  | $           | 16,831
|                                        |  |             |       

The
sources of significant temporary differences which gave rise to the deferred tax provision and their effects follow:

|                                            |  | Years Ended |       
|------------------------------------------- |  | ----------- | ------
|
|Inventory                                   |  | $           | 26    
|Deferred rent                               |  |             | (779  
|Depreciation                                |  |             | 7,808 
|Accrued fringes                             |  |             | (680  
|Intangibles                                 |  |             | (221  
|Store closing costs                         |  |             | 974   
|Fixed assets                                |  |             | 24    
|Other assets                                |  |             | (970  
|Benefit of net operating loss carryforwards |  |             | 9,093 
|Stock option compensation                   |  |             |      
|Debt issuance costs                         |  |             |      
|Alternative minimum tax credit              |  |             | (861  
|Change in valuation allowance               |  |             | 1,600 
|Other                                       |  |             | (1,167
|                                            |  |             |       
|                                            |  | $           | 14,847
|                                            |  |             |       

F-18

---

Deferred
income taxes reflect the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. Significant components of the Company's deferred tax assets follow:

|                          |                                  | February 3,
2001 |        | February 2,
2002 |  
|------------------------- | -------------------------------- | ---------------- | ------ | ---------------- | -
|Deferred tax assets:      |                                  |                  |        |                  |  
|                          | Inventory                        |                  | $      | 3,572            |  
|                          | Deferred rent                    |                  |        | 5,130            |  
|                          | Accrued fringes                  |                  |        | 3,358            |  
|                          | Store closing costs              |                  |        | 1,863            |  
|                          | Other assets                     |                  |        | 9,045            |  
|                          | Net operating loss carryforwards |                  |        | 13,901           |  
|                          | Stock option compensation        |                  |        |                 |  
|                          | Debt issuance costs              |                  |        | 2,164            |  
|                          | Alternative minimum tax credit   |                  |        | 3,270            |  
|                          | Other                            |                  |        | 532              |  
|                          |                                  |                  |        |                  |  
|                          | Total deferred tax assets        |                  |        | 42,835           |  
|                          | Valuation allowance              |                  |        | (14,245          | )
|                          |                                  |                  |        |                  |  
|                          | Net deferred tax assets          |                  |        | 28,590           |  
|Deferred tax liabilities: |                                  |                  |        |                  |  
|                          | Depreciation                     |                  |        | (16,373          | )
|                          | Intangibles                      |                  |        | (1,272           | )
|                          |                                  |                  |        |                  |  
|                          | Total deferred tax liabilities   |                  |        | (17,645          | )
|                          |                                  |                  |        |                  |  
|Net deferred tax assets   |                                  | $                | 10,945 |                  | $
|                          |                                  |                  |        |                  |  

The
valuation allowance of $14,245 at February 3, 2001 and $14,092 at February 2, 2002 relates primarily to net operating loss carryforwards of PetCare and the Company's
equity share of the losses of Petopia.com, with the decrease in the valuation allowance at February 2, 2002 relating to the utilization of the net operating loss of the Company's foreign
subsidiary. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical
taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the
benefits of these deductible differences, net of the valuation allowance.

At
February 2, 2002, the Company has available net loss carryforwards of $43,578 for federal income tax purposes, which begin expiring in 2012, and $27,940 for state income tax
purposes, which begin expiring in 2005.

11. Employee Savings Plans

The Company has employee savings plans which permit eligible participants to make contributions by salary reduction pursuant to either section 401(k) of
the Internal Revenue Code or under the Company's non-qualified deferred compensation plan. The Company matches 50% of the first 6% of compensation that is contributed by each participating
employee to the plans. In connection with the required match, the Company's contributions to the plans were $873 in 1999, $1,052 in 2000 and $1,304 in 2001.

F-19

---

12. Related Party Transactions

The Company entered into a management agreement with two entities who were sponsors of the merger and recapitalization transaction. Under the terms of this
agreement, the Company paid management fees in an aggregate amount of $1,040 and $3,120 in fiscal 2000 and 2001, respectively, to these two related parties. On February 22, 2002, the Company
terminated the management agreement and paid an aggregate amount of $12.5 million which will be recorded in the first quarter of fiscal 2002.

The
Company issued Senior Subordinated Notes to related parties in fiscal 2000 and redeemed them in fiscal 2001 (See note 6). The related parties have syndicated a portion of
these Senior Subordinated Notes. Interest expense incurred on the Senior Subordinated Notes, primarily with related parties, including amortization of the discount, was $5,716 in fiscal 2000 and
$11,952 in fiscal 2001.

13. Commitments and Contingencies

In July 2001, two former employees instituted an action against the Company in the Superior Court of California for the County of Los Angeles. The
complaint in the action was filed, individually and on behalf of a purported class consisting of all current and former employees who worked as salaried managers or assistant managers in the Company's
stores in the state of California at any time between July 30, 1997, and the present. The complaint alleges that the individual plaintiffs and the purported class members worked hours for which
they were entitled to receive, but did not receive, overtime compensation under California law, and that they were classified as "exempt" store management employees but were forced to work more than
50% of their time in non-exempt tasks. The complaint alleges violations of the California Labor Code and the California Business and Professions Code. The relief sought includes
compensatory damages, penalties, preliminary and permanent injunctions requiring the Company to pay overtime compensation under California law, prejudgment interest, costs and attorneys' fees and such
other relief as the court deems proper. In November 2001, the case was transferred to the Superior Court of California for the County of San Diego. The Company has answered the complaint and
discovery has commenced. The Company intends to vigorously defend the action, including contesting the certification of the action as a class action. If successful, this litigation could have a
material adverse effect on our financial condition, and any required change in labor practices could have a negative impact on the Company's results of operations.

The
Company is involved in routine litigation arising in the ordinary course of its business. While the results of such litigation cannot be predicted with certainty, the Company
believes that the final outcome of such matters will not have a material adverse effect on the Company's consolidated financial position or results of operations.

At
February 2, 2002, the Company had outstanding $5.7 million in letters of credit used for general business purposes.

14. Subsequent Event

On February 27, 2002, the Company completed an initial public offering ("IPO") of 14,500 shares of common stock at a price of $19.00 per share. Proceeds to
the Company after calculation of the underwriters' commissions and fees, totaled approximately $254.4 million, net of offering costs of approximately $21.1 million. Proceeds were used to
redeem all outstanding series A and series B preferred stock and other general corporate purposes. Concurrent with the IPO, warrants for 2,132
shares of common stock were exercised, all outstanding options prior to the IPO became fully vested and 583 options to purchase common stock were issued.

In
connection with the IPO, the Company effected a 2-for-1 stock split of its common stock. All references in the consolidated financial statements to number of
shares outstanding, price per share and per share amounts have been retroactively restated to reflect the stock split for all periods presented.

F-20

---

On March 14, 2002, the underwriters for the IPO completed the exercise of their overallotment option for 1,000 shares of common stock at $19.00 per share. The aggregate proceeds
amount to approximately $17.7 million, after deducting underwriters' commissions and fees of $1.3 million.

15.  Supplemental Guarantor Condensed Consolidating Financial Statements

The Company issued $200 million in principal amount of 10.75% Senior Subordinated Notes due 2011 in which certain of its subsidiaries (the guarantor
subsidiaries) will serve as guarantors on a full and unconditional basis. Certain other subsidiaries (the nonguarantor subsidiaries) will not guarantee such debt.

The
following tables present the unaudited condensed consolidating balance sheets of PETCO Animal Supplies, Inc. as a parent company, its guarantor subsidiaries and its
nonguarantor subsidiaries as of February 3, 2001 and February 2, 2002 and the related unaudited condensed consolidating statements of operations and cash flows for each year in the
three-year period ended February 2, 2002.

F-21

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY BALANCE SHEET
February 3, 2001
(in thousands)

|                                                               |                                                        | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |          | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |         | Reclassifications
and Eliminations |        | PETCO Animal
Supplies, Inc.
And
Subsidiaries |  
|-------------------------------------------------------------- | ------------------------------------------------------ | ---------------------------------------------------- | -------- | ---------------------- | ------- | -------------------------- | ------- | ---------------------------------- | ------ | -------------------------------------------- | -
|ASSETS                                                         |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|Current assets:                                                |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               | Cash and cash equivalents                              |                                                      | $        | 17,104                 |         | $                          | 940     |                                    | $      |                                             |  
|                                                               | Receivables                                            |                                                      |          | 1,749                  |         |                            | 6,562   |                                    |        |                                             |  
|                                                               | Inventories                                            |                                                      |          | 112,418                |         |                            | 9,828   |                                    |        |                                             |  
|                                                               | Deferred tax assets                                    |                                                      |          | 14,127                 |         |                            |        |                                    |        |                                             |  
|                                                               | Other                                                  |                                                      |          | 7,446                  |         |                            | 314     |                                    |        |                                             |  
|                                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               |                                                        | Total current assets                                 |          |                        | 152,844 |                            |         | 17,644                             |        |                                              | 
|Fixed assets, net                                              |                                                        |                                                      | 177,134  |                        |         | 21,934                     |         |                                    |       |                                              |  
|Debt issuance costs                                            |                                                        |                                                      | 8,828    |                        |         |                           |         |                                    |       |                                              |  
|Goodwill                                                       |                                                        |                                                      |         |                        |         | 45,855                     |         |                                    |       |                                              |  
|Investment in affiliates                                       |                                                        |                                                      |         |                        |         |                           |         |                                    | 19,447 |                                              |  
|Intercompany investments and
advances                          |                                                        |                                                      | 153,358  |                        |         | 41,072                     |         |                                    |       |                                              |  
|Other assets                                                   |                                                        |                                                      | 10,633   |                        |         |                           |         |                                    |       |                                              |  
|                                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               |                                                        | $                                                    | 502,797  |                        | $       | 126,505                    |         | $                                  | 19,447 |                                              | $
|                                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                 |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                             
|Current liabilities:                                           |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               | Accounts payable                                       |                                                      | $        | (119                   | )       | $                          | 45,630  |                                    | $      |                                             |  
|                                                               | Intercompany payables                                  |                                                      |          | 98,613                 |         |                            | (98,613 | )                                  |        |                                             |  
|                                                               | Accrued expenses                                       |                                                      |          | 32,522                 |         |                            | 7,563   |                                    |        |                                             |  
|                                                               | Accrued interest                                       |                                                      |          | 10,417                 |         |                            |        |                                    |        |                                             |  
|                                                               | Accrued salaries and employee benefits                 |                                                      |          | 22,968                 |         |                            | 545     |                                    |        |                                             |  
|                                                               | Current portion of long-term debt                      |                                                      |          | 5,250                  |         |                            |        |                                    |        |                                             |  
|                                                               | Current portion of capital lease and other obligations |                                                      |          | 6,189                  |         |                            |        |                                    |        |                                             |  
|                                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               |                                                        | Total current liabilities                            |          |                        | 175,840 |                            |         | (44,875                            | )      |                                              | 
|Long-term debt, excluding current portion                      |                                                        |                                                      | 263,750  |                        |         |                           |         |                                    |       |                                              |  
|Senior subordinated notes payable                              |                                                        |                                                      | 109,856  |                        |         |                           |         |                                    |       |                                              |  
|Capital lease and other obligations, excluding current portion |                                                        |                                                      | 6,146    |                        |         |                           |         |                                    |       |                                              |  
|Accrued store closing costs                                    |                                                        |                                                      | 3,424    |                        |         |                           |         |                                    |       |                                              |  
|Deferred tax liability                                         |                                                        |                                                      | 3,182    |                        |         |                           |         |                                    |       |                                              |  
|Deferred rent and other liabilities                            |                                                        |                                                      | 13,419   |                        |         | 447                        |         |                                    |       |                                              |  
|                                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               |                                                        | Total liabilities                                    |          |                        | 575,617 |                            |         | (44,428                            | )      |                                              | 
|Preferred stock:                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               | 14% Series A senior redeemable preferred stock         |                                                      |          | 112,669                |         |                            |        |                                    |        |                                             |  
|                                                               | 12% Series B junior redeemable preferred stock         |                                                      |          | 78,868                 |         |                            |        |                                    |        |                                             |  
|Stockholders' equity (deficit)                                 |                                                        |                                                      | (264,357 | )                      |         | 170,933                    |         |                                    | 19,447 |                                              |  
|                                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  
|                                                               |                                                        | $                                                    | 502,797  |                        | $       | 126,505                    |         | $                                  | 19,447 |                                              | $
|                                                               |                                                        |                                                      |          |                        |         |                            |         |                                    |        |                                              |  

F-22

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY BALANCE SHEET
February 2, 2002
(in thousands)

|                                                               |                                                        | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |          | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |          | Reclassifications
and Eliminations |   | PETCO Animal
Supplies, Inc.
And
Subsidiaries |  
|-------------------------------------------------------------- | ------------------------------------------------------ | ---------------------------------------------------- | -------- | ---------------------- | ------- | -------------------------- | -------- | ---------------------------------- | - | -------------------------------------------- | -
|ASSETS                                                         |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|Current assets:                                                |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               | Cash and cash equivalents                              |                                                      | $        | 36,000                 |         | $                          | 215      |                                    | $ |                                             |  
|                                                               | Receivables                                            |                                                      |          | 920                    |         |                            | 8,774    |                                    |   |                                             |  
|                                                               | Inventories                                            |                                                      |          | 125,990                |         |                            | 3,001    |                                    |   |                                             |  
|                                                               | Deferred tax assets                                    |                                                      |          | 26,287                 |         |                            |         |                                    |   |                                             |  
|                                                               | Other                                                  |                                                      |          | 8,234                  |         |                            | 15       |                                    |   |                                             |  
|                                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               |                                                        | Total current assets                                 |          |                        | 197,431 |                            |          | 12,005                             |   |                                              | 
|Fixed assets, net                                              |                                                        |                                                      | 188,754  |                        |         | 22,378                     |          |                                    |  |                                              |  
|Debt issuance costs                                            |                                                        |                                                      | 6,086    |                        |         |                           |          |                                    |  |                                              |  
|Goodwill                                                       |                                                        |                                                      |         |                        |         | 40,928                     |          |                                    |  |                                              |  
|Investment in affiliates                                       |                                                        |                                                      |         |                        |         |                           |          |                                    |  |                                              |  
|Intercompany investments and
advances                          |                                                        |                                                      | 179,157  |                        |         | 45,695                     |          |                                    |  |                                              | $
|Other assets                                                   |                                                        |                                                      | 5,990    |                        |         |                           |          |                                    |  |                                              |  
|                                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               |                                                        | $                                                    | 577,418  |                        | $       | 121,006                    |          | $                                  |  |                                              | $
|                                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                 |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                             
|Current liabilities:                                           |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               | Accounts payable                                       |                                                      | $        | (2,361                 | )       | $                          | 54,584   |                                    | $ |                                             |  
|                                                               | Intercompany payables                                  |                                                      |          | 155,912                |         |                            | (159,626 | )                                  |   |                                             |  
|                                                               | Accrued expenses                                       |                                                      |          | 33,820                 |         |                            | 8,889    |                                    |   |                                             |  
|                                                               | Accrued interest                                       |                                                      |          | 6,580                  |         |                            |         |                                    |   |                                             |  
|                                                               | Accrued salaries and employee benefits                 |                                                      |          | 32,520                 |         |                            | 423      |                                    |   |                                             |  
|                                                               | Current portion of long-term debt                      |                                                      |          | 2,000                  |         |                            |         |                                    |   |                                             |  
|                                                               | Current portion of capital lease and other obligations |                                                      |          | 4,552                  |         |                            |         |                                    |   |                                             |  
|                                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               |                                                        | Total current liabilities                            |          |                        | 233,023 |                            |          | (95,730                            | ) |                                              | 
|Long-term debt, excluding current portion                      |                                                        |                                                      | 192,500  |                        |         |                           |          |                                    |  |                                              |  
|Senior subordinated notes payable                              |                                                        |                                                      | 200,000  |                        |         |                           |          |                                    |  |                                              |  
|Capital lease and other obligations, excluding current portion |                                                        |                                                      | 2,105    |                        |         |                           |          |                                    |  |                                              |  
|Accrued store closing costs                                    |                                                        |                                                      | 1,467    |                        |         |                           |          |                                    |  |                                              |  
|Deferred tax liability                                         |                                                        |                                                      | 6,219    |                        |         |                           |          |                                    |  |                                              |  
|Deferred rent and other liabilities                            |                                                        |                                                      | 16,180   |                        |         | 519                        |          |                                    |  |                                              |  
|                                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               |                                                        | Total liabilities                                    |          |                        | 651,494 |                            |          | (95,211                            | ) |                                              | 
|Preferred stock:                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               | 14% Series A senior redeemable preferred stock         |                                                      |          | 130,038                |         |                            |         |                                    |   |                                             |  
|                                                               | 12% Series B junior redeemable preferred stock         |                                                      |          | 89,244                 |         |                            |         |                                    |   |                                             |  
|Stockholders' equity (deficit)                                 |                                                        |                                                      | (293,358 | )                      |         | 216,217                    |          |                                    |  |                                              |  
|                                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  
|                                                               |                                                        | $                                                    | 577,418  |                        | $       | 121,006                    |          | $                                  |  |                                              | $
|                                                               |                                                        |                                                      |          |                        |         |                            |          |                                    |   |                                              |  

F-23

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF OPERATIONS
For the year ended January 29, 2000
(in thousands)

|                                                                    |                                                                                                      | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |         | Guarantor
Subsidiaries |   | Non-Guarantor
Subsidiaries |         | Reclassifications
and Eliminations |   | PETCO Animal
Supplies, Inc.
And
Subsidiaries |  
|------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ---------------------- | - | -------------------------- | ------- | ---------------------------------- | - | -------------------------------------------- | -
|Net sales                                                           |                                                                                                      | $                                                    | 901,308 |                        | $ | 724,616                    |         | $                                  |  |                                              | $
|Cost of sales and occupancy costs                                   |                                                                                                      |                                                      | 671,451 |                        |   | 620,263                    |         |                                    |  |                                              |  
|                                                                    |                                                                                                      |                                                      |         |                        |   |                            |         |                                    |   |                                              |  
|                                                                    | Gross profit                                                                                         |                                                      |         | 229,857                |   |                            | 104,353 |                                    |   |                                             |  
|Selling, general and administrative expenses                        |                                                                                                      |                                                      | 212,451 |                        |   | 72,981                     |         |                                    |  |                                              |  
|                                                                    |                                                                                                      |                                                      |         |                        |   |                            |         |                                    |   |                                              |  
|                                                                    | Operating income                                                                                     |                                                      |         | 17,406                 |   |                            | 31,372  |                                    |   |                                             |  
|Interest income                                                     |                                                                                                      |                                                      | (862    | )                      |   | (1                         | )       |                                    |  |                                              |  
|Interest expense                                                    |                                                                                                      |                                                      | 9,799   |                        |   |                           |         |                                    |  |                                              |  
|                                                                    |                                                                                                      |                                                      |         |                        |   |                            |         |                                    |   |                                              |  
|                                                                    | Earnings before internet operations and equity in loss of unconsolidated affiliates and income taxes |                                                      |         | 8,469                  |   |                            | 31,373  |                                    |   |                                             |  
|Internet operations and equity in loss of unconsolidated affiliates |                                                                                                      |                                                      | (1,254  | )                      |   |                           |         |                                    |  |                                              |  
|                                                                    |                                                                                                      |                                                      |         |                        |   |                            |         |                                    |   |                                              |  
|                                                                    | Earnings (loss) before income taxes                                                                  |                                                      |         | 7,215                  |   |                            | 31,373  |                                    |   |                                             |  
|Income taxes                                                        |                                                                                                      |                                                      | 16,831  |                        |   |                           |         |                                    |  |                                              |  
|                                                                    | Earnings (loss) before equity in earnings of subsidiaries                                            |                                                      | $       | (9,616                 | ) |                            | 31,373  |                                    |   |                                             |  
|                                                                    | Equity in earnings of subsidiaries                                                                   |                                                      |         | 31,373                 |   |                            |        |                                    |   |                                             |  
|                                                                    |                                                                                                      |                                                      |         |                        |   |                            |         |                                    |   |                                              |  
|                                                                    | Net earnings                                                                                         |                                                      | $       | 21,757                 |   | $                          | 31,373  |                                    | $ |                                             |  
|                                                                    |                                                                                                      |                                                      |         |                        |   |                            |         |                                    |   |                                              |  

F-24

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF OPERATIONS
For the year ended February 3, 2001
(in thousands)

|                                                                    |                                                                                                                                 | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |           | Guarantor
Subsidiaries |   | Non-Guarantor
Subsidiaries |         | Reclassifications
and Eliminations |      | PETCO Animal
Supplies, Inc.
And
Subsidiaries |  
|------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | --------- | ---------------------- | - | -------------------------- | ------- | ---------------------------------- | ---- | -------------------------------------------- | -
|Net sales                                                           |                                                                                                                                 | $                                                    | 1,050,340 |                        | $ | 799,214                    |         | $                                  |     |                                              | $
|Cost of sales and occupancy costs                                   |                                                                                                                                 |                                                      | 759,935   |                        |   | 680,028                    |         |                                    |     |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  
|                                                                    | Gross profit                                                                                                                    |                                                      |           | 290,405                |   |                            | 119,186 |                                    |      |                                             |  
|Selling, general and administrative expenses                        |                                                                                                                                 |                                                      | 254,628   |                        |   | 85,622                     |         |                                    |     |                                              |  
|Merger and non-recurring costs                                      |                                                                                                                                 |                                                      | 54,618    |                        |   | 1,310                      |         |                                    |     |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  
|                                                                    | Operating income (loss)                                                                                                         |                                                      |           | (18,841                | ) |                            | 32,254  |                                    |      |                                             |  
|Interest income                                                     |                                                                                                                                 |                                                      | (1,549    | )                      |   | (2                         | )       |                                    |     |                                              |  
|Interest expense                                                    |                                                                                                                                 |                                                      | 24,522    |                        |   |                           |         |                                    |     |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  
|                                                                    | Earnings (loss) before internet operations and equity in loss of unconsolidated affiliates, income taxes and extraordinary item |                                                      |           | (41,814                | ) |                            | 32,256  |                                    |      |                                             |  
|Internet operations and equity in loss of unconsolidated affiliates |                                                                                                                                 |                                                      | (2,611    | )                      |   | (1,455                     | )       |                                    | (477 | )                                            |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  
|                                                                    | Earnings (loss) before income taxes and extraordinary item                                                                      |                                                      |           | (44,425                | ) |                            | 30,801  |                                    |      | (477                                         | )
|Income taxes                                                        |                                                                                                                                 |                                                      | 4,974     |                        |   |                           |         |                                    |     |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  
|                                                                    | Earnings (loss) before extraordinary item                                                                                       |                                                      |           | (49,399                | ) |                            | 30,801  |                                    |      | (477                                         | )
|Extraordinary itemloss on early extinguishment of debt             |                                                                                                                                 |                                                      | (1,264    | )                      |   |                           |         |                                    |     |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  
|                                                                    | Earnings (loss) before equity in earnings of subsidiaries                                                                       |                                                      |           | (50,663                | ) |                            | 30,801  |                                    |      | (477                                         | )
|                                                                    | Equity in earnings of subsidiaries                                                                                              |                                                      |           | 30,324                 |   |                            |        |                                    |      |                                             |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  
|                                                                    | Net earnings (loss)                                                                                                             |                                                      | $         | (20,339                | ) | $                          | 30,801  |                                    | $    | (477                                         | )
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |      |                                              |  

F-25

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF OPERATIONS
For the year ended February 2, 2002
(in thousands)

|                                                                    |                                                                                                                                 | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |           | Guarantor
Subsidiaries |   | Non-Guarantor
Subsidiaries |         | Reclassifications
and Eliminations |        | PETCO Animal
Supplies, Inc.
and
Subsidiaries |  
|------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | --------- | ---------------------- | - | -------------------------- | ------- | ---------------------------------- | ------ | -------------------------------------------- | -
|Net sales                                                           |                                                                                                                                 | $                                                    | 1,194,022 |                        | $ | 872,846                    |         | $                                  |       |                                              | $
|Cost of sales and occupancy costs                                   |                                                                                                                                 |                                                      | 851,978   |                        |   | 736,078                    |         |                                    |       |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  
|                                                                    | Gross profit                                                                                                                    |                                                      |           | 342,044                |   |                            | 136,768 |                                    |        |                                             |  
|Selling, general and administrative expenses                        |                                                                                                                                 |                                                      | 309,599   |                        |   | 99,786                     |         |                                    | 101    |                                              |  
|Write-off of Canadian investment                                    |                                                                                                                                 |                                                      | 8,942     |                        |   |                           |         |                                    | 28,093 |                                              |  
|Merger and non-recurring costs                                      |                                                                                                                                 |                                                      | 445       |                        |   |                           |         |                                    |       |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  
|                                                                    | Operating income (loss)                                                                                                         |                                                      |           | 23,058                 |   |                            | 36,982  |                                    |        | (28,194                                      | )
|Interest income                                                     |                                                                                                                                 |                                                      | (612      | )                      |   |                           |         |                                    |       |                                              |  
|Interest expense                                                    |                                                                                                                                 |                                                      | 41,447    |                        |   |                           |         |                                    | 2      |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  
|                                                                    | Earnings (loss) before internet operations and equity in loss of unconsolidated affiliates, income taxes and extraordinary item |                                                      |           | (17,777                | ) |                            | 36,982  |                                    |        | (28,196                                      | )
|Internet operations and equity in loss of unconsolidated affiliates |                                                                                                                                 |                                                      |          |                        |   |                           |         |                                    | 3,083  |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  
|                                                                    | Earnings (loss) before income taxes and extraordinary item                                                                      |                                                      |           | (17,777                | ) |                            | 36,982  |                                    |        | (31,279                                      | )
|Income taxes (benefit)                                              |                                                                                                                                 |                                                      | (2,215    | )                      |   |                           |         |                                    |       |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  
|                                                                    | Earnings (loss) before extraordinary item                                                                                       |                                                      |           | (15,562                | ) |                            | 36,982  |                                    |        | (31,279                                      | )
|Extraordinary itemloss on early extinguishment of debt             |                                                                                                                                 |                                                      | (12,942   | )                      |   |                           |         |                                    |       |                                              |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  
|                                                                    | Earnings (loss) before equity in earnings of subsidiaries                                                                       |                                                      |           | (28,504                | ) |                            | 36,982  |                                    |        | (31,279                                      | )
|                                                                    | Equity in earnings of subsidiaries                                                                                              |                                                      |           | 5,703                  |   |                            |        |                                    |        |                                             |  
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  
|                                                                    | Net earnings (loss)                                                                                                             |                                                      | $         | (22,801                | ) | $                          | 36,982  |                                    | $      | (31,279                                      | )
|                                                                    |                                                                                                                                 |                                                      |           |                        |   |                            |         |                                    |        |                                              |  

F-26

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
For the year ended January 29, 2000
(in thousands)

|                                                                                   |                                                   | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |        | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |        | Reclassifications
and Eliminations |       | PETCO Animal
Supplies, Inc.
and
Subsidiaries |       
|---------------------------------------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------------- | ------ | ---------------------- | ------- | -------------------------- | ------ | ---------------------------------- | ----- | -------------------------------------------- | ------
|Cash flows provided by operating activities:                                       |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   | Net earnings (loss)                               |                                                      | $      | 21,757                 |         | $                          | 31,373 |                                    | $     |                                             |       
|Adjustments to reconcile net earnings to net cash provided by operating activities |                                                   |                                                      | 44,183 |                        |         | (25,094                    | )      |                                    | 6,553 |                                              |       
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   |                                                   | Net cash provided by operating activities            |        |                        | 65,940  |                            |        | 6,279                              |       |                                              | 6,553 
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|Cash flows used in investing activities:                                           |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   | Additions to fixed assets                         |                                                      |        | (34,641                | )       |                            | (5,409 | )                                  |       |                                             |       
|                                                                                   | Investment in affiliates                          |                                                      |        | (11,906                | )       |                            |       |                                    |       | (6,553                                       | )     
|                                                                                   | Net cash invested in acquisitions of businesses   |                                                      |        | (2,927                 | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Change in other assets                            |                                                      |        | (822                   | )       |                            |       |                                    |       |                                             |       
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   |                                                   | Net cash used in investing activities                |        |                        | (50,296 | )                          |        | (5,409                             | )     |                                              | (6,553
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|Cash flows provided by financing activities:                                       |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   | Borrowings under long-term debt agreements        |                                                      |        | 32,375                 |         |                            |       |                                    |       |                                             |       
|                                                                                   | Debt issuance costs                               |                                                      |        | (1,656                 | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Repayment of long term agreements                 |                                                      |        | (4,075                 | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Repayments of capital lease and other obligations |                                                      |        | (9,715                 | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Net proceeds from the issuance of common stock    |                                                      |        | 292                    |         |                            |       |                                    |       |                                             |       
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   |                                                   | Net cash provided by financing activities            |        |                        | 17,221  |                            |        |                                   |       |                                              |      
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|Net increase in cash and cash equivalents                                          |                                                   |                                                      | 32,865 |                        |         | 870                        |        |                                    |      |                                              |       
|Cash and cash equivalents at the beginning of the period                           |                                                   |                                                      | 999    |                        |         | 1,325                      |        |                                    |      |                                              |       
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       
|Cash and cash equivalents at the end of the period                                 |                                                   | $                                                    | 33,864 |                        | $       | 2,195                      |        | $                                  |      |                                              | $     
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |       |                                              |       

F-27

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
For the year ended February 3, 2001
(unaudited)
(in thousands)

|                                                                                   |                                                                       | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |         | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |        | Reclassifications
and Eliminations |       | PETCO Animal
Supplies, Inc.
and
Subsidiaries |       
|---------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ---------------------- | ------- | -------------------------- | ------ | ---------------------------------- | ----- | -------------------------------------------- | ------
|Cash flows provided by operating activities:                                       |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   | Net earnings (loss)                                                   |                                                      | $       | (20,339                | )       | $                          | 30,801 |                                    | $     | (477                                         | )     
|Adjustments to reconcile net earnings to net cash provided by operating activities |                                                                       |                                                      | 63,003  |                        |         | (27,071                    | )      |                                    | 9,987 |                                              |       
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   |                                                                       | Net cash provided by operating activities            |         |                        | 42,664  |                            |        | 3,730                              |       |                                              | 9,510 
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|Cash flows used in investing activities:                                           |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   | Additions to fixed assets                                             |                                                      |         | (41,536                | )       |                            | (4,985 | )                                  |       |                                             |       
|                                                                                   | Investment in affiliates                                              |                                                      |         |                       |         |                            |       |                                    |       | (9,510                                       | )     
|                                                                                   | Net cash invested in acquisitions of businesses                       |                                                      |         | (16,407                | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Change in other assets                                                |                                                      |         | (197                   | )       |                            |       |                                    |       |                                             |       
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   |                                                                       | Net cash used in investing activities                |         |                        | (58,140 | )                          |        | (4,985                             | )     |                                              | (9,510
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|Cash flows provided by (used in) financing activities:                             |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   | Borrowings under long-term debt agreements                            |                                                      |         | 397,521                |         |                            |       |                                    |       |                                             |       
|                                                                                   | Debt issuance costs                                                   |                                                      |         | (11,254                | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Repayment of long term debt agreements                                |                                                      |         | (117,175               | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Repayments of capital lease and other obligations                     |                                                      |         | (7,955                 | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Purchase of common stock                                              |                                                      |         | (463,427               | )       |                            |       |                                    |       |                                             |       
|                                                                                   | Net proceeds from the issuance of common stock                        |                                                      |         | 16,889                 |         |                            |       |                                    |       |                                             |       
|                                                                                   | Net proceeds from the issuance of Series A redeemable preferred stock |                                                      |         | 107,376                |         |                            |       |                                    |       |                                             |       
|                                                                                   | Net proceeds from the issuance of Series B redeemable preferred stock |                                                      |         | 75,675                 |         |                            |       |                                    |       |                                             |       
|                                                                                   | Proceeds from the issuance of warrants                                |                                                      |         | 1,066                  |         |                            |       |                                    |       |                                             |       
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|                                                                                   |                                                                       | Net cash used in financing activities                |         |                        | (1,284  | )                          |        |                                   |       |                                              |      
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|Net decrease in cash and cash equivalents                                          |                                                                       |                                                      | (16,760 | )                      |         | (1,255                     | )      |                                    |      |                                              |       
|Cash and cash equivalents at the beginning of the period                           |                                                                       |                                                      | 33,864  |                        |         | 2,195                      |        |                                    |      |                                              |       
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       
|Cash and cash equivalents at the end of the period                                 |                                                                       | $                                                    | 17,104  |                        | $       | 940                        |        | $                                  |      |                                              | $     
|                                                                                   |                                                                       |                                                      |         |                        |         |                            |        |                                    |       |                                              |       

F-28

---

PETCO ANIMAL SUPPLIES, INC.
CONDENSED CONSOLIDATING GUARANTOR, NON-GUARANTOR AND
PARENT COMPANY STATEMENT OF CASH FLOWS
For the year ended February 2, 2002
(unaudited)
(in thousands)

|                                                                                   |                                                   | PETCO Animal
Supplies, Inc.
Parent
Company
Guarantor |        | Guarantor
Subsidiaries |         | Non-Guarantor
Subsidiaries |        | Reclassifications
and Eliminations |        | PETCO Animal
Supplies, Inc.
and
Subsidiaries |        
|---------------------------------------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------------- | ------ | ---------------------- | ------- | -------------------------- | ------ | ---------------------------------- | ------ | -------------------------------------------- | -------
|Cash flows provided by operating activities:                                       |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|                                                                                   |                                                   | Net earnings (loss)                                  |        | $                      | (22,801 | )                          | $      | 36,982                             |        | $                                            | (31,279
|Adjustments to reconcile net earnings to net cash provided by operating activities |                                                   |                                                      | 89,807 |                        |         | (33,896                    | )      |                                    | 41,007 |                                              |        
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|                                                                                   |                                                   | Net cash provided by operating activities            |        |                        | 67,006  |                            |        | 3,086                              |        |                                              | 9,728  
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|Cash flows used in investing activities:                                           |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|                                                                                   | Additions to fixed assets                         |                                                      |        | (52,495                | )       |                            | (3,811 | )                                  |        |                                             |        
|                                                                                   | Loans to employees                                |                                                      |        | (896                   | )       |                            |       |                                    |        |                                             |        
|                                                                                   | Repayment of loan to affiliate                    |                                                      |        | 6,545                  |         |                            |       |                                    |        |                                             |        
|                                                                                   | Investment in affiliates                          |                                                      |        |                       |         |                            |       |                                    |        | (9,728                                       | )      
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|                                                                                   |                                                   | Net cash used in investing activities                |        |                        | (46,846 | )                          |        | (3,811                             | )      |                                              | (9,728 
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|Cash flows provided by (used in) financing activities:                             |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|                                                                                   | Borrowings under long-term debt agreements        |                                                      |        | 215,650                |         |                            |       |                                    |        |                                             |        
|                                                                                   | Debt issuance costs                               |                                                      |        | (1,210                 | )       |                            |       |                                    |        |                                             |        
|                                                                                   | Repayment of long term debt agreements            |                                                      |        | (210,150               | )       |                            |       |                                    |        |                                             |        
|                                                                                   | Repayments of capital lease and other obligations |                                                      |        | (5,678                 | )       |                            |       |                                    |        |                                             |        
|                                                                                   | Net proceeds from the issuance of common stock    |                                                      |        | 124                    |         |                            |       |                                    |        |                                             |        
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|                                                                                   |                                                   | Net cash used in financing activities                |        |                        | (1,264  | )                          |        |                                   |        |                                              |       
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|Net increase (decrease) in cash and cash equivalents                               |                                                   |                                                      | 18,896 |                        |         | (725                       | )      |                                    |       |                                              |        
|Cash and cash equivalents at the beginning of the period                           |                                                   |                                                      | 17,104 |                        |         | 940                        |        |                                    |       |                                              |        
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        
|Cash and cash equivalents at the end of the period                                 |                                                   | $                                                    | 36,000 |                        | $       | 215                        |        | $                                  |       |                                              | $      
|                                                                                   |                                                   |                                                      |        |                        |         |                            |        |                                    |        |                                              |        

F-29

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EXHIBIT INDEX

|Exhibit
Number |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                    
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Third Amended and Restated Certificate of Incorporation of PETCO Animal Supplies, Inc.(1)                                                                                                                                                                                                                                                                              
|3.2            |  | Amended and Restated Bylaws of PETCO Animal Supplies, Inc.(1)                                                                                                                                                                                                                                                                                                          
|4.1            |  | Indenture, dated as of October 26, 2001, by and among PETCO, certain subsidiaries of PETCO and U.S. Bank N.A., as trustee(2)                                                                                                                                                                                                                                           
|4.2            |  | Exchange and Registration Rights Agreement, dated as of October 26, 2001, by and between PETCO, certain subsidiaries of PETCO and Goldman Sachs & Co., as initial purchaser(2)                                                                                                                                                                                         
|4.3*           |  | Form of Specimen Common Stock Certificate                                                                                                                                                                                                                                                                                                                              
|4.4            |  | Amended and Restated Stockholders Agreement, dated as of February 19, 2002, by and among PETCO and certain stockholders of PETCO(2)                                                                                                                                                                                                                                    
|4.5            |  | Amended and Restated Securityholders Agreement, dated as of February 19, 2002, by and among PETCO and certain securityholders of PETCO(2)                                                                                                                                                                                                                              
|10.1           |  | Form of Amended and Restated Credit Agreement, dated as of October 26, 2001, by and among PETCO, Goldman Sachs Credit Partners L.P., as joint lead arranger, joint book-runner and sole syndication agent, Wells Fargo Bank
National Association, as joint lead arranger, joint book-runner and sole administrative agent, and the lenders party thereto, as amended(2)
|10.2           |  | Distribution Center Lease, dated as of June 23, 1997, by and between PETCO and Knickerbocker Industrial Properties East LP, as amended, for 152 Dayton Jamesburg Road, South Brunswick, New Jersey(2)                                                                                                                                                                  
|10.3           |  | Distribution Center Lease, dated as of February 20, 1998, by and between PETCO and Industrial Developments International, Inc. for 3801 Rock Creek Boulevard, Joliet, Illinois(2)                                                                                                                                                                                      
|10.4           |  | Distribution Center Lease, dated as of November 24, 1997, by and between PETCO and Opus West Corporation for 4345 Parkhurst Street, Mira Loma, California(2)                                                                                                                                                                                                           
|10.5           |  | Master Equipment Lease Agreement, dated as of September 15, 1998, by and between PETCO and IBM Leasing(2)                                                                                                                                                                                                                                                              
|10.6           |  | Management Services Agreement, dated as of October, 2, 2000, by and among PETCO, Leonard Green & Partners, L.P. and TPG GenPar III, L.P.(2)                                                                                                                                                                                                                            
|10.7           |  | Amended and Restated Employment Agreement, dated as of October 2, 2000, by and between PETCO and Brian K. Devine(2)                                                                                                                                                                                                                                                    
|10.8           |  | Employment Agreement, dated as of October 2, 2000, by and between PETCO and Bruce C. Hall(2)                                                                                                                                                                                                                                                                           
|10.9           |  | Employment Agreement, dated as of October 2, 2000, by and between PETCO and James M. Myers(2)                                                                                                                                                                                                                                                                          
|10.10          |  | Form of Indemnification Agreement between PETCO and certain officers and directors(2)                                                                                                                                                                                                                                                                                  
|10.11          |  | Form of Retention Agreement for executive officers(2)                                                                                                                                                                                                                                                                                                                  
|10.12          |  | Form of Retention Agreement for non-executive officers(2)                                                                                                                                                                                                                                                                                                              
|10.13          |  | PETCO Animal Supplies 401(k) plan(2)                                                                                                                                                                                                                                                                                                                                   
|10.14          |  | PETCO Flexible Benefit Plan, amended and restated effective July 1, 1998(2)                                                                                                                                                                                                                                                                                            
|10.15          |  | The 1994 Stock Option and Restricted Stock Plan for Executive and Key Employees of PETCO Animal Supplies, Inc., as amended and restated as of October 2, 2000(2)                                                                                                                                                                                                       
|10.16          |  | Form of PETCO Animal Supplies, Inc. Non-qualified Stock Option Agreement(2)                                                                                                                                                                                                                                                                                            
|10.17          |  | Form of PETCO Animal Supplies, Inc. Incentive Stock Option Agreement(2)                                                                                                                                                                                                                                                                                                
|10.18          |  | Form of PETCO Animal Supplies, Inc. Restricted Stock Agreement(2)                                                                                                                                                                                                                                                                                                      
|10.19          |  | Agreement and Plan of Merger, dated as of May 17, 2000, by and between PETCO and BD Recapitalization Corp.(2)                                                                                                                                                                                                                                                          
|10.20          |  | First Amendment to Agreement and Plan of Merger, dated as of September 14, 2000, by and between PETCO and BD Recapitalization Corp.(2)                                                                                                                                                                                                                                 
|10.21          |  | Standard Industrial/Commercial Lease, dated as of February 28, 2001, by and between PETCO and Carol Canyon Properties, LLC for 8945 Rehco Road, San Diego, California(2)                                                                                                                                                                                               
|10.22          |  | PETCO Animal Supplies Deferred Compensation Plan(2)                                                                                                                                                                                                                                                                                                                    
|10.23          |  | 2002 Incentive Award Plan of PETCO Animal Supplies, Inc.(2)                                                                                                                                                                                                                                                                                                            

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|10.24* |  | Consulting Agreement, effective as of November 29, 2001, by and between PETCO and Brian K. Devine                     
|------ |  | ----------------------------------------------------------------------------------------------------------------------
|10.25* |  | Supplemental Executive Retirement Program, effective as of November 29, 2001, by and between PETCO and Brian K. Devine
|21.1   |  | Subsidiaries of PETCO(2)                                                                                              
|23.1   |  | Consent of KPMG LLP, Independent Auditors                                                                             
|24.1*  |  | Power of Attorney                                                                                                     

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