NOTE 4 — INVESTMENTS

We have an investment in Banfield which is accounted for using the equity method of accounting. Our ownership interest in the stock of Banfield was as follows (in thousands):


	May 1, 2011					January 30, 2011				May 2, 2010
	Shares		Amount			Shares		Amount		Shares		Amount
Voting common stock and preferred stock		4,693	$	21,675			4,693	$	21,675		4,693	$	21,675
Equity in income from Banfield		—		23,758			—		21,183		—		12,249
Dividend received from Banfield		—		(15,960	)		—		—		—		—

Total equity investment in Banfield		4,693	$	29,473			4,693	$	42,858		4,693	$	33,924

Our investment consisted of voting common stock, comprising 21.4% of all voting stock as of May 1, 2011, January 30, 2011, and May 2, 2010. Our ownership percentage as of May 1, 2011, January 30, 2011, and May 2, 2010, considering all classes of stock (voting and non-voting) was 21.0%. Our investment includes goodwill of $15.9 million. The goodwill is calculated as the excess of the purchase price for each step of the acquisition of our ownership interest in Banfield relative to that step’s portion of Banfield’s net assets at the respective acquisition date.

Banfield’s financial data is summarized as follows (in thousands):


	May 1, 2011		January 30, 2011		May 2, 2010
Current assets	$	382,346	$	351,379	$	286,783
Noncurrent assets		128,793		119,175		125,090
Current liabilities		386,176		279,836		263,205
Noncurrent liabilities		13,253		12,367		15,767


	Thirteen Weeks Ended
	May 1, 2011		May 2, 2010
Net sales	$	164,858	$	149,308
Income from operations		21,387		11,717
Net income		12,262		6,844

In accordance with our master operating agreement with Banfield, we charge Banfield license fees for the space used by the veterinary hospitals and for their portion of utilities costs. We also charge Banfield for its portion of specific operating expenses.

We recognized license fees and reimbursements for specific operating expenses from Banfield of $8.9 million and $8.3 million during the thirteen weeks ended May 1, 2011, and May 2, 2010, respectively, in other revenue on the Condensed Consolidated Statements of Income and Comprehensive Income. The related costs are included in cost of other revenue in the Condensed Consolidated Statements of Income and Comprehensive Income. Receivables from Banfield totaled $2.9 million, $2.7 million and $2.6 million at May 1, 2011, January 30, 2011, and May 2, 2010, respectively, and were included in receivables, net in the Condensed Consolidated Balance Sheets.

The master operating agreement also includes a provision for the sharing of profits on the sale of therapeutic pet foods sold in all stores with an operating Banfield hospital. The net sales and gross profit on the sale of therapeutic pet food are not material to our condensed consolidated financial statements.