Abercrombie & Fitch 2002 Annual Report Download - page 16

tabular presentation of the following information for all periods
presented:
1. Net income and EPS (basic and diluted), as reported;
2. Compensation expense (if any), net of tax, included in
reported net income;
3. Compensation expense that would have been included in
net income had the company adopted the accounting pro
visions of FASB No. 123 for all awards granted, modified or
settled since December 15, 1994;
4. Pro forma net income and earnings per share.
The transition and annual disclosure provisions of FASB
No. 148 are effective for the 2002 financial statements. The
new interim disclosure provisions are effective in the first
quarter of 2003.
Emerging Issues Task Force (“EITF”) Issue 02-16,
“Accounting by a Customer (Including a Reseller) For Cash
Consideration Received from a Vendor,” addresses the account-
ing treatment for cash vendor allowances received. The
adoption of EITF Issue 02-16 in 2003 did not have an impact
on the Company’s financial position or results of operations.
IMPACT OF INFLATION The Company’s results of operations
and financial condition are presented based upon historical cost.
While it is difficult to accurately measure the impact of infla-
tion due to the imprecise nature of the estimates required, the
Company believes that the effects of inflation, if any, on its
results of operations and financial condition have been minor.
SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 A&F cau-
tions that any forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995)
contained in this Form 10-K or made by management of A&F
involve risks and uncertainties and are subject to change based
on various important factors. The following factors, among oth-
ers, in some cases have affected and in the future could affect the
Company’s financial performance and actual results and could
cause actual results for 2003 and beyond to differ materially
from those expressed or implied in any of the forward-looking
statements included in this Form 10-K or otherwise made by
management: changes in consumer spending patterns and
consumer preferences; the effects of political and economic
events and conditions domestically and in foreign jurisdictions
in which the Company operates, including, but not limited to,
acts of terrorism or war; the impact of competition and pricing;
changes in weather patterns; market price of key raw materials;
ability to source product from it global supplier base; political
stability; currency and exchange risks and changes in existing
or potential duties, tariffs or quotas; availability of suitable
store locations at appropriate terms; ability to develop new
merchandise; and ability to hire, train and retain associates.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK The Company maintains its cash and equiva-
lents in financial instruments with original maturities of 90
days or less. The Company also holds marketable securities with
original maturities of three to five months. These financial
instruments bear interest at fixed rates and are subject to
interest rate risk through lost income should interest rates
increase. The Company does not enter into financial instruments
for trading purposes.
As of February 1, 2003, the Company had no long-term
debt outstanding. Future borrowings would bear interest at
negotiated rates and would be subject to interest rate risk. The
Company does not believe that a hypothetical adverse change
of 10% in interest rates would have a material affect on the
Company’s financial condition.
Abercrombie &Fitch
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