Abercrombie & Fitch 2003 Annual Report Download - page 23

EITF Issue No. 02-16, “Accounting by a Reseller for Cash
Consideration Received From a Vendor.” The issue provides
accounting guidance on how a reseller should characterize consid-
eration given by a vendor and when to recognize and how to measure
that consideration in its income statement. EITF Issue No. 02-16
was effective for fiscal years beginning after December 15, 2002. The
Company has evaluated the impact of this issue and concluded that
there was no effect on the consolidated financial statements.
In November 2002, the Financial Accounting Standards
Board (“FASB”) issued FASB Interpretation No. 45, “Guarantor’s
Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others” (“FIN
45”). FIN 45 clarifies the requirements of SFAS No. 5, “Accounting
for Contingencies,” relating to a guarantor’s accounting for, and dis-
closure of, the issuance of certain types of guarantees. The Company
adopted FIN 45 at the beginning of the 2003 fiscal year. The adop-
tion did not have an effect on the consolidated financial statements.
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 inflation 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 TH E PRIVATE SECURITIES
LITIGATION REF ORM ACT OF 1995 A&F cautions that any for-
ward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) contained in this Annual
Report or made by management of A&F involve risks and uncer-
tainties and are subject to change based on various important factors,
many of which may be beyond the Company’s control. Words such
as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,”
“intend,” and similar expressions may identify forward-looking state-
ments. The following factors, in addition to those included in the
disclosure under the heading “RISK FACTORS” in “ITEM 1. BUSI-
NESS” of A&F’s Annual Report on Form 10-K for the fiscal year ended
January 31, 2004, in some cases have affected and in the future could
affect the Company’s financial performance and could cause actual
results for the 2004 fiscal year and beyond to differ materially from those
expressed or implied in any of the forward-looking statements included
in this Annual Report or otherwise made by management:
■ changes in consumer spending 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;
■ postal rate increases and changes;
■ paper and printing costs;
■ market price of key raw materials;
■ ability to source product from its 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.
Future economic and industry trends that could potentially
impact revenue and profitability are difficult to predict. Therefore,
there can be no assurance that the forward-looking statements
included in this Annual Report will prove to be accurate. In light
of the significant uncertainties in the forward-looking statements
included herein, the inclusion of such information should not be
regarded as a representation by the Company, or any other person,
that the objectives of the Company will be achieved. The forward-
looking statements herein are based on information presently avail-
able to the management of the Company. Except as may be required
by applicable law, the Company assumes no obligation to publicly
update or revise its forward-looking statements even if experience or
future changes make it clear that any projected results expressed or
implied therein will not be realized.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK. The Company maintains its cash equivalents in
financial instruments with original maturities of 90 days or less. The
Company also holds marketable securities with original maturities
of less than one year. 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 January 31, 2004, 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 an adverse change in interest rates would have a
material affect on the Company’s financial condition.
Abercrombie &Fitch
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