Abercrombie & Fitch 2003 Annual Report Download - page 32

Abercrombie &Fitch
5. LEASED FACILIT IES AND COMMITMENT S Annual store rent
is comprised of a fixed minimum amount, plus contingent rent
based on a percentage of sales exceeding a stipulated amount.
Store lease terms generally require additional payments covering
taxes, common area costs and certain other expenses.
A summary of rent expense follows (thousands):
2003 2002 2001
Store rent:
Fixed minimum $121,547 $105,751 $83,608
Contingent 5,194 4,886 4,897
Total store rent $126,741 $110,637 $88,505
Buildings, equipment and other 1,219 1,133 1,566
Total rent expense $127,960 $111,770 $90,071
At January 31, 2004, the Company was committed to noncancelable
leases with remaining terms of one to thirteen years. These commit-
ments include store leases with initial terms ranging primarily from
ten to fifteen years. A summary of minimum rent commitments
under noncancelable leases follows (thousands):
2004 $141,338 2007 122,478
2005 $142,266 2008 110,150
2006 $136,151 Thereafter 350,337
6. ACCRUED EXPENSES Accrued expenses consisted of the follow-
ing (thousands):
2003 2002
Accrual for construction in progress $31,269 $12,680
Current portion of unredeemed gift card revenue 20,417 23,454
Rent and landlord charges 17,689 18,465
Compensation and benefits 14,589 15,857
Catalogue and advertising costs 14,183 9,701
Legal 9,248 5,136
Store accruals 6,671 10,773
Other 24,166 23,460
Total $138,232 $119,526
7. INCOME TAXES The provision for income taxes consisted of
(thousands):
2003 2002 2001
Currently payable:
Federal $101,692 $ 88,238 $ 79,691
State 18,248 13,865 15,002
$119,940 $102,103 $ 94,693
Deferred:
Federal $ 8,748 $ 16,727 $ 11,133
State 1,552 2,620 2,024
$10,300 $ 19,347)$ 13,157
Total provision $130,240 $121,450 $107,850
A reconciliation between the statutory Federal income tax rate and
the effective income tax rate follows:
2003 2002 2001
Federal income tax rate 35.0% 35.0% 35.0%
State income tax, net of Federal
income tax effect 3.8% 3.5% 3.9%
Other items, net 0.0% (0.1%) 0.1%
Total 38.8% 38.4% 39.0%
Income taxes payable included net current deferred tax assets of
$3.5 million and $6.5 million at January 31, 2004 and February 1,
2003, respectively.
Under a tax sharing arrangement with The Limited, which
owned 84.2% of the outstanding Common Stock through May 19,
1998, the Company was responsible for and paid to The Limited its
proportionate share of income taxes calculated upon its separate tax-
able income at the estimated annual effective tax rate for periods
prior to May 19, 1998. In 2002, a final tax sharing payment was
made to The Limited pursuant to an agreement to terminate the tax
sharing agreement. As a result, the Company has been indemnified
by The Limited for any federal, state or local taxes asserted with
respect to The Limited for all periods prior to May 19, 1998.
Amounts paid to The Limited totaled $1.4 million and $ 20 thou-
sand in 2002 and 2001, respectively.
Amounts paid directly to taxing authorities were $113.0 million,
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