Abercrombie & Fitch 2009 Annual Report Download - page 37

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Financing Activities
In Fiscal 2009, financing activities consisted of repayment of $100.0 million borrowed under the
Company’s unsecured credit agreement, denominated in U.S. Dollars, and separate borrowings of $48.0 million
denominated in Japanese Yen under the Company’s unsecured Amended Credit Agreement, and payment of
dividends. In Fiscal 2008, financing activities consisted primarily of the repurchase of the Company’s Common
Stock, the payment of dividends, proceeds from share-based compensation, and proceeds from borrowing under
the Company’s unsecured credit agreement. In Fiscal 2007, financing activities consisted of the repurchase of
the Company’s Common Stock, and the payment of dividends as well as proceeds from share-based com-
pensation and the related excess tax benefits. A&F’s Board of Directors will review the Company’s cash
position and results of operations and address the appropriateness of future dividend amounts.
A&F did not repurchase any shares of A&F’s Common Stock in the open market during Fiscal 2009.
During Fiscal 2008, A&F repurchased approximately 0.7 million shares of A&F’s Common Stock in the open
market with a value of approximately $50.0 million. During Fiscal 2007, A&F repurchased approximately
3.6 million shares of A&F’s Common Stock in the open market with a value of approximately $287.9 million.
Both the Fiscal 2008 and Fiscal 2007 repurchases were pursuant to A&F Board of Directors’ authorizations.
As of January 30, 2010, A&F had approximately 11.3 million shares available for repurchase as part of
the August 15, 2005 and November 20, 2007 A&F Board of Directors’ authorizations to repurchase
6.0 million shares and 10.0 million shares, respectively, of A&F’s Common Stock.
The Company had $50.9 million and $100.0 million outstanding under its unsecured Amended Credit
Agreement on January 30, 2010 and January 31, 2009, respectively. The $50.9 million outstanding as of
January 30, 2010 was denominated in Japanese Yen. The average interest rate for Fiscal 2009 was 2.0%. As of
January 30, 2010, the Company had an additional $299.1 million available (less outstanding letters of credit)
under its unsecured Amended Credit Agreement.
The Amended Credit Agreement requires that the Leverage Ratio not be greater than 3.75 to 1.00 at the
end of each testing period. The Company’s Leverage Ratio was 2.95 as of January 30, 2010. The Amended
Credit Agreement also requires that the Coverage Ratio for A&F and its subsidiaries on a consolidated basis
of (i) Consolidated EBITDAR for the trailing four-consecutive-fiscal-quarter period to (ii) the sum of, without
duplication, (x) net interest expense for such period, (y) scheduled payments of long-term debt due within
twelve months of the date of determination and (z) the sum of minimum rent and contingent store rent, not be
less than 1.65 to 1.00 at January 30, 2010. The minimum Coverage Ratio varies over time based on the terms
set forth in the Amended Credit Agreement. The Amended Credit Agreement amended the definition of
Consolidated EBITDAR to add back the following items, among others, (a) recognized losses arising from
investments in certain auction rate securities to the extent such losses do not exceed a defined level of
impairments for those investments, (b) non-cash charges in an amount not to exceed $50 million related to the
closure of RUEHL branded stores and related direct-to-consumer operations, (c) non-recurring cash charges
in an aggregate amount not to exceed $61 million related to the closure of RUEHL branded stores and related
direct-to-consumer operations, (d) additional non-recurring non-cash charges in an amount not to exceed
$20 million in the aggregate over the trailing four fiscal quarter period and (e) other non-recurring cash
charges in an amount not to exceed $10 million in the aggregate over the trailing four fiscal quarter period.
The Company’s Coverage Ratio was 2.10 as of January 30, 2010. The Amended Credit Agreement also limits
the Company’s consolidated capital expenditures to $275 million in Fiscal 2009 and to $325 million in Fiscal
2010 plus any unused portion from Fiscal 2009. The Company was in compliance with the applicable ratio
requirements and other covenants at January 30, 2010.
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