Abercrombie & Fitch 2009 Annual Report Download - page 71

6. PROPERTY AND EQUIPMENT
Property and equipment, at cost, consisted of (thousands):
2009 2008
Land............................................... $ 32,877 $ 32,302
Building ............................................ 223,532 235,738
Furniture, fixtures and equipment ......................... 593,984 628,195
Information technology ................................. 211,461 138,096
Leasehold improvements ................................ 1,205,276 1,143,656
Construction in progress ................................ 48,352 114,280
Other .............................................. 47,010 47,017
Total ............................................. $2,362,492 $2,339,284
Less: Accumulated depreciation and amortization ............. 1,118,473 940,629
Property and equipment, net ............................. $1,244,019 $1,398,655
Long-lived assets, primarily comprised of property and equipment, are reviewed periodically for
impairment or whenever events or changes in circumstances indicate that full recoverability of net asset
balances through future cash flows is in question. Factors used in the evaluation include, but are not limited to,
management’s plans for future operations, recent operating results and projected cash flows. During Fiscal
2009, as a result of a strategic review of the RUEHL business, the Company determined that a triggering event
occurred. As a result of that assessment, the Company incurred non-cash pre-tax impairment charges of
$51.5 million, reported in Net Loss from Discontinued Operations on the Consolidated Statement of
Operations and Comprehensive Income for the fifty-two weeks ended January 30, 2010. There was no
remaining fair value of RUEHL long-lived assets as of January 30, 2010.
In the fourth quarter of Fiscal 2009, as a part of the Company’s year-end review for impairment of store
related assets, the Company incurred a non-cash pre-tax impairment charge of $33.2 million, reported in
Stores and Distribution Expense on the Consolidated Statements of Operations and Comprehensive Income
for the fifty-two weeks ended January 30, 2010. The charge was associated with 34 Abercrombie & Fitch
stores, 46 abercrombie kids stores and 19 Hollister stores. In Fiscal 2008, the Company incurred a non-cash
pre-tax impairment charge of approximately $8.3 million related to long-lived assets. The charge was
associated with 11 Abercrombie & Fitch stores, six abercrombie kids stores and three Hollister stores and was
reported in Stores and Distribution Expense on the Consolidated Statement of Operations and Comprehensive
Income for the fifty-two weeks ended January 31, 2009.
The Company also incurred a non-cash pre-tax impairment charge of approximately $22.3 million
related to long-lived assets associated with nine RUEHL stores, which was reported in Net Loss from
Discontinued Operations on the Consolidated Statement of Operations and Comprehensive Income for the
fifty-two weeks ended January 31, 2009.
Store related assets are considered Level 3 assets in the fair value hierarchy and the fair values were
determined at the store level primarily using a discounted cash flow model. The estimation of future cash
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ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)