Abercrombie & Fitch 2010 Annual Report Download - page 67

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Table of Contents
ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
such types of discrete items include, but are not limited to, changes in estimates of the outcome of tax matters related to prior years,
provision-to-return adjustments, tax-exempt income and the settlement of tax audits.
See Note 13, "Income Taxes" for a discussion regarding the Company's policies for uncertain tax positions.
FOREIGN CURRENCY TRANSLATION
The majority of the Company's international operations use local currencies as the functional currency. Assets and liabilities
denominated in foreign currencies were translated into U.S. dollars (the reporting currency) at the exchange rate prevailing at the
balance sheet date. Equity accounts denominated in foreign currencies were translated into U.S. dollars at historical exchange rates.
Revenues and expenses denominated in foreign currencies were translated into U.S. dollars at the monthly average exchange rate for
the period. Gains and losses resulting from foreign currency transactions are included in the results of operations; whereas, translation
adjustments and inter-company loans of a long-term investment nature are reported as an element of Other Comprehensive Income.
Foreign currency translations resulted in a loss of $3.3 million for the fifty-two weeks ended January 29, 2011 and an immaterial gain
for the fifty-two weeks ended January 30, 2010.
DERIVATIVES
See Note 15, "Derivatives" for further discussion.
CONTINGENCIES
In the normal course of business, the Company must make continuing estimates of potential future legal obligations and
liabilities, which requires the use of management's judgment on the outcome of various issues. Management may also use outside
legal advice to assist in the estimating process. However, the ultimate outcome of various legal issues could be different than
management estimates, and adjustments may be required.
STOCKHOLDERS' EQUITY
At January 29, 2011 and January 30, 2010, there were 150.0 million shares of A&F's $.01 par value Class A Common Stock
authorized, of which 87.2 million and 88.0 million shares were outstanding at January 29, 2011 and January 30, 2010, respectively,
and 106.4 million shares of $.01 par value Class B Common Stock authorized, none of which were outstanding at January 29, 2011
and January 30, 2010. In addition, 15.0 million shares of A&F's $.01 par value Preferred Stock were authorized, none of which have
been issued. See Note 19, "Preferred Stock Purchase Rights" for information about Preferred Stock Purchase Rights.
Holders of Class A Common Stock generally have identical rights to holders of Class B Common Stock, except holders of
Class A Common Stock are entitled to one vote per share while holders of Class B Common Stock are entitled to three votes per share
on all matters submitted to a vote of stockholders.
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