Abercrombie & Fitch 2010 Annual Report Download - page 78

Download and view the complete annual report

Please find page 78 of the 2010 Abercrombie & Fitch annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 140

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140

Table of Contents
ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
6. FAIR VALUE
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The inputs used to measure fair value are prioritized based on a three-level hierarchy.
The three levels of inputs to measure fair value are as follows:
• Level 1 — inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets.
• Level 2 — inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities,
directly or indirectly.
• Level 3 — inputs to the valuation methodology are unobservable.
The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The three
levels of the hierarchy and the distribution of the Company's assets and liabilities, measured at fair value, within it were as follows:
Assets at Fair Value as of January 29, 2011
Level 1 Level 2 Level 3 Total
(In thousands)
ASSETS:
Money market funds(1) $ 401,102 $ — $ — $ 401,102
Treasury Bills 124,968 — — 124,968
ARS — available-for-sale — student loan backed — — 85,732 85,732
ARS — available-for-sale — municipal authority bonds — — 14,802 14,802
Municipal notes and bonds held in the Rabbi Trust 11,870 — — 11,870
Derivative financial instruments — 727 — 727
Total assets measured at fair value $ 537,940 $ 727 $ 100,534 $ 639,201
LIABILITIES:
Derivative financial instruments — 1,143 — 1,143
Total liabilities measured at fair value $ — $ 1,143 $ — $ 1,143
(1) Includes $400.8 million of money market funds included in Cash and Equivalents and $0.3 million of money market funds held in
the Rabbi Trust included in Other Assets on the Consolidated Balance Sheet.
The level 2 assets consist of derivative financial instruments, primarily forward foreign exchange contracts. The fair value of
forward foreign exchange contracts is determined by using quoted market prices of the same or similar instruments, adjusted for
counterparty risk.
The level 3 assets include investments in insured student loan backed ARS and insured municipal authority bond ARS which are
available-for-sale.
75