Abercrombie & Fitch 2011 Annual Report Download - page 100

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ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Company beginning on January 31, 2010. The disclosure guidance adopted on January 31, 2010, did not
have a material impact on our consolidated financial statements.
In May 2011, ASC 820-10 was further amended to clarify certain disclosure requirements and
improve consistency with international reporting standards. This amendment is to be applied prospectively
and is effective for the Company beginning January 28, 2012. The Company does not expect its adoption to
have a material effect on its consolidated financial statements.
Accounting Standards Codification Topic 220, “Comprehensive Income,” was amended in June 2011
to require entities to present the total of comprehensive income, the components of net income, and the
components of other comprehensive income either in a single continuous statement of comprehensive
income or in two separate but consecutive statements. The amendment does not change the items that must
be reported in other comprehensive income or when an item of other comprehensive income must be
reclassified to net income under current GAAP. This guidance is effective for the Company’s fiscal year
and interim periods beginning January 29, 2012. The Company does not expect its adoption to have a
material effect on its consolidated financial statements.
21. SUBSEQUENT EVENT
On February 24, 2012, the Company entered into a $300 million Term Loan Agreement to take
advantage of the current lending market and to increase its flexibility and liquidity. In conjunction with the
Term Loan Agreement, the Company amended the Amended and Restated Credit Agreement principally to
be able to enter into the Term Loan Agreement. The Company is not required to draw down all, or any
portion, of the Term Loan Agreement. Proceeds from the Term Loan Agreement may be used for any
general corporate purpose. Depending on market conditions, liquidity and other factors, the Company may
use all, or a portion, of the Term Loan Agreement to accelerate A&F’s previously announced stock
repurchase program. Each loan will mature on February 23, 2017, with quarterly amortization payments of
principal beginning in May 2013. Interest on borrowings may be determined under several alternative
methods including LIBOR plus a margin based upon the Company’s Leverage Ratio, which represents the
ratio of (a) the sum of total debt (excluding specified permitted foreign bank guarantees) plus 600% of
forward minimum rent commitments to (b) Consolidated EBITDAR (as defined in the Term Loan
Agreement) for the trailing four-consecutive-fiscal-quarter period. Covenants are generally consistent with
those in the Company’s Amended and Restated Credit Agreement. To date, no draws have been made
under the Term Loan Agreement.
22. PREFERRED STOCK PURCHASE RIGHTS
On July 16, 1998, A&F’s Board of Directors declared a dividend of one Series A Participating
Cumulative Preferred Stock Purchase Right (the “Rights”) for each outstanding share of Class A Common
Stock (the “Common Stock”), par value $0.01 per share, of A&F. The dividend was paid on July 28, 1998
to stockholders of record on that date. Shares of Common Stock issued after July 28, 1998 and prior to
May 25, 1999 were issued with one Right attached. A&F’s Board of Directors declared a two-for-one stock
split (the “Stock Split”) on the Common Stock, payable on June 15, 1999 to the holders of record at the
close of business on May 25, 1999. In connection with the Stock Split, the number of Rights associated
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