Abercrombie & Fitch 2013 Annual Report Download - page 17

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17
Our unsecured Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) and our Term
Loan Agreement include financial and other covenants that impose restrictions on our financial and business operations.
Our Amended and Restated Credit Agreement expires on July 27, 2016 and our Term Loan Agreement has a maturity
date of February 23, 2017. Market conditions could potentially impact the size and terms of a replacement facility or facilities.
Both our Amended and Restated Credit Agreement and our Term Loan Agreement contain financial covenants that
require us to maintain a minimum coverage ratio and a maximum leverage ratio. If we fail to comply with the covenants and
are unable to obtain a waiver or amendment, an event of default would result, and the lenders could declare outstanding
borrowings immediately due and payable. If that should occur, we cannot guarantee that we would have sufficient liquidity at
that time to repay or refinance borrowings under the Amended and Restated Credit Agreement and/or the Term Loan
Agreement.
The inability to obtain credit on commercially reasonable terms, or a default under the current Amended and Restated
Credit Agreement and/or the Amended Term Loan Agreement, could adversely impact our liquidity and results of operations.
Compliance with changing regulations and standards for accounting, corporate governance and public disclosure could
adversely affect our business, results of operations and reported financial results.
Changing regulatory requirements for corporate governance and public disclosure, including SEC regulations and the
Financial Accounting Standards Board’s accounting standards requirements are creating additional complexities for public
companies. For example, the Dodd-Frank Act contains provisions governing “conflict minerals,” certain minerals originating
from the Democratic Republic of Congo and adjoining countries. As a result, the SEC adopted annual disclosure and reporting
requirements for those companies who use conflict minerals mined in the named countries. There will be costs associated with
complying with the disclosure requirements, including diligence to determine the sources of minerals used in our products and
possible changes to sources of our inputs.
Stockholder activism, the current political environment, financial reform legislation and the current high level of
government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations. In addition,
the expected future requirement to transition to, or converge with, international financial reporting standards is creating
uncertainty and additional complexities. These changing regulatory requirements may lead to additional compliance costs, as
well as the diversion of our management’s time and attention from strategic business activities and could have a significant
effect on our reported results for the affected periods.
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