Abercrombie & Fitch 2013 Annual Report Download - page 64

64
The table below includes a roll-forward of the Company’s level 3 assets and liabilities from January 28, 2012 to
February 2, 2013. When a determination is made to classify an asset or liability within level 3, the determination is based upon
the lack of significance of the observable parameters to the overall fair value measurement. However, the fair value
determination for level 3 financial assets and liabilities may include observable components.
Available-for-sale
ARS -
Student Loans Available-for-sale ARS - Muni Bonds Total
(in thousands)
Fair value, January 28, 2012 $ 84,650 $ 14,858 $ 99,508
Dispositions (85,524)(16,439)(101,963)
Gains and (losses), net:
Reported in Net Income 874 1,581 2,455
Fair value, February 2, 2013 $ — $ — $ —
9. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of (in thousands):
February 2, 2013 January 28, 2012
Land $ 36,890 $ 36,890
Buildings 297,243 267,566
Furniture, fixtures and equipment 707,061 614,641
Information technology 289,656 237,245
Leasehold improvements 1,449,568 1,340,487
Construction in progress 90,573 113,663
Other 44,081 44,727
Total $ 2,915,072 $ 2,655,219
Less: Accumulated depreciation and amortization (1,606,840)(1,457,948)
Property and equipment, net $ 1,308,232 $ 1,197,271
Long-lived assets, primarily comprised of property and equipment, are reviewed periodically for impairment or whenever
events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Factors used in the
evaluation include, but are not limited to, management’s plans for future operations, recent operating results, and projected cash
flows.
In the fourth quarter of Fiscal 2012, as a result of the fiscal year-end review of long-lived store-related assets, the
Company incurred store-related asset impairment charges of $7.4 million included in Stores and Distribution Expense on the
Consolidated Statement of Operations and Comprehensive Income for Fiscal 2012. The asset impairment charge was primarily
related to one Abercrombie & Fitch, three abercrombie kids, 12 Hollister, and one Gilly Hicks store.
In the fourth quarter of Fiscal 2011, as a result of the fiscal year-end review of long-lived store-related assets, the
Company incurred store-related asset impairment charges of $68.0 million, included in Stores and Distribution Expense on the
Consolidated Statement of Operations and Comprehensive Income for Fiscal 2011. The asset impairment charge was related to
14 Abercrombie & Fitch, 21 abercrombie kids, 42 Hollister, and two Gilly Hicks stores.
In Fiscal 2010, as a result of the review of long-lived store-related assets, the Company incurred store-related asset
impairment charges of $50.6 million, included in Stores and Distribution Expense on the Consolidated Statement of Operations
and Comprehensive Income for Fiscal 2010. The asset impairment charge was primarily related to 13 Gilly Hicks stores. The
charge also included two Abercrombie & Fitch, two abercrombie kids and nine Hollister stores.
Store-related assets are considered level 3 assets in the fair value hierarchy and the fair values were determined at the
individual store level, primarily using a discounted cash flow model. The estimation of future cash flows from operating
activities requires significant estimates of factors that include future sales, gross margin performance and operating expenses. In
instances where the discounted cash flow analysis indicated a negative value at the store level, the market exit price based on
Table of Contents ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)