Abercrombie & Fitch 2013 Annual Report Download - page 74

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74
Amount of
Gain (Loss)
Recognized
in OCI on
Derivative
Contracts
(Effective
Portion)
(a)
Location of
Gain (Loss)
Reclassified
from
Accumulated
OCI into
Earnings
(Effective
Portion)
Amount of
Gain (Loss)
Reclassified from
Accumulated
OCI into
Earnings
(Effective
Portion)
(b)
Location of
Gain (Loss)
Recognized
in
Earnings on
Derivative
Contracts
(Ineffective
Portion and
Amount
Excluded
from
Effectiveness
Testing)
Amount of
Gain (Loss)
Recognized
in Earnings
on Derivative
Contracts
(Ineffective
Portion and
Amount
Excluded
from
Effectiveness
Testing)
(c)
February 2,
2013 January 28,
2012 February 2,
2013 January 28,
2012 February 2,
2013 January 28,
2012
(in thousands)
Derivatives in
Cash Flow
Hedging
Relationships
Foreign Exchange
Forward Contracts
$ (4,003) $ 14,415 Cost of
Goods Sold $ 17,510 $ 982
Other
Operating
Expense
(Income),
Net $ 226 $ (1,190)
(a) The amount represents the change in fair value of derivative contracts due to changes in spot rates.
(b) The amount represents reclassification from OCI into earnings that occurs when the hedged item affects earnings, which is when
merchandise is sold to the Company’s customers.
(c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and
forward price that is excluded from the assessment of hedge effectiveness and, therefore, recognized in earnings.
19. DISCONTINUED OPERATIONS
On June 16, 2009, A&F’s Board of Directors approved the closure of the Company’s 29 RUEHL branded stores and
related direct-to-consumer operations. The Company completed the closure of the RUEHL branded stores and related direct-to-
consumer operations during the fourth quarter of Fiscal 2009.
Accordingly, the results of operations of RUEHL are reflected in Income from Discontinued Operations, Net of Tax on
the Consolidated Statement of Operations and Comprehensive Income for Fiscal 2010.
20. RETIREMENT BENEFITS
The Company maintains the Abercrombie & Fitch Co. Savings & Retirement Plan, a qualified plan. All U.S. associates
are eligible to participate in this plan if they are at least 21 years of age and have completed a year of employment with 1,000 or
more hours of service. In addition, the Company maintains the Abercrombie & Fitch Co. Nonqualified Savings and
Supplemental Retirement, composed of two sub-plans (Plan I and Plan II). Plan I contains contributions made through
December 31, 2004, while Plan II contains contributions made on and after January 1, 2005. Participation in these plans is
based on service and compensation. The Company’s contributions are based on a percentage of associates’ eligible annual
compensation. The cost of the Company’s contributions to these plans was $21.1 million in Fiscal 2012, $16.4 million in Fiscal
2011 and $19.4 million in Fiscal 2010.
Effective February 2, 2003, the Company established a Chief Executive Officer Supplemental Executive Retirement Plan
(the “SERP”) to provide additional retirement income to its CEO. Subject to service requirements, the CEO will receive a
monthly benefit equal to 50% of his final average compensation (as defined in the SERP) for life. The final average
compensation used for the calculation is based on actual compensation, base salary and cash incentive compensation, averaged
over the last 36 consecutive full calendar months ending before the CEO’s retirement. The Company recorded net expense of
$3.9 million, $1.3 million and $2.7 million for Fiscal 2012, Fiscal 2011 and Fiscal 2010, respectively, associated with the SERP.
The expense for Fiscal 2010, included an expense of $2.1 million to correct a cumulative under accrual of the SERP
relating to prior periods, primarily Fiscal 2008. The Company does not believe this correction was material to the periods
affected.
Table of Contents ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)