Urban Outfitters 2012 Annual Report Download - page 64

Table of Contents
URBAN OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
net income by the weighted average number of common shares and common share equivalents outstanding. Common share equivalents include the effect of
stock options, stock appreciation rights ("SAR's"), restricted stock units ("RSU's") and performance share units ("PSU's").
Accumulated Other Comprehensive Loss
Comprehensive income is comprised of two subsets—net income and accumulated other comprehensive loss. Amounts included in accumulated other
comprehensive loss relate to foreign currency translation adjustments and unrealized gains or losses on marketable securities. The foreign currency translation
adjustments are not adjusted for income taxes because these adjustments relate to non-U.S. subsidiaries for which foreign earnings have been designated as
permanently reinvested. Accumulated other comprehensive loss consisted of foreign currency translation losses of $10,037 and $7,752 as of January 31, 2012
and January 31, 2011, respectively and unrealized losses, net of tax, on marketable securities of $1,475 and $2,510 as of January 31, 2012 and January 31,
2011, respectively. Gross realized gains and losses are included in other income in the Consolidated Statements of Income and were not material to the
Company's Consolidated Financial Statements for all three years presented.
Foreign Currency Translation
The financial statements of the Company's foreign operations are translated into U.S. dollars. Assets and liabilities are translated at current exchange
rates as of the balance sheet date, equity accounts at historical exchange rates, while revenue and expense accounts are translated at the average rates in effect
during the year. Translation adjustments are not included in determining net income, but are included in accumulated other comprehensive loss within
shareholders' equity. As of January 31, 2012, 2011 and 2010, foreign currency translation adjustments resulted in accumulated losses of $10,037 and $7,752,
respectively.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, marketable
securities and accounts receivable. The Company manages the credit risk associated with cash, cash equivalents and marketable securities by investing in
high-quality securities held with reputable trustees and, by policy, limiting the amount of credit exposure to any one issuer or issue, as well as providing
limitations on investment maturities. The Company's investment policy requires that the majority of its cash, cash equivalents and marketable securities are
invested in corporate and municipal bonds rated "A" or better and federally insured or guaranteed investment vehicles such as federal government agencies,
irrevocable pre-refunded municipal bonds and United States treasury bills. Receivables from third-party credit cards are processed by financial institutions,
which are monitored for financial stability. The Company periodically evaluates the financial condition of its wholesale segment customers. The Company's
allowance for doubtful accounts reflects current market conditions and management's assessment regarding the collectability of its accounts receivable. The
Company maintains cash accounts that, at
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