Express 2010 Annual Report Download - page 44

Our ability to pay dividends is subject to restrictions in our existing credit arrangements, results of operations,
and capital requirements.
Any determination to pay dividends in the future will be at the discretion of our board of directors and will
depend upon results of operations, financial condition, contractual restrictions, restrictions imposed by applicable
law and other factors our board of directors deems relevant. Our ability to pay dividends on our common stock is
limited by our existing credit agreements and may be further restricted by the terms of any of our future debt or
preferred securities. Additionally, because we are a holding company, our ability to pay dividends on our
common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions
to us, including restrictions under the terms of the agreements governing our indebtedness.
We incur substantial costs as a result of being a public company.
As a public company, we incur significant legal, accounting, insurance, and other expenses, including costs
associated with public company reporting requirements. We incur costs associated with complying with the
requirements of the Sarbanes-Oxley Act of 2002 and related rules implemented by the SEC and the NYSE. The
expenses incurred by public companies generally for reporting and corporate governance purposes have been
increasing. We expect these laws and regulations to increase our legal and financial compliance costs and to
make some activities more time-consuming and costly, although we are currently unable to estimate these costs
with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to
obtain certain types of insurance, including director and officer liability insurance, and we may be forced to
accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar
coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified
persons to serve on our board of directors, our board committees, or as our executive officers. Furthermore, if we
are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock,
fines, sanctions and other regulatory action and potentially civil litigation.
Compliance with Section 404 of the Sarbanes-Oxley Act of 2002 will require significant expenditures and
effort by management, and if our independent registered public accounting firm is unable to provide an
unqualified attestation report on our internal controls, our stock price could be adversely affected.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and related rules and regulations and beginning with
our Annual Report on Form 10-K for the year ending January 28, 2012, our management will be required to
report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal
control over financial reporting. The rules governing the standards that must be met for management to assess
our internal control over financial reporting are complex and require significant documentation, testing, and
possible remediation. We are currently in the process of reviewing, documenting, and testing our internal control
over financial reporting. We may encounter problems or delays in completing the implementation of any changes
necessary to make a favorable assessment of our internal control over financial reporting. In addition, in
connection with the attestation process by our independent registered public accounting firm, we may encounter
problems or delays in completing the implementation of any requested improvements and receiving a favorable
attestation. If we cannot favorably assess the effectiveness of our internal control over financial reporting, or if
our independent registered public accounting firm is unable to provide an unqualified attestation report on our
internal controls, investors could lose confidence in our financial information and our stock price could decline.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
Home Office, Distribution Center, and Design Studio
Our 197,000 square foot principal executive office and 381,000 square foot distribution facility are located in
Columbus and are leased from Limited Brands. Our Columbus distribution facility is operated by Limited
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