Urban Outfitters 2009 Annual Report Download - page 55

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URBAN OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. Nature of Business
Urban Outfitters, Inc. (the “Company” or “Urban Outfitters”), which was founded in 1970 and
originally operated by a predecessor partnership, was incorporated in the Commonwealth of
Pennsylvania in 1976. The principal business activity of the Company is the operation of a general
consumer product retail and wholesale business selling to customers through various channels
including retail stores, three catalogs and four web sites. As of January 31, 2009 and 2008, the
Company operated 294 and 245 stores, respectively. Stores located in the United States totaled 270 as
of January 31, 2009 and 229 as of January 31, 2008. Operations in Europe and Canada included 17
stores and 7 stores as of January 31, 2009, respectively and 12 stores and 4 stores as of January 31,
2008, respectively. In addition, the Company’s wholesale segment sold and distributed apparel to
approximately 1,800 better specialty retailers worldwide.
2. Summary of Significant Accounting Policies
Fiscal Year-End
The Company operates on a fiscal year ending January 31 of each year. All references to fiscal
years of the Company refer to the fiscal years ended on January 31 in those years. For example, the
Company’s fiscal 2009 ended on January 31, 2009.
Principles of Consolidation
The consolidated financial statements include the accounts of Urban Outfitters, Inc. and its
wholly owned subsidiaries. All inter-company transactions and accounts have been eliminated in
consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of net sales and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents are defined as cash and highly liquid investments with maturities of
less than three months at the time of purchase. As of January 31, 2009 and 2008, cash and cash
equivalents included cash on hand, cash in banks and money market accounts. A significant portion of
the Company’s cash held in money market accounts is insured under the Federal Government’s
Troubled Assets Relief Program (“TARP”).
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