Urban Outfitters 2011 Annual Report Download - page 60

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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, five catalogs and ten web sites. As of January 31, 2011 and 2010, the
Company operated 372 and 327 stores, respectively. Stores located in the United States totaled 334
as of January 31, 2011 and 298 as of January 31, 2010. Operations in Europe and Canada included
24 stores and 14 stores as of January 31, 2011, respectively and 19 stores and 10 stores as of
January 31, 2010, respectively. In addition, the Company’s wholesale segment sold and distributed
apparel to approximately 1,400 better department and 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 2011 ended on January 31, 2011.
Principles of Consolidation
The consolidated financial statements include the accounts of Urban Outfitters, Inc. and all of its
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 short-term highly liquid investments with
maturities of less than three months at the time of purchase. These short-term highly liquid
investments are both readily convertible to known amounts of cash and so near their maturity that they
present insignificant risk of changes in value because of changes in interest rates. As of January 31,
2011 and 2010, cash and cash equivalents included cash on hand, cash in banks and money market
accounts.
F-7