AbercrombieFitchCo.pdf

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ABERCROMBIE & FITCH CO.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

2010 2009 2008(Thousands, except share and per share amounts)

NET SALES $ 3,468,777 $ 2,928,626 $ 3,484,058Cost of Goods Sold 1,256,596 1,045,028 1,152,963

GROSS PROFIT 2,212,181 1,883,598 2,331,095Stores and Distribution Expense 1,589,501 1,425,950 1,436,363Marketing, General and Administrative Expense 400,804 353,269 405,248Other Operating Income, Net (10,056) (13,533) (8,778)

OPERATING INCOME 231,932 117,912 498,262Interest Expense (Income), Net 3,362 (1,598) (11,382)

INCOME FROM CONTINUING OPERATIONS BEFORE TAXES 228,570 119,510 509,644Tax Expense from Continuing Operations 78,287 40,557 201,475

NET INCOME FROM CONTINUING OPERATIONS $ 150,283 $ 78,953 $ 308,169LOSS FROM DISCONTINUED OPERATIONS, Net of Tax $ — $ (78,699) $ (35,914)NET INCOME $ 150,283 $ 254 $ 272,255NET INCOME PER SHARE FROM CONTINUING OPERATIONS:

BASIC $ 1.71 $ 0.90 $ 3.55DILUTED $ 1.67 $ 0.89 $ 3.45

NET LOSS PER SHARE FROM DISCONTINUED OPERATIONS:BASIC $ — $ (0.90) $ (0.41)

DILUTED $ — $ (0.89) $ (0.40)NET INCOME PER SHARE:

BASIC $ 1.71 $ 0.00 $ 3.14DILUTED $ 1.67 $ 0.00 $ 3.05

WEIGHTED-AVERAGE SHARES OUTSTANDING:BASIC 88,061 87,874 86,816DILUTED 89,851 88,609 89,291

DIVIDENDS DECLARED PER SHARE $ 0.70 $ 0.70 $ 0.70OTHER COMPREHENSIVE INCOME (LOSS)

Foreign Currency Translation Adjustments $ 3,399 $ 5,942 $ (13,173)(Losses) Gains on Marketable Securities, net of taxes of $366, $(4,826) and $10,312 for Fiscal 2010,

Fiscal 2009 and Fiscal 2008, respectively (622) 8,217 (17,518)Unrealized (Loss) Gain on Derivative Financial Instruments, net of taxes of $188, $265 and $(621) for

Fiscal 2010, Fiscal 2009 and Fiscal 2008, respectively (320) (451) 892Other Comprehensive Income (Loss) $ 2,457 $ 13,708 $ (29,799)

COMPREHENSIVE INCOME $ 152,740 $ 13,962 $ 242,456

The accompanying Notes are an integral part of these Consolidated Financial Statements.

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CONSOLIDATED BALANCE SHEETS

January 29, January 30,2011 2010

(Thousands, except par value amounts)

ASSETSCURRENT ASSETS:

Cash and Equivalents $ 826,353 $ 669,950Marketable Securities — 32,356Receivables 81,264 90,865Inventories 385,857 310,645Deferred Income Taxes 60,405 44,570Other Current Assets 79,389 77,297

TOTAL CURRENT ASSETS 1,433,268 1,225,683PROPERTY AND EQUIPMENT, NET 1,149,583 1,244,019NON-CURRENT MARKETABLE SECURITIES 100,534 141,794OTHER ASSETS 264,517 210,370TOTAL ASSETS $ 2,947,902 $ 2,821,866

LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES:

Accounts Payable $ 137,235 $ 150,134Accrued Expenses 306,587 246,289Deferred Lease Credits 41,538 43,597Income Taxes Payable 73,491 9,352

TOTAL CURRENT LIABILITIES 558,851 449,372LONG-TERM LIABILITIES:

Deferred Income Taxes 33,515 47,142Deferred Lease Credits 192,619 212,052Long-Term Debt 68,566 71,213Other Liabilities 203,567 214,170

TOTAL LONG-TERM LIABILITIES 498,267 544,577STOCKHOLDERS' EQUITY:

Class A Common Stock — $0.01 par value: 150,000 shares authorized and 103,300 sharesissued at each of January 29, 2011 and January 30, 2010 1,033 1,033

Paid-In Capital 349,258 339,453Retained Earnings 2,272,317 2,183,690Accumulated Other Comprehensive Loss, net of tax (6,516) (8,973)Treasury Stock, at Average Cost — 16,054 and 15,314 shares at January 29, 2011 and

January 30, 2010, respectively (725,308) (687,286)TOTAL STOCKHOLDERS' EQUITY 1,890,784 1,827,917TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,947,902 $ 2,821,866


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CONSOLIDATED STATEMENTS OF CASH FLOWS

2010 2009 2008(Thousands)

OPERATING ACTIVITIES:Net Income $ 150,283 $ 254 $ 272,255Impact of Other Operating Activities on Cash Flows:

Depreciation and Amortization 229,153 238,752 225,334Non-Cash Charge for Asset Impairment 50,631 84,754 30,574Share-Based Compensation 40,599 36,109 42,042Lessor Construction Allowances 35,281 47,329 55,415Loss on Disposal / Write-off of Assets 7,064 10,646 7,607Amortization of Deferred Lease Credits (48,373) (47,182) (43,194)Deferred Taxes (27,823) 7,605 14,005Tax (Deficiency) Benefit from Share-Based Compensation (1,053) (5,454) 16,839Excess Tax Benefit from Share-Based Compensation — — (5,791)

Changes in Assets and Liabilities:Inventories (74,689) 62,720 (40,521)Accounts Payable and Accrued Expenses 29,365 39,394 (23,875)Income Taxes 63,807 (7,386) (55,565)Other Assets and Liabilities (62,456) (72,054) (4,094)

NET CASH PROVIDED BY OPERATING ACTIVITIES 391,789 395,487 491,031INVESTING ACTIVITIES:

Capital Expenditures (160,935) (175,472) (367,602)Purchase of Trust-Owned Life Insurance Policies (16,583) (13,539) (4,877)Purchases of Marketable Securities — — (49,411)Proceeds from Sales of Marketable Securities 84,542 77,450 308,673

NET CASH USED FOR INVESTING ACTIVITIES (92,976) (111,561) (113,217)FINANCING ACTIVITIES:

Proceeds from Share-Based Compensation 13,941 2,048 55,194Excess Tax Benefit from Share-Based Compensation — — 5,791Proceeds from Borrowings under Credit Agreement — 48,056 100,000Purchase of Common Stock (76,158) — (50,000)Dividends Paid (61,656) (61,500) (60,769)Repayment of Borrowings under Credit Agreement (12,093) (100,000) —Change in Outstanding Checks and Other (9,367) (24,654) (19,747)

NET CASH (USED FOR) PROVIDED BY FINANCING ACTIVITIES (145,333) (136,050) 30,469EFFECT OF EXCHANGE RATES ON CASH 2,923 3,402 (4,010)NET INCREASE IN CASH AND EQUIVALENTS: 156,403 151,278 404,273

Cash and Equivalents, Beginning of Period 669,950 518,672 114,399CASH AND EQUIVALENTS, END OF PERIOD $ 826,353 669,950 518,672SIGNIFICANT NON-CASH INVESTING ACTIVITIES:

Change in Accrual for Construction in Progress $ 18,741 (21,882) (27,913)


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