Abercrombie &Fitch was modified to more closely reflect interim liabilities under the annualization method. In addition, the favorable impact of the Company’s stock-based compensation was significantly reduced reflecting the lower stock prices during 2002 as compared to 2001. Net deferred income taxes increased in 2002 primarily as a result of increasing differences between book and tax depreciation methods due to the accelerated growth of store openings the past few years and “bonus” accelerated depreciation allowed under the Job Creation and Worker Assistance Act of 2002. Inventories increased $35.3 million during 2002 and represented the primary use of cash. Inventories at fiscal 2002 year-end were 12% higher on a gross square foot basis versus fiscal 2001 year-end. Other uses of cash were directly related to store growth and pri- marily consisted of increases in capitalized store supplies and prepaid rent related to stores (classified in other current assets). The Company’s operations are seasonal in nature and typically peak during the back-to-school and Christmas selling periods. Accordingly, cash requirements for inventory expenditures are highest during these periods. Cash outflows related to investing activities were primarily for capital expenditures (see the discussion in the “Capital Expenditures” section below) related to new stores (net of con- struction allowances) with approximately $20 million invested in information technology and distribution center projects. Investing activities also included purchases and maturities of mar- ketable securities. As of February 1, 2003, the Company held marketable securities with original maturities of three to five months. The decrease in note receivable resulted from the repay- ment of a promissory note by the Chairman (see Note 9 to the Consolidated Financial Statements). Financing activities during 2002, 2001 and 2000 consisted pri- marily of the repurchase of 1,850,000 shares, 600,000 shares, and 3,550,000 shares, respectively, of A&F’s Class A Common Stock pursuant to previously authorized stock repurchase programs.  The 2002 repurchase completed a previously authorized 6,000,000 share repurchase program. At its August 2002 Board meeting, the Board of Directors authorized the repurchase of an additional 5,000,000 shares of the Company’s Class A Common Stock. As of February 1, 2003, the total number of shares autho- rized and available for repurchase was 5,000,000. In addition to stock repurchases, financing activities also consisted of stock option exercises and restricted stock issuances. During the first nine months of 2002, the Company had avail- able a $150 million syndicated unsecured credit agreement. The Company also had a $75 million facility for trade letters of credit. The trade letters of credit were issued to numerous overseas sup- pliers and served as guarantees to the suppliers. Effective November 14, 2002, the Company entered into a new $250 million syndicated unsecured credit agreement (the “New Credit Agreement”), which replaced both the then existing credit agreement (the “Old Credit Agreement”) and the trade let- ter of credit facility. Additional details regarding the New Credit Agreement can be found in the Notes to Consolidated Financial Statements (see note 8). Letters of credit totaling approximately $41.8 million were outstanding under the New Credit Agreement at February 1, 2003. Letters of credit totaling approximately $49.9 million were outstanding under the trade letter of credit facility at February 2, 2002. No borrowings were outstanding under the New Credit Agreement at February 1, 2003 or under the Old Credit Agreement at February 2, 2002. The Company has standby letters of credit in the amount of $4.7 million that expire in one year. The beneficiary, a merchandise supplier, has the right to draw upon the standby letters of credit if the Company has authorized or filed a voluntary petition in bankruptcy. To date, the beneficiary has not drawn upon the standby letters of credit. As of February 1, 2003, the Company was committed to noncancelable leases with remaining terms of one to fourteen years. These commitments include store leases with initial terms ranging primarily from ten to fifteen years. A summary of minimum rent commitments under noncancelable leases follows (dollars in thousands): Payments Due by Period Total Less than 1 Year 1-3 Years 4-5 Years After 5 Years $889,328 $120,313 $352,910 $186,434 $229,671 9