2017 2016 Fiscal Year Ended 2015 2014 2013 (dollars in thousands, excluding net sales per gross square foot and per share data) Statement of Operations Data: Net sales Cost of goods sold, buying and occupancy costs Gross profit 1,522,797 S 615.233 $ 2,138,030 S 2,192,547 1,529,343 S 663,204 S S 2.350.129 S 1,554,852 S 2,165,481 2,219,125 1,504,527 S 1,501,418 795,277 $ 660,954 S 717,707 Selling, general, and administrative expenses Operating income S Net income 562,088 $ 29,740 S 19.366 $ 559,541 $ 587,747 S 524,041 $ 504,277 103,601 S 207,238 S 136,597 214,259 57,417 S 116.513 S 68,325 S 116,539 Dividends declared per share Earnings per share: Basic 0.25 $ 0.73 $ 1.39 S 0.81 S 1.38 Diluted 0.25 $ 0.73 S 1.38 S 0.81 S 1.37 Weighted Average Diluted Shares Outstanding 78,870 79,049 84,591 84,554 85,068 Other Financial and Operating Data: Comparable sales (3)% (91% 6% (5% 3% Comparable sales (excluding e-commerce sales) (10)% (12) % 4% (7)%) (1)% Total gross square feet (in thousands) (average) 5,487 5,604 5,573 5.529 5,439 Number of stores (at year end) 635 656 653 641 Capital expenditures 57,435 98,712 115,343 S 115,088 632 105.368) Number of stores (at year end) 635 656 653 641 632 Capital expenditures 57,435 98,712 115,343 S 115,088 105,368 Balance Sheet Data (at period end): Cash and cash equivalents 236,222 207.373 186.903 $ 346,159 311,884 Working capital 38,050 24,363 19,113 20,618 (27,630) Total assets Total debt 1,187,607 1,185,189 1,178,644 1,278,150 1,182,670 199,527 199,170 Total stockholders' equity 2017 represents a 53-week year. 654,000 $ 635,687 S 617,953 S 556,339 5 474,569 (1) Comparable sales have been calculated based upon stores that were open at least twelve full months as of the end of the reporting period. For 2017, comparable sales were calculated based upon the 53-week period ended February 3, 2018 compared to the 53-week period ended February 4, 2017. See full definition of comparable sales in the section titled "How We Assess the Performance of Our Business" in Management's Discussion and Analysis of Financial Condition and Results of Operations (2) Working capital is defined as current assets, less cash and cash equivalents, less current liabilities EXPRESS, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousands, Except Per Share Amounts) ASSETS CURRENT ASSETS: Cash and cash equivalents Receivables, net Inventories Prepaid minimum reot Other Total current assets PROPERTY AND EQUIPMENT Less: accumulated depreciation Property and equipment, net TRADENAME/DOMAIN NAMES/TRADEMARKS DEFERRED TAX ASSETS OTHER ASSETS Total assets February 3, 2018 January 28, 2017 236,222 207.373 12,084 15,787 266,271 241,424 30,779 31,626 19,780 17,923 565.136 514,133 1,047,447 1,029,176 (642,434) (577,890) 405,013 451,286 197,618 197,618 7,025 7.926) 12,815 14,226 1.187,607 S 1,185.189 DEFERRED TAX ASSETS OTHER ASSETS Total assets LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable Deferred revenue Accrued expenses Total current liabilities DEFERRED LEASE CREDITS OTHER LONG-TERM LIABILITIES Total liabilities COMMITMENTS AND CONTINGENCIES (Note 13) STOCKHOLDERS' EQUITY Preferred stock $0.01 par value; 10,000 shares authorized; no shares issued or outstanding Common stock $0.01 par value; 500,000 shares authorized; 92,647 shares and 92,063 shares issued at February 3, 2018 and January 28, 2017, respectively, and 76,724 shares and 78,422 shares outstanding at February 3, 2018 and January 28, 2017, respectively Additional paid-in capital dipon.com/Media/Connec httpsjerto-el-media.mheducation.c 7,926 7,025 12,815 14,226 1,187,607 $ 1,185,189 145,589 172,668 28,920 29,428 116,355 80,301 290,864 282,397 137,618 146,328 105,125 120,777 533,607 549,502 926 921 199,099 185,097 IMITMENTS AND CONTINGENCIES (Note 13) STOCKHOLDERS' EQUITY: Preferred stock $0.01 par value; 10,000 shares authorized; no shares issued or outstanding Common stock $0.01 par value; 500,000 shares authorized; 92,647 shares and 92,063 shares issued at February 3, 2018 and January 28, 2017, respectively, and 76,724 shares and 78,422 shares outstanding at February 3, 2018 and January 28, 2017, respectively Additional paid-in capital Accumulated other comprehensive loss Retained earnings Treasury stock-at average cost; 15,923 shares and 13,641 shares at February 3, 2018 and January 28, 2017, respectively Total stockholders' equity Total liabilities and stockholders' equity See notes to consolidated financial statements. 926 921 199,099 185,097 (3,803) 710,081 690,715 (256,106) (237,243) 654,000 635,687 S 1,187,607 S 1,185,189 EXPRESS, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Amounts in Thousands, Except Per Share Amounts) 2017 2016 2015 NET SALES $ 2,138,030 S 2,192,547 2,350,129 COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS 1,522,797 1,529.343 1,554,852 Gross profit 615,233 663,204 795,277 OPERATING EXPENSES Selling, general, and administrative expenses Restructuring costs Other operating expense, net Total operating expenses OPERATING INCOME 562.088 559,541 587,747 22,69 536 585,493 559,603 62 292 588,039 29.740 103,6011 207,238 INTEREST EXPENSE, NET 2.242 13.468 15,882 OTHER (INCOME) EXPENSE, NET INTEREST LATEINAL NET 2.242 13,468 Mige jezio-er-media.mheducation.com 15,882 OTHER (INCOME) EXPENSE, NET (537) (484) 672 INCOME BEFORE INCOME TAXES 28,035 90,617 190,684 INCOME TAX EXPENSE 8,669 33,200) 74.171 NET INCOME 19,366 57,417 $ 116,513 OTHER COMPREHENSIVE INCOME Foreign currency translation gain (loss) Amount reclassified to earnings COMPREHENSIVE INCOME EARNINGS PER SHARE: Basic Diluted WEIGHTED AVERAGE SHARES OUTSTANDING: Basic (402) 5 862 (1.608) 4,205 23,169 $ 58,279 5 114.905 0.25 S 0.73 S 139 0.25 S 0.73 S 1.38 78,5921 78,669 83,980 EXPRESS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Amounts in Thousands) Common Stock Treasury Stock Additional Shares Outstanding Par Value Paid-in Capital BALANCE, January 31, 2015 84,298 $ 904 $ 149,789 Retained Earnings $ 516,785 Accumulated Other Comprehensive Loss Shares At Average Cost Total: (3,057) 6,102 S (108,082) S 556,339 Net income 116,513 116,513 Issuance of common stock 727 7 1,269 Share-based compensation 18,457 1,276 18,457 Repurchase of common stock Foreign currency translation (4,111) 4,111 (73,024) (73,024) (1,608) (1,608) BALANCE, January 30, 2016 80,914 $ 911 $ 169,515 $ 633,298 (4,665) 10,213 S (181,106) $ 617,953 Net income 57,417 57.417 Issuance of common stock 936 10 2.724 2,734 Share-based compensation 12.858 12.858 Issuance of common stock 936 10 2.724 Share-based compensation Repurchase of common stock 12,858 2,734 (3,428) Foreign currency translation 12,858 3,428 (56.137) (56.137) 862 862 BALANCE, January 28, 2017 78,422 S 921 $ 185,097 $690,715 S (3.803) 13,641 $ (237,243) $ 635,687 Net income 19.366 19,366 Issuance of common stock 584 (6 S (1) Share-based compensation 14,008 14,008 Repurchase of common stock (2.282) 2,282 (18,863) (18.863) Foreign currency translation Amount reclassified to camnings (402) (402) 4,205 4,2051 BALANCE, February 3, 2018 76,724 $ 926 $ 199,099 $710,081 $ 15,923 $ (256,106) S 654,000 See notes to consolidated financial statements EXPRESS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Loss on disposal of property and equipment Impairment charge Loss on deconsolidation of Canada Amortization of lease financing obligation discount Excess tax benefit from share-based compensation Share-based compensation Non-cash loss on extinguishment of debt Deferred taxes Landlord allowance amortization Other non-cash adjustments Payment of original issue discount Changes in operating assets and liabilities Receivables, net Inventories Accounts payable, deferred revenue, and accrued expenses Other assets and liabilities Net cash provided by operating activities 2017 2016 2015 S 19.366 S 57417 S 116,513 90,221 82,144 74,904 2.891 942 1.561 9,850 5,108 2,657 10,672 11,354 (347) 14,008 12,858 18,438 - 5.314 (912) 20,065 (10,700) (13,183) (11,280) (12.730) (500) (2,812) 3.279 (28,954) (12,862) 6,371 14,144 (15.857) 1397 (14,625) 17,705 24,691 3442 32.628 11K 567 186708 2396 Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: 118,567 186,708 229,603 Capital expenditures (57.435) (98,712) (115,343) Decrease in cash and cash equivalents resulting from deconsolidation of Canada (9,232) Purchase of intangible assets Investment in equity interests Net cash used in investing activities (21) (35) (10,133) (66,667) (108,866) (115,378 CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of long-term debt (198,038) Costs incurred in connection with debt arrangements (1,006) Payments on lease financing obligations (1,710) (1,595) (1,552 Repayments of financing arrangements (2,040) (3,274) Excess tax benefit from share-based compensation 347 Proceeds from exercise of stock options 2,735 1,276 Repurchase of common stock under share repurchase programs (see Note 9) (17,264) (51,538) (68,574) Repurchase of common stock for tax withholding obligations (1,599) (4,599) (4,450) Net cash used in financing activities (22,613) (58,271) (271,997) EFFECT OF EXCHANGE RATE ON CASH (438) 899 (1.484 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 28,849 CASH AND CASH EQUIVALENTS, Beginning of period 207.373 20,470 186,903 (159,256) 346,159 CASH AND CASH EQUIVALENTS, End of period 236,222 S 207,373 S 186,903 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: 20 points 1 eBook Pris CP10-2 (Static) Finding Financial Information LO10-1, LO10-2, LO10-6 Refer to the financial statements of Express given in Appendix.C. Required: 1. Express does not report paying any cash for interest during the most recent fiscal year. If it had, where would you find the amount listed? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Balance Sheet Income Statement Statement of Cash Flows Footnotes 2. Express has not issued bonds, but it has agreements to borrow money if needed. What is the total amount the company can borrow under what it calls its "Revolving Credit Facility"? (Enter your answer in dollars, not in millions.) Total amount the company can borrow 3. Calculate Express' debt-to-equity ratio. (Round your answer to 2 decimal places.) Express debt-to-equity ratio