AMERICAN EAGLE OUTFITTERS, INC. Consolidated Balance Sheets (In thousands, except per share amounts) Assets Current assets: Cash and cash equivalents February 3, 2018 January 28, 2017 413,613 378,613 Merchandise inventory 398,213 358,446 Accounts receivable, net 78,304 86,634 Prepaid expenses and other 78,400 77,536 Total current assets 968,530 901,229 Property and equipment, net of accumulated depreciation 724,239 707,797 Intangible assets, net of accumulated amortization 46,666 49,373 Goodwill 15,070 14,887 Deferred income taxes 9,344 49,250 Other assets Total assets 52,464 60,124 1,816,313 S 1,782,660 Liabilities and Stockholders' Equity Current liabilities: Accounts payable 236,703 246,204 Accrued compensation and payroll taxes Accrued rent 54,324 54,184 83,312 78,619 Accrued income and other taxes 12,781 12,220 Unredeemed gift cards and gift certificates 52,347 52,966 Non-current accrued income taxes Unredeemed gift cards and gift certificates Current portion of deferred lease credits Other liabilities and accrued expenses. Total current liabilities Non-current liabilities: Deferred lease credits Other non-current liabilities Total non-current liabilities 52,347 52,966 11,203 12,780 34,551 36,810 485,221 493,783 47,977 45,114 7,269 4,537 29,055 34,657 84,301 84,308 Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding Common stock, $0.01 par value; 600,000 shares authorized; 249,566 shares issued; 177,316 and 181,886 shares outstanding, respectively 2,496 Contributed capital 593,770 2,496 603,890 Accumulated other comprehensive loss, net of tax (30,795) (36,462) Retained earnings 1,883,592 1,775,775 Treasury stock, 72,250 and 67,680 shares, respectively, at cost (1,202,272) (1.141,130) Total stockholders' equity Total liabilities and stockholders' equity 1,246,791 1,204,569 $ 1,816,313 $ 1,782,660 Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Stockholders' Equity (In thousands, except per share 1 amounts) Balance at January 31, 2015 Stock awards Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Reissuance of treasury stock Net income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per share) Accumulated Other Shares Outstanding (1) Common Stock Contributed Retained Treasury 194,516 $ 2,496 $ Capital 569,675 Eamings $ 1,543,085 Stock (2) Comprehensive Income (Loss) S (965,566) $ (9,944) $ 31.937 Balance at January 30, 2016 Stock awards Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Reissuance of treasury stock Net income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per (15.563) (324) 1,506 1111 180,135 $ 2,496 (455) 2,200 11111 (227,071) (13,237) (2.332) 218,138 (5,163) 26.461 (19.924) 2,445 (99,624) $ 590,820 $ 1,659,267 $ (1,171,339) 27,877 Stockholders' Equity 1,139,746 31.937 (227,071) (5,163) 10.892 218.138 (19,924) (97,179) $ (29,868) $ 1,051,376 27,877 (17,247) (2,821) 212,449 (7.032) 37.241 (6,594) 2.440 103 1201 (7.032) 17,173 212.449 (6.594) JOO BRAL Cash dividends and dividend equivalents ($0.50 per shore) Balance at January 28, 2017 Stock awards part of publicly announced programs Repurchase of common stock as Repurchase of common stock from employees Reissuance of treasury stock Net income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per share) Balance at February 3, 2018 2.440 (93,120) 181,886 $2,496 $ 603,890 $ 1,775,775 $ (1,141,130) $ (36,462) $ (90.680) 1,204,569 17.202 17,202 (6,000) (871) 2,301 1111 (87.672) (87,672) (29,632) (5,488) 204,163 (12.513) 30,043 (12,513) 3.923 204,163 5.667 5,667 2,310 (90,858) (88,548) 177,316 $ 2,496 $ 593,770 $ 1,883,592 $ (1,202,272) $ (30,795) $ 1,246,791 (1) 600,000 authorized, 249,566 issued and 177,316 outstanding, $0.01 par value common stock at February 3, 2018; 600,000 authorized, 249,566 issued and 181,886 outstanding, $0.01 par value common stock at January 28, 2017; 600,000 authorized, 249,566 issued and 180,135 outstanding, $0.01 par value common stock at January 30, 2016; 600,000 authorized, 249,566 issued and 194,516 outstanding, $0.01 par value common stock at January 31, 2015. The Company has 5,000 authorized, with none issued or outstanding, $0.01 par value preferred stock for all periods presented. (2) 72,250 shares, 67,680 shares and 69,431 shares at February 3, 2018, January 28, 2017 and January 30, 2016 respectively. During Fiscal 2017, Fiscal 2016, and Fiscal 2015, 2,301 shares, 2,206 shares, and 1,506 shares, respectively, were reissued from treasury stock for the issuance of share-based payments. Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Cash Flows: In thousands) Operating activities: Net income Gain from discontinued operations, net of tax Income from continuing operations Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Share-based compensation Deferred income taxes Foreign currency transaction (gain) loss Loss on impairment of assets Gain on sale of assets Changes in assets and liabilities: Merchandise inventory Accounts receivable Prepaid expenses and other Other assets Accounts payable Unredeemed gift cards and gift certificates Deferred lease credits Accrued compensation and payroll taxos Accrued income and other taxes Accrued liabilities Total adjustments Net cash provided by operating activities from continuing operations Investing activities: February 3, 2018 For the Years Ended January 28, 2017 January 30, 2016 204,163 $ 212,449 218.138 (4.847) $ 204,163 $ 212.449 $ 213,291 169,473 158,174 148,858 16.890 29.137 34,977 44,312 14,838 4,680) (5,616) (835) 2.977 20,576 (9,422) (35,912) (53,613) (22.259) 8,837 (7,705) (10,093) (399) (332) (7.027) 5,317 (6.705) (10,017) (16,663) 52.347 (3.189) (874) 4,465 984 (5.229) 755 (4,099) 1,289 (25,809) 34,234 565 (10,695) (17,615) 2,060 (15,467) (14,133) 190,263 153,147 128,627 394,426 365,596 341,918 ixon sens Investing activities: Capital expenditures for property and equipment (169,469) (161,494) Acquisitions and purchase of long-lived assets in business combination Proceeds from sale of assets (153,256) (10.442) 12.579 Acquisition of intangible assets (2,681) (1,528) Net cash used for investing activities from continuing operations (172,150) (163,022) (2.382) (153,501) Financing activities: Payments on capital leases and other (3,384) (4,375) Repurchase of common stock as part of publicly announced programs (87,682) Repurchase of common stock from employees (12,513) (7,032) Net proceeds from stock options exercised 3,355 16,260 (7,635) (227.071) (5,163) 7.283 Excess tax benefit from share-based payments 763 657 Cash dividends paid (88,548) Net cash used for financing activities from continuing operations (188,772) (90.680) (85,064) (97,237) (329,166) Effect of exchange rates on cash Cash flows of discontinued operations Net cash used for operating activities Net cash used for investing activities Net cash used for financing activities Effect of exchange rates on cash 1,496 1,036 (3.076) (6,805) Net cash used for discontinued operations (6,805) Net increase (decrease) in cash and cash equivalents 35,000 118,546 (150,630) Cash and cash equivalents-beginning of period 378,613 $ 260,067 S 410,697 Cash and cash equivalents-end of period 413,613 378.613 260,067 ok Refer to the financial statements of American Eagle Outfitters in Appendix B and answer the following questions. (Hint: Use the notes to the financial statements for some of these questions.) Required: 1. How much did the company spend on property and equipment (capital expenditures) in fiscal year 2017 (the year ended February 3, 2018)? (Enter your answer in dollars.) 2. What is the typical estimated useful life of leasehold improvements for amortization purposes? 3. What was the original cost of fixtures and equipment held by the company at the end of the most recent reporting year? (Enter your answer in dollars.) 4a. What was the amount of depreciation expense on property and equipment for the current year? (Enter your answer in dollars.) 4b. What was the change in accumulated depreciation from fiscal year ended February 3, 2018, to fiscal year ended January 28, 2017. (Enter your answer in dollars.) 5. What is the company's fixed asset turnover ratio for fiscal year ended February 3, 2018? (Round your answer to 2 decimal places.) 1. Property and equipment $ 169,469 2. The estimated useful life of leasehold improvements is the lesser of 10 years or the term of the lease, 3. Cost of fixtures and equipment $ 1,143,140 4a. Current depreciation expense 4b. Accumulated depreciation 5. Fixed asset turnover ratio