ed CP9-1 (Static) Finding Financial Information LO9-1, LO9-2, LO9-5, LO9-6 Refer to the financial statements and footnotes of American Eagle Outfitters given in Appendix B Required: 1. What is the amount of accrued compensation and payroll taxes at the end of the most recent reporting year? (Enter your answer in whole dollars.) 2. In Chapter 9 we have used the term "deferred revenue." What term does American Eagle use to reflect cash that it has received for goods or services that it will provide in the future (specifically their gift cards and gift certificates)? 3. For the most recent year, compute the accounts payable turnover ratio for American Eagle. (Round your answer to 2 decimal places.) 4. What is the amount of long-term liabilities at the end of the most recent reporting year? (Enter your answer in whole dollars.) 1. Accrued compensation and payroll taxes 2. Term used for "deferred revenue 3. Accounts payable turnover ratio 4. Long-term liabilities AMERICAN EAGLE OUTFITTERS, INC. Consolidated Balance Sheets (In thousands, except per share amounts) Assets Current assets: Cash and cash equivalents. Merchandise inventory Accounts receivable, net Prepaid expenses and other Total current assets Property and equipment, net of accumulated depreciation Intangible assets, net of accumulated amortization Goodwill Deferred income taxes i Other assets February 3, 2018- January 28, 2017 413,613 378,613 398,213 358,446 78,304 86,634 78,400 77.536 968,530 901,229 724,239 707,797 46,666 49,373 15,070 14,887 9,344 49,250 52,464 60,124 1,816,313 $ 1,782,660 Total assets 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 Current portion of deferred lease credits 11,203 12,780 Other liabilities and accrued expenses Total current liabilities: Non-current liabilities: 34,551 36,810 485.221 493,783 Non-current liabilities: Deferred lease credits 47,977 45,114 Non-current accrued income taxes 7,269 4,537 Other non-current liabilities 29,055 34,657 Total non-current liabilities 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 Treasury stock, 72,250 and 67,680 shares, respectively, at cost (1,202,272) 1,775,775 (1,141,130) Total stockholders' equity 1,246,791 1,204,569 Total liabilities and stockholders' equity 1,816,313 1,782,660 Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Operations For the Years Ended February 3, January 28, January 30, (In thousands, except per share amounts) Total net revenue Cost of sales, including certain buying, occupancy and warehousing expenses Gross profit Selling, general and administrative expenses Impairment and restructuring charges Depreciation and amortization expense Operating income Other (expense) income, net 2018 2017 2016 $ 3,795,549 3,609,865 $ 3,521,848 2,425,044 2,242,938 2,219,114 1,370,505 1,366,927 1,302,734 879,685 857,562 834,700 20,611 21,166 0 167,421 156,723 148,156 302,788 331,476 319,878 (15.615) 3,786 1,993 Income before income taxes 287,173 335,262 321.871 Provision for income taxes 83,010 122,813 108,580 Income from continuing operations 204,163 212,449 213,291 Discontinued operations, net of tax 4,847 Net income 204,163 212,449 $ 218,138 Basic income per common share: Income from continuing operations Discontinued operations Basic net income per common share Diluted income per common share: Income from continuing operations Discontinued operations 1.15 1.17 $ 1.10 0.02 1.15 $ 1.17 $ 1.12 1.13 1.16 1.09 0.02 Basic income per common share: Income from continuing operations Discontinued operations Basic net income per common share Diluted income per common share: 1.15 1.17 1.10 0.02 S 1.15 $ 1.17 S 1.12 1.13 $ 1.16 $ 1.09 0.02 1.13 $ 1.16 $ 1.11 Income from continuing operations Discontinued operations Diluted net income per common share Weighted average common shares outstanding - basic Weighted average common shares outstanding - diluted Refer to Notes to Consolidated Financial Statements 177,938 181,429 194,351 180.156 183,835 196,237 AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Comprehensive Income (In thousands) Net income Other comprehensive gain (loss): Foreign currency translation gain (loss) Other comprehensive gain (loss) Comprehensive income February 3, 2018 204,163 5,667 5,667 For the Years Ended January 28, 2017 212,449 (6,594) (6,594) January 30, 2016 218,138 (19,924) (19,924) 209.830 S 205,855 $ 198,214 Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Stockholders' Equity (In thousands, except per share 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) 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 stocki Net income Other comprehensive loss Cash dividends and dividend Shores Outstanding (1) Common Stock 194,516 $ 2.496 Contributed Capital $ 569,675 31,937 Retained Earnings Treasury Stock (2) $ 1,543,085 $ (965,566) S Accumulated Other Comprehensive Income (Loss) (9,944) 5 (15,563) (227.071) (324) 1,506 (13,237) (2.332) 218,138 (5,163) 26.461 (19,924) Stockholders Equity 1,139,746 31,937 (227.071) (5,163) 10,892 218,138 (19.924) 2,445 (99,624) (97,179) 180,135 $ 2,496 $ 590,820 $ 1,659,267 $ (1.171,339) $ (29.868) $ 1,051,376 27,877 27.877 (455) 2,206 (17.247) (2.821) 212,449 (7,032) 37.241 (7.032) 17.173 212,449 (6.594) (6,504) equivalents ($0.50 per share) Balance at January 28, 2017 Stock awards 181,886 $ 2,496 $ 2.440 603,890 17.202 (93.120) $1,775,775 (90,680) $ (1.141,130) $ (36,462) $ 1,204,569 17307 Stock awards Reissuance of treasury stock Net income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per share) Balance at January 28, 2017 Repurchase of common stock as 2.206 111 (17.247) (2,821) 212,449 37,241 17.173 212.449 (6.594) (6,594) 2,440 (93,120) (90,680) 181,886 $ 2,496 $ 603,890 $ 1,775,775 17,202 $ (1,141,130) $ (36,462) $ 1,204,569 17.202 part of publicly announced programs (6,000) (87,672) (87,672) Repurchase of common stock from employees (871) Reissuance of treasury stock 2,301 (29,632) Net income Other comprehensive loss Cash dividends and dividend equivalents ($0.50 per share) (5,488) 204,163 (12,513) 39,043 (12,513) 3,923 204.163 5,667 5.667 2.310 (90.858) (88,548) Balance at February 3, 2018 177.316 $ 2,496 S 593,770 $ 1,883,592 $ (1,202,272) 5 (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 For the Years Ended (In thousands) Operating activities: Net income February 3, 2018 January 28, 2017 January 30, 2016 204,163 $ 212,449 $ 218,138 Gain from discontinued operations, net of tax (4,847) Income from continuing operations $ 204,163- S 212,449 S 213,291 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 148,858 Share-based compensation 34,977 Deferred income taxes Foreign currency transaction (gain) loss 169,473 158,174 16,890 29.137 44.312 14.838 4,680 (5.616) (835) 2,977 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 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) 4,465 755 Deferred lease credits 984 (5.229) (4,099) Accrued compensation and payroll taxes 1,289 (25,809) 34,234) Accrued income and other taxes 565 (10,695) (17,615) Accrued liabilities 2.060 (15,467) (14,133) Total adjustments 190,263 153,147 128.627 Net cash provided by operating activities from continuing operations 394,426 365,596 341,918 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 Total adjustments 190,263 153,147 128,627 Net cash provided by operating activities from continuing operations 394,426 365,596 341,918 Investing activities: Capital expenditures for property and equipment (169.469) (161,494) (153,256) Acquisitions and purchase of long-lived assets in business combination (10.442) Proceeds from sale of assets Acquisition of intangible assets: (2.681) (1,528) Net cash used for investing activities from continuing operations (172,150) (163,022) 12.579 (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) (7,635) (227,071) Repurchase of common stock from employees (12.513) (7,032) (5,163) Net proceeds from stock options exercised 3,355 16,260 7,283 Excess tax benefit from share-based payments Cash dividends paid (88.548) Net cash used for financing activities from continuing operations (188,772) 763 (90,680) (85,064) 657 (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 Net cash used for discontinued operations Net increase (decrease) in cash and cash equivalents Cash and cash equivalents-beginning of period Cash and cash equivalents-end of period 1,496 1,036 (3,076) (6.805) (6,805) 35,000 118,546 (150,630) 378,613 S 260.067 $ 410,697 413,613 378,613 260,067 Refer to Notes to Consolidated Financial Statements