Need profit Margin, asset turnover and return of Assests for these two companies.

Prepare a Profitability And Total Asset Management Analysis by calculating for each company the: a) profit margin b) asset turnover c) return on assets AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED BALANCE SHEETS January 31, 2015 February 1. 2014 $ 410,697 278,972 67,894 73,848 59,102 890,513 694,856 47,206 13,096 14,035 37,202 $1,696,908 $ 418,933 10,002 291,541 73,882 88,155 45,478 927,991 632,986 49,271 13,530 24,835 45,551 $1,694,164 (in thousands, expor share am) Assets Current assets: Cash and cash equivalents Short-term investments Merchandise inventory Accounts receivable Prepaid expenses and other Deferred income taxes Total current assets Property and equipment, at cost, net of accumulated depreciation Intangible assets, at cost, net of accumulated amortization Goodwill Non-current deferred income taxes Other assets Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued compensation and payroll taxes Accrued rent Accrued income and other 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 Non-current accrued income taxes Other non-current liabilities Total non-current liabilities Commitments and contingencies Stockholders' equity Preferred stock. S0.01 par value: 5,000 shares authorized; none issued and outstanding Common stock, 30.01 par value; 600,000 shares authorized; 249,566 shares issued; 194,516 and 193,149 shares outstanding, respectively Contributed capital Accumulated other comprehensive income Retained earnings Treasury stock, 55,050 and 56,417 shares, respectively, at cost Total stockholders' equity Total liabilities and stockholders' equity Refer to Notes to Consolidated Financial Statements $191,146 44,884 78,567 33.110 47,888 12.969 50,529 459,093 $ 203,872 23,560 76,397 5,778 47.194 13,293 45.384 415.478 54,516 10,456 33,097 98.069 59,510 16,543 36,455 112.50 2,496 569.675 (9.944) 1,543,085 (965 566) 1.139,746 $1,696,908 2,496 573,008 12,157 1,569.851 1991,334) 1.166.178 $1,694,164 APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report A-5 AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended February 1, 2014 $3,305,802 2,191,803 1,113,999 796,505 February 2. 2013 $3,475,802 2,085,480 1,390,322 834,601 (lushousands, except per share amount) Total net revenue Cost of sales, including certain buying, occupancy and warehousing expenses Gross profit Selling, general and administrative expenses Restructuring charges Loss on impairment of assets Depreciation and amortization expense Operating income Other income, net Income before income taxes Provision for income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income Basic income per common share: Income from continuing operations Loss from discontinued operations Basic net income per common share Diluted income per common share: Income from continuing operations Loss from discontinued operations Diluted net income per common share Weighted average common shares outstanding-basic Weighted average common shares outstanding-diluted January 31, 2015 $3,282,867 2,128,193 1.154,674 806,498 17.752 33,468 141.191 155,765 3.737 159,502 70.715 88,787 (8,465) 80,322 44,465 131,974 141,055 1,022 142,077 59,094 82,983 34,869 126.246 394,606 7.432 402,038 137.940 264,098 (31.990 $ 232,108 $ 82.983 S 0.43 $ 0.46 (0.04) 0.42 1.35 (0.16) 1.19 0.43 S S S 0.43 $ S 0.46 (0.04) 0.42 194,437 195,135 s S 0.43 192.802 1.32 (0.16 1.16 196,211 200,665 A-6 APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Year Ended February 1, January 31, 2015 $ 80,322 2014 $ 82,983 February 2. 2013 $232,108 (in thousand Net income Other comprehensive (loss) income: Foreign currency translation (loss) gain Other comprehensive (loss) income Comprehensive income (22.101) (22.100 $ 58,221 (17.140) (17.140) S 65.843 638 638 $232,746 APPENDIX A American Eagle Outfitters, Inc., 2014 Annual Report A-7 AMERICAN EAGLE OUTFITTERS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Aermulated Other Share Comprehensive Outstanding Como Contributed Retained Treasury Income Stockholders 10 Stock Capital Stark (14) 193,848 S2,496 S 552,797 S1,771,464 $(938,565) S 28,659 $1,416.851 76,108 76,108 11 (8.407) (280) 7,443 - (173.554) (4.125) 125,315 TITIT (11.054) (36,213) 232,108 (173.554) (4,125) 78.248 232.108 638 638 9,214 (414,301) 192,604 S2,496 S 627.065 $1.553.058 1.184 S(990,729) (405,087 29,297 $1,221.187 1,184 flache sands, expo share Balance at January 28, 2012 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 income Cash dividends and dividend equivalents ($2.05 per share) Balance at February 2, 2013 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 income Cash dividends and dividend equivalents (50.375 per share) Balance at February 1, 2014 Stock awards Repurchase of common stock from employees Reissuance of treasury stock Net income Other comprehensive income Cash dividends and dividend equivalents (50.50 per share) Balance at January 31, 2015 (1.600) (1.059) 3.204 TITIL11:11 (33.051) (23,385) 55.831 (56,706) 6.090 82.983 (33,051) (23,385) 5.215 82.983 (17.140) - (17.140) S(991.334) 12.157 1.465 (22.280) 193,149 $2.496 S 573,008 S1.569,851 12,372 (517) 1,884 (17.988) (7,503) 80.322 TETT (7.464) 33,232 (70.815) $1,166,178 12,372 (7.464) 7.741 80.322 (22,101) (22,101) 2.282 (99 5S) 194,516 $2.496 S569.675 $1.343,085 $(965.566 197 302) (9.944) S1,139,746 AMERICAN EAGLE OUTFITTERS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED JANUARY 31, 2015 1. Business Operations American Eagle Outfitters, Inc. (the "Company"), a Delaware corporation, operates under the American Eagle Outfitters * ("AEO") and aerie by American Eagle Outfitters * ("aerie") brands. The Company operated 77kids by American Eagle Outfitters *("77kids") until its exit in Fiscal 2012 Founded in 1977, American Eagle Outfitters is a leading apparel and accessories retailer that operates more than 1,000 retail stores in the U.S. and internationally, online at ac.com and aeric.com and international store locations managed by third-party operators. Through its brands, the Company offers high quality, on-trend clothing, accessories and personal care products at affordable prices. The Company's online business, AEO Direct, ships to 81 countries worldwide. Merchandise Mix The following table sets forth the approximate consolidated percentage of total net revenue from continuing operations attributable to cach merchandise group for each of the periods indicated: January 31, Men's apparel and accessories Women's apparel and accessories (excluding aerie) aerie Total 39% 53% 89 100% For the Years Ended February 1 2014 40% 52% 8% 100% February 2, 2011 39% 52% 99% 100% 2. Summary of Significant Accounting Policies Fiscal Year Our financial year is a 52/53 week year that ends on the Saturday nearest to January 31. As used herein, "Fiscal 2015" refers to the 52 week period ending January 30, 2016. "Fiscal 2014" and "Fiscal 2013" refer to the 52 week period ended January 31, 2015 and February 1, 2014, respectively. "Fiscal 2012" refers to the 53 week period ended February 2, 2013. "Fiscal 2011" and "Fiscal 2010" refer to the 52 week periods ended January 28, 2012 and January 29, 2011, respectively. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, our management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates. Cash and Cash Equivalents, Short-term Investments and Long-term Investments Cash includes cash equivalents. The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. As of February 1, 2014, short-term investments include treasury bills and term-deposits purchased with a maturity of greater than three months, but less than one year. Balance Sheets. As of January 31, 2015 and During Fiscal 2014, the Company recorded pre-tax asset impairment charges of S33.5 million that includes $25.1 million for the pairment of 79 retail stores recorded as a loss on impairment of assets in the Consolidated Statements of Operations. Based on the mpany's evaluation of current and future projected performance, it was determined that these stores would not be able to generate sufficie h flow over the expected remaining lease term to recover the carrying value of the respective stores assets. Additionally, the Company orded $8.4 million of impairment charges related to corporate assets. During Fiscal 2013, the Company recorded asset impairment charges of S44.5 million consisting of $25.2 million for the impairment of retail stores and S19.3 million for the Company's Warrendale, Pennsylvania Distribution Center, recorded as a loss on impairment of asset the Consolidated Statements of Operations. The retail store impairments were recorded based on the results of the Company's evaluation of mores that considered performance during the holiday selling season and a significant portfolio review in the fourth quarter of Fiscal 2013 that onsidered current and future performance projections and strategic real estate initiatives. The Company determined that these stores would no e able to generate sufficient cash flow over the expected remaining lease term to recover the carrying value of the respective stores assets. During Fiscal 2012, the Company recorded asset impairment charges of S34.9 million consisting of the impairment of 52 retail stores, which is recorded as a loss on impairment of assets in the Consolidated Statements of Operations. This impairment was recorded based on the results of the Company's evaluation of stores that considered performance during the holiday selling season and strategic decisions made in the fourth quarter of Fiscal 2012 regarding the rebalancing of our store fleet. The Company determined that these stores would not be able to generate sufficient cash flow over the expected remaining lease term to recover the carrying value of the respective stores assets. Additionally, the Company recorded $16,6 million of store asset impairment charges related to 77kids stores, which is included in Discontinued Operations. Refer to Note 15 to the Consolidated Financial Statements for additional information regarding the discontinued operations for 77kids. When the Company closes, remodels or relocates a store prior to the end of its lease term, the remaining net book value of the assets related to the store is recorded as a write-off of assets within depreciation and amortization expense. Refer to Note 7 to the Consolidated Financial Statements for additional information regarding property and equipment. Revenue Recognition Revenue is recorded for store sales upon the purchase of merchandise by customers. The Company's e-commerce operation records revenue upon the estimated customer receipt date of the merchandise Shipping and handling revenues are included in total net revenue. Sales tax collected from customers is excluded from revenue and is included as part of accrued income and other taxes on the Company's Consolidated Balance Sheets. Revenue is recorded net of estimated and actual sales returns and deductions for coupon redemptions and other promotions. The Company records the impact of adjustments to its sales return reserve quarterly within total net revenue and cost of sales. The sales return reserve reflects an estimate of sales returns based on projected merchandise returns determined through the use of historical average return percentages For the Years Ended January JI, February 1, February 2 (I thousands) Beginning balance 2.205 S4,481 $ 2,929 Returns (79,813) (85,871) (86,895) Provisions 80,857 83.595 88,447 Ending balance 3,249 $ 2,205 $ 4,481 2014 2013 AMERICAN EAGLE OUTFITTERS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 3. Cash and Cash Equivalents, Short-term Investments and Long-term Investments The following table summarizes the fair market value of our cash and marketable securities, which are recorded on the Consolidated Balance Sheets: 2015 January 31, February 1. (la thousands) 2014 Cash and cash equivalents: Cash 370,692 $330,013 Money-market 40,005 25,696 Treasury bills 63,224 Total cash and cash equivalents 410,697 $418,933 Short-term investments: Treasury bills $ 10,002 Total short-term investments $ 10,002 Total 410,697 $428,935 Proceeds from the sale of available-for-sale securities were $10.0 million, $162.8 million and $15.5 million for Fiscal 2014, Fiscal 2013 and Fiscal 2012, respectively. Purchases of available-for-sale securities for Fiscal 2013 and Fiscal 2012 were $52.1 million and $111.1 million respectively. At January 31, 2015 and February 1, 2014, the fair value of all available for sale securities approximated par, with no gross unrealized holding gains or losses. 4. Fair Value Measurements ASC 820, Fair Value Measurement Disclosures ("ASC 820"), defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. Fair value is defined under ASC 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date. Financial Instruments Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. In addition, ASC 820 establishes this three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level I - Quoted prices in active markets for identical assets or liabilities Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 - Unobservable inputs (i.e., projections, estimates, interpretations, etc.) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of January 31, 2015 and February 1, 2014, the Company held certain assets that are required to be measured at fair value on a recurring basis. These include cash equivalents and investments. 2013 2015 5. Earnings per Share The following is a reconciliation between basic and diluted weighted average shares outstanding: For the Years Ended January 31, February 1, February 2 (in thousands, except per share amount) 2014 Weighted average common shares outstanding: Basic number of common shares outstanding 194,437 192,802 196,211 Dilutive effect of stock options and non-vested restricted stock 698 1,673 4,454 Dilutive number of common shares outstanding 195, 135 194.475 200,665 Equity awards to purchase approximately 2.3 million, 1.7 million and 1.5 million shares of common stock during the Fiscal 2014, Fiscal 2013 and Fiscal 2012, respectively, were outstanding, but were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive. Additionally, for Fiscal 2014, approximately 1.9 million of performance-based restricted stock awards were not included in the computation of weighted average diluted common share amounts because the number of shares ultimately issued is contingent on the Company's performance compared to pre-established performance goals. For Fiscal 2013, approximately 1.8 million of performance-based restricted stock awards were not included in the computation of weighted average diluted common share amounts because the number of shares ultimately issued is contingent on the Company's performance compared to pre-established performance goals. Refer to Note 12 to the Consolidated Financial Statements for additional information regarding sharo-based compensation AMERICAN EAGLE OUTFITTERS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 6. Accounts Receivable Accounts receivable are comprised of the following: January 31, February 1, (In thousands) Franchise and license receivable Merchandise sell-offs and vendor receivables Credit card program receivable Marketing cost reimbursements Gift card receivable Landlord construction allowances Other Items Total 2015 $ 24,945 12,953 9,637 4,640 4,453 3,354 7912 $ 67,894 2014 $ 22,943 16,106 15,000 6,063 986 11,626 1.158 $ 73,882 7. Property and Equipment Property and equipment consists of the following: January 31, February 1. (in thousands 2015 Land 17,495 $ 17,986 Buildings 201.024 140.600 Leasehold improvements 571,312 600,572 Fixtures and equipment 852.408 732,228 Construction in progress 42.470 102,974 Property and equipment, at cost $1,684,709 $1,594,360 Less: Accumulated depreciation (989.853) (961,374) Property and equipment, net $ 694,856 S 632.986 Depreciation expense is summarized as follows: For the Year Ended January 31, February 1, February 2 (in thousands 2015 2014 2013 Depreciation expense $ 132,529 S116,761 S122,756 Additionally, during Fiscal 2014, Fiscal 2013 and Fiscal 2012, the Company recorded $6.4 million, 514.6 million and $3.7 million, respectively, related to asset write-offs within depreciation and amortization expense. 8. Intangible Assets Intangible assets include costs to acquire and register the Company's trademark assets. The following table represents intangible assets as of January 31, 2015 and February 1, 2014 Trademarks, at cost Less: Accumulated amortization Intangible assets, net January 31, 2015 $ 59,385 (12/179) $ 47,206 February 1 2014 S 58,121 (8.850) $ 49,271 APPENDIX B The Buckle, Inc., 2014 Annual Report B-7 THE BUCKLE, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share and Per Share Amounts) January 31, 2015 February 1. 2014 ASSETS $ $ CURRENT ASSETS Cash and cash equivalents Short-term investments (Notes A, B, and C) Receivables Inventory Prepaid exposes and other sets (Nome) Total current sets 133,709 25857 8567 129,921 26536 324,589 164 20,197 4,318 124,141 28,613 342,137 PROPERTY AND EQUIPMENT (Note ) Les acumulated depreciation and mortation 427,915 255.252) 1726 393,656 (235,057) 158.569 43.6 200 43,436 2.151 LONG-TERM INVESTMENTS (Notes A. Band) OTHER ASSETS (Now C) 542.99 $ 546.293 LIABILITIES AND STOCKHOLDERS' EQUITY 37.14 M93 CURRENT LIABILITIES Accounts payable Accrued employee compensation Accrued store operating expenses Gift certificeredeemable Income taxes payable Total current 35,714 5 30 9.94 23.092 15.661 133.271 2013 16.187 14,361 12,797 37.564 10,617 1000 DEFERRED COMPENSATION (Note 1) DEFERRED RENT LIABILITY OTHIER LIABILITIES (Not) Toallities 184.16 COMMITMENTS (Notes and H) STOCKHOLDERS' EQUITY (Note: Common stock, stored 100,000,000 shares of s.1 para: 48.379,613 und 4,136.193 shares January 31, 2015 February 1, 2014, respectively Additional polid-in capital Reed Accumulated other comprehensive loss Tolstockholdersly 36.00 W a C B-8 APPENDIX B The Buckle, Inc., 2014 Annual Report THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF INCOME (Amounts in Thousands Except Per Share Amounts) January 31, 2015 Fiscal Years Ended February 1, 2014 February 2, 2013 SALES, Net of retums and allowances of $110,793, 5108,851 and 5106,612, respectively 1.153.142 5 1,128,001 s 1.124,007 COST OF SALES (Including buying, distribution, and occupancy costs) 645,810 628,856 624,692 Gross profit 507332 499,145 499.315 OPERATING EXPENSES: Selling General and administrative 201,963 212.688 37.671 250.159 206,893 35.258 242.151 39,177 241.140 256.973 256.994 INCOME FROM OPERATIONS OTHER INCOME, Net (Note A) 258,175 2.723 3.462 3,524 INCOME BEFORE INCOME TAXES 259.696 260.456 261.699 PROVISION FOR INCOME TAXES (Note) 97,132 97872 97394 NET INCOME S 162,364 $ 162,584 $ 164305 EARNINGS PER SHARE (Note: Basic 3.395 3415 3.47 Diluted 3.38 $ 3.39 $ 3.44 See notes to consolidated financial statements APPENDIX B The Buckle, Inc., 2014 Annual Report B-9 THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thousands) January 31, 2015 Fiscal Years Ended February 1, 2014 February 2, 2013 NET INCOME 162.864 5 162.554 $ 164.305 OTHER COMPREHENSIVE INCOME, NET OF TAX: Change in realized loss on investments, net of tax of $240, 536, and S(138), respectively Other comprehensive income (235) 409 109 COMPREHENSIVE INCOME 162.973 162.680 $ 16.2010 See notes to consolidated financial statements B-10 APPENDIX B The Buckle, Inc., 2014 Annual Report THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Amounts in Thousands Except Share and Per Share Amounts) Acumulated Other Comprehensive Low Number of Share Addial Paldia Capital Cem Stock Heted Farnings Total 47.432.089 $ BALANCE, January 28, 2012 100333 5 261,019 5 (609) $ 363.147 164305 (254,633) 164,105 (254,693) 377.530 249.660 842 30 3 Net income Dividends pas comme (3.1 per share Common rock med en serie of skeptions Iance of non venind of forfeitures Amortion of non-vested sock grant, net of for Income tax benefit related to exercise of wock options Change in domenica, net of BORN 7.31 7,831 235) 4.09.16 BALANCE. February 2, 2013 $ 41 S 117.91 172.7115 S 1934) 29.59 19.384 97.144 163.354 97.144) Netcome Dividends pas common rock, (520) Commen women exercise of options of none of forferes Amin of the of 25.355 251.56 LI-IL HIT - LILIT 2 (2) 5.000 06 1.679 Income tax benefit related to exercise of rock options 1.679 BALANCE. Powry 1, 2014 4.336391 5 134,114 5 BIS 5 -- 16.64 Netcome Dends paid on mood (3.6 persone (17.404) 116.000 70 10 26.130 Amenities of cock of Income wa benefit od to exercise of 4 124.111 See notes to consolidated financial statements APPENDIX B The Buckle, Inc., 2014 Annual Report B-11 THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) January 31, 2015 Fiscal Years Ended February 1, 2014 February 2, 2013 5 162.564 162,584 S 164 JOS 31.679 6,013 (1.675) 1.163 32,631 5,066 2,036) 33.834 8.388 (1939) 1.528 958 (2.134) (5,780) 3.508 (2.915) (13) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income Adjustments to reconcile net income to net cash flows from operating activities Depreciation and amortization Amortization of non-vested stock grants, net of forfeitures Deferred income taxes Other Changes in operating assets and liabilities: Receivables Inventory Prepaid expenses and other assets Accounts payable Accrued employee compensation Accrued store operating expenses Gift certificates redeemable Income taxes payable Deferred rent liabilities and defemed compensation Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment Proceeds from sale of property and equipment Other Purchases of investments Proceeds from sales maturities of investments (989) (20.288) 0.355) 2.738 5.250) (138) 910 (2.699) 2.314 596 356 (10.281) 6,534 1671) (1.004) 1.935 14,897 361 (1970) 4460 195,761 174.626 220,941 (45,454) 108 (43.404) 3,13 CNNID) 11 112 02314) 30,981 (30.297) 1.140 130 09.933) 37.294 Net cash flows from investing activities (50.619 (30,021) (21.666) 70 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the exercise of stock options Excess tax benefit from stock option exercises Payment of dividends 399 846 5.600 (254,633) (176,604) 197.144) (176,309) (96,745) (248.178) Net cash flows from financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 01.160) 47260 (48,903) CASH AND CASH EQUIVALENTS, Beginning of year 16468 117.608 166.311 133,700 16468 117,608 CASH AND CASH EQUIVALENTS, End of year See notes to consolidated financial statements D. PROPERTY AND EQUIPMENT January 31, 2015 February 1, 2014 $ Land Building and improvements Office equipment Transportation equipment Leasehold improvements Fumiture and fixtures Shipping/receiving equipment Screenprinting equipment Construction in progress Total 2,165 28.033 10.080 20,790 154441 167.373 27.172 111 17.548 427915 2,165 28,006 9,357 20,782 146,655 157,771 26,392 111 2417 393,656 $ S E. FINANCING ARRANGEMENTS The Company has available an unsecured line of credit of $25,000 with Wells Fargo Bank, NA. for operating needs and letters of credit. The line of credit provides that outstanding letters of credit cannot exceed $20,000. Borrowings under the line of credit provide for interest to be paid at a rate based on LIBOR. The Company has, from time to time, bomowed against these lines during periods of peak inventory build-up. There were no bank borrowings as of January 31, 2015 and February 1, 2014. There were no bank borrowings during fiscal 2014, 2013, and 2012. The Company had outstanding letter of credit totaling $2,026 and 53.226 as of January 31, 2015 and February 1, 2014, respectively. The line of credit agreement was amended effective February 16, 2015, subsequent to the end of the fiscal year. The amended agreement extended the expiration date of the note from July 31, 2015 to July 31, 2017 and reduced the amount available for letters of credit from $20,000 to $10,000. H. COMMITMENTS Lesses - The Company conducts its operations in leased facilities under numerous non-cancelable operating leases expiring of various dates through fiscal 2025. Most of the Company's stores have lease terms of approximately ten years and generally do not contain renewal options. Most lease agreements contain tenant improvement allowances, rent holidays, rent escalation clauses, and/or contingent rent provisions. For purposes of recognizing lease incentives and minimum rental expenses on a straight-line basis over the terms of the leases, the Company uses the date of initial possession to begin amortization, which is generally when the company enters the space and begins to make improvements in preparation of intended use. For tenant improvement allowances and rent holidays, the Company records a deferred rent liability on the consolidated balance sheets and amortizes the defererent over the terms of the leases as reductions to rent expense on the consolidated statements of income. For scheduled rent escalation clauses during the lease terms or for rental payments commenting at a date other than the date of initial occupancy, the Company records minimum rental expenses on a straight-line basis over the terms of the leases on the consolidated statements of income. Certain lenses provide for contingentrents, which are determined as a percentage of gross sales in excess of specified levels. The Company records a contingent rent liability on the consolidated balance sheets and the corresponding in expense when specified levels have been achieved or are reasonably probable to be achieved. Operating lease base rental expense for fiscal 2014, 2013, and 2012 was $65,712, 561.640, and 558,683, respectively. Most of the rental payments are based on a minimum annual rental plus a percentage of sales in excess of a specified amount. Percentage rents for fiscal 2014, 2013, and 2012 were $4,434,85.080, and $5,163, respectively, Total future minimum rental commitments under these operating lases with remaining lense terms in excess of one year of January 31, 2015 are as follows: Fiscal Year Minimum Rental Commitments 2015 2016 2017 2018 2019 Thereafter Total minimum rental commitments 66,147 61,388 56.030 48.842 41.155 92.540 366,292 Litigation. From time to time, the Company is involved in litigation relating to claims arising out of its opentions in the normal course of business. As of the date of these consolidated financial statements, the Company was not engaged in any legal proceedings that are expected individually or in the aggregate, to have a material effect on the Company B-14 APPENDIX B The Buckle, Inc, 2014 Annual Report K. EARNINGS PER SHARE The following table provides reconciliation between basic and diluted camings per share: January 31, 2015 Weighted Average Share Fiscal Years Ended February 1, 2014 Weighted Average Per Share Income Shares Amount February 2, 2013 Weighted Average Shares Per Share Amount Per Share Amount Tacone Income $ 162.564 $ 162,584 47.744 $ 47.927 3:41 47.300 164.JOS S 3.47 Basie EPS Effect of De Securities Stock options and vest shares Dilwal EPS (0.03) 163 48.0905 (0.01) 3.38 232 47.976 0.00) 3.39 121 47.710 $ 162,564 $ 162384 5 $ 161JOS 5 No stock options were deemed anti-dilutive and excluded from the computation of diluted comings per share for fiscal 2014, 2013 or 2012 L. SEGMENT INFORMATION The Company is a retailer of medium to better priced casual apparel, footwear, and accessories. The Company operates its business as one reportable segment. The Company operated 460 stores located in 44 states throughout the United States as of January 31, 2015. The following is information regarding the Company's major product lines, stated as a percentage of the Company's net sales: Fiscal Years Ended February 1, 2014 Jasoary 31, 2015 Merchandise Group February 2, 2013 Denims Tops (including weater) Accessories Sportswear Fashions Footwear Outerwear Calbomoms Other Total 43 JOX M 62 59 23 12 45.34 30.2 83 6.0 38 23 0,9 10 100.0% 46,4% 309 84 5.7 53 22 OS 03 100 % 1000%