Required: 1. Calculate American Eagle's percentage change in total assets and percentage change in net sales for the most recent ye 2. Calculate American Eagle's percentage change in net income for the most recent year. 3. Did American Eagle issue any common stock in the most recent year? 4-a. Do you see the term debit or credit listed in the balance sheet? 4-b. Which account types in the balance sheet increase with a debit and which ones increase with a credit? 5-a. Do you see the term debit or credit listed in the income statement? 5-b. Which account types in the income statement increase with a debit? Which increase with a credit? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4a Required 4b Required Sa Required Sb Calculate American Eagle's percentage change in total assets and percentage change in net sales for the most recent year. (Round your answers to 1 decimal place.) Percentage change in total assets % Percentage change in net sales Required 1 Required 2 > A-4 APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report AMERICAN EAGLE OUTFITTERS, INC. Consolidated Balance Sheets n thousands except per share amounts Assets Current assets February 1, 2020 February 2 2019 Cash and cash equivalents Short-term investments (available for sale) Merchandise inventory 361,930 55,000 $ 333,330 92,135 446,278 Accounts receivable, net 119,064 Prepaid expenses and other 65,658 Total current assets 1,047,930 Property and equipment, at cost, net of accumulated depreciation 735,120 424,404 93,477 102,907 1,046,253 742,149 Operating lease right-of-use assets 1,413,916) Intangible assets, net, including goodwill 53,004 58,167 Non-current deferred income taxes 22,724 14,062 Other assets 50,985 3,328,679 42,747 1,903,378 Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Current portion of operating lease lablities Accrued income and other taxes Accrued compensation and payroll taxes Unredeemed gift cards and gift certificates Other current liabilities and accrued expenses Total current liabilities Non-current liabilities: Other non-current liabilities 285,746 299,161 240,671 9,514 20,064 43,537 82,173 56,974 53,997 56,824 145,740 751,756 542,645 1,301,735 27.335 73,178 1,329 070 73.178 Non-current operating lease liabilities Total non-current liabilities 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, 506 shares issued: 166,993 and 172,436 shares outstanding, respectively 2,496 Contributed capital 577,856 2,496 574,929 Accumulated other comprehensive loss, net of tax (33,168) (34,832) Retained earnings 2,108,292 2,054,654 Treasury stock 82.573 and 77,130 shares, respectively, at cost Total stockholders' equity (1.407.623) (1,309,602) 1.247.855 1.287,555 Total labilites and stockholders' equity 3,328,679 1,903,378 Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Operations in thousands, except per share amounts) Total net revenue Cost of sales, including certain buying, occupancy and warehousing expenses Gross proft Selling general and administrative expenses Impairment and restructuring charges Depreciation and amortization expense Operating income Other income (expense), net Income before income taxes Provision for income taxes Net income Basic net income per common share Diluted net income per common share Weighted average common shares outstanding basic Weighted average common shares outstanding diluted February 1, 2020 4,308,212 1,029,412 For the Years Ended February 2 February 3. 2019 2018 4,035,720 $ 3,795,549 2,785,911 2,548,082 2,425,044 1,522,301 1,487,638 1,370,505 980,610 879,685 80,494 1,568 20,611 179,050 168,331 167,421 233,345 337,129 302,788 11,933 7.971 (15,615) 245,278 345,100 287,173 54,021 83,198 83,010 191,257 S 261,902 204,163 1.13 $ 1.48 S 1.15 1.12 1.47 1.13 169,711 176,476 177.938 170,867 178,035 180,156 Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Comprehensive Income Net income Other comprehensive gain (loss) Foreign currency translation gain (loss) Other comprehensive gain (loss) Comprehensive income For the Years Ended February 1, 2020 February 2 2019 February 3, 2018 191,257 $ 261,902 $ 204,163 1,664 (4,037) 5,667 1,664 (4,037) 5,667 192.921 $ 257,865 209,830 Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Stockholders' Equity Accumulated Other In thousands, except per share amounts) Balance at January 28, 2017 Stock awards Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Shares Common Contributed Retained Outstanding (1) Stock Capital Earnings 181,886 $ 2,496 $ 603,890 $1,775,775 17,202 Treasury Stock (2) $(1,141,130) $ (6,000) (871) (87.672) Comprehensive Income (Loss) Stockholders' Equity (36,462) $1,204,569 17.202 (87,672) Reissuance of treasury stock 2,301 (29,632) Net income (5,488) 204,163 (12,513) 39,043 (12,513) 3,923 204,163 Other comprehensive loss 5,667 5,667 Cash dividends and dividend equivalents ($0.50 per share) 2,310 Balance at February 3, 2018 177,316 2,496 $ 593,770 (90,858) $ 1,883,592 (88,548) $(1,202,272) $ (30,795) $1,246,791 Stock awards 27,057 27,057 Repurchase of common stock as part of publicly announced programs (7,300) (144,405) (144,405) Repurchase of common stock from employees (943) (19,668) (19,668) Reissuance of treasury stock 3,363 (48,022) Net income 8,407 261,902 56,653 17,038 261,902 Other comprehensive loss (4,037) (4,037) Cash dividends and dividend equivalents ($0.55 por share) Balance at February 2, 2019 Stock awards 172,436 2,496 2.124 574,929 22,742 (99,247) $ 2,054,654 (97,123) $ (1,309,692) (34,832) $1,287,555 22,742 Repurchase of common stock as part of publicly announced programs Repurchase of common stock from employees Net income Adoption of ASC 842, net of taxi Reissuance of treasury stock Other comprehensive loss Cash dividends and dividend equivalents ($0.55 per share) (6,336) (431) 1,324 (112,381) (8,087) (22,175) (44,435) 1,959. 191,257 22,537 (112,381) (8,087) (44,435) 2,321 1,664 191,257 1,664 2,360 Balance at February 1, 2020 166,993 $ $ 577,856 2,496 (95,143) $2,108,292 $(1,407,623) $ (92.783) (33,168 $ 1,247,853 (1) 600,000 authorized, 249,566 issued and 166,993 outstanding, $0.01 par value common stock at February 1, 2020; 600,000 authorized, 249,566 issued and 172,436 outstanding, $0.01 par value common stock at February 2, 2019; 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. The Company has 5,000 authorized, with none issued or outstanding, $0.01 par value preferred stock for all periods presented. (2) 82,573 shares, 77,130 shares and 72,250 shares at February 1, 2020, February 2, 2019 and February 3, 2018 respectively. During Fiscal 2019, Fiscal 2018, and Fiscal 2017, 1,324 shares, 3,363 shares, and 2,301 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 Adjustments to reconcile net income to net cash provided by operating February 1, 2020 191,257 $ For the Years Ended February 2, 2019 February 3, 2018 261,902 $ 204,163 activities Depreciation and amortization Share-based compensation 181,379 23,038 170,504 27,506 169,473 16,890 6,541 Deferred income taxes Loss on impairment of assets Changes in assets and liabilities: Merchandise inventory Operating lease assets Operating lease liabilities Other assets Accounts payable Accrued compensation and payroll taxes Accrued and other liabilities Net cash provided by operating activities Investing activities Capital expenditures for property and equipment 66,252 (4.391) 546 44,312 (21,615) (28,496) (35,912) 261,303 (271,519) (32,845) (22,206) 44,949 4,329 (38,603) 28.043 5,279 18,908 13,755 (16,663) 1,289 (2,681) 415,416 456,645 394,426 (210,360) (189,021) (169,469) Purchase of available-for-sale investments i (85,000) (202,912) Sale of available-for-sale investments 122,135 109,776 Other investing activities (1,669) (672) Net cash used for investing activities (174,894) (282,829 (2.681) (172,150) Financing activities: Repurchase of common stock as part of publicly announced programs (112,381) (144,405) Repurchase of common stock from employees (87,682) (8,087) (19,668) (12,513) Net proceeds from stock options exercised 2,119 15,495 3,355 Cash dividends paid (92,783) Other financing activities (97,123) Net cash used for financing activities Effect of exchange rates on cash (94) (211,226 (6,802) (252,503) (696) Net change in cash and cash equivalents (1.596) Cash and cash equivalents-beginning of period 28,600 (80,283) (88,548) (3.384) (188,772) 1,496 35,000 333,330 Cash and cash equivalents end of period 413.613 378,613 361.930 333,330 413.613 Refer to Notes to Consolidated Financial Statements A-8 APPENDIX A American Eagle Outfitters, Inc., 2020 Annual Report AMERICAN EAGLE OUTFITTERS, INC. Consolidated Statements of Cash Flows Thousands Operating activities: Net Income Adjustments to reconcile net income to net cash provided by operating February 1, 2020 For the Years Ended February 2 2019 February 3, 2018 191,257 $ 261,902 $ 204,163 activities Depreciation and amortization 181,379 Share-based compensation Deferred income taxes Loss on impairment of assets Changes in assets and liabilities Merchandise inventory Operating lease assets Operating lease abilities Other assets Accounts payable Accrued compensation and payroll taxes Accrued and other liabilities Net cash provided by operating activities Investing activities Pechase of available-for-sale investments 23,038 170,504 27.506 169,473 16,890 6,541 66,252 (4.391) 546 44,312 (21,615) (28.496) (35,912) 261,303 (271,519) (32,845) 44.949 (22.206) 4.329 (38,603) 28.043 5.279 18.908 13,755 (16,663) 1,289 (2.881) 415,416 456,645 394,426 Capital expenditures for property and equipment (210,360) (189,021) (169,469) (65.000) (202.912) Sale of available-for-sale investments 122,135 109,776 Other investing activities (1.669) (672) (2.681) Net cash used for investing activities (174,894) (282,829) (172,150) Financing activities: Repurchase of common stock as part of publicly announced programs (112.381) (144,405) Repurchase of common stock from employees (87.682) (8.087) (10,000) Net proceeds from stock options exercised (12.513) 2.119 15,495 3.355 Cash dividends paid 92,783) Other financing activities Net cash used for financing activities Effect of exchange rates on cash Net change in cash and cash equivalents Cash and cash equivalents-beginning of period Cash and cash equivalents end of period (97.123) (04) (211,226) (696 (1.596 28,600 (00,203) (6,802) (262,503 (88.548) (3.384) (168,772) 1,496 35,000 333,330 361.930 $ 413,613 378,613 333,330 413.013 Refer to Notes to Consolidated Financial Statements AMERICAN EAGLE OUTFITTERS, INC. Notes to Consolidated Financial Statements For the Year Ended February 1, 2020 1. Business Operations American Eagle Outfitters, Inc. (the "Company," "we" and "our"), a Delaware corporation, operates under the American Eagle ("AE) and Aerie brands. We also operate Tailgate, a vintage, sports-inspired apparel brand with a college town store concept, and Todd Snyder New York, a premium menswear brand. Founded in 1977, the Company is a leading multi-brand specialty retailer that operates more than 1,000 retail stores in the U.S. and internationally, online at www.ae.com and www.aerie.com. www.toddsnyder.com and more than 200 international store locations managed by third-party operators Through its portfolio of 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 operations attributable to each merchandise group for each of the periods indicated Men's apparel and accessories Women's apparel and accessories (excluding Aerie) Aerie Total February 1. For the Years Ended February 2 February 3. 2020 2019 2018 29% 32% 34% 52% 52% 53% 19% 16% 13% 100% 100% 100% 2. Summary of Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. At February 1, 2020, the Company operated in one reportable segment Fiscal Year Our fiscal year is a 52-or 53-week year that ends on the Saturday nearest to January 31. As used herein, "Fiscal 2020" refers to the 52-week period that will end or January 30, 2021. "Fiscal 2019" refers to the 52-week period ended February 1, 2020. "Fiscal 2018" refers to the 52-week period ended February 2, 2019. "Fiscal 2017" refers to the 53-week period ended February 3, 2018. 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, Cash Equivalents, and Short-term Investments The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents Short-term investments classified as available-for-sale included certificates of deposit as of February 1, 2020, and they included certificates of deposit and commercial paper with a maturity of greater than three months, but less than one year as of February 2, 2019 Refer to Note 3 to the Consolidated Financial Statements for information regarding cash, cash equivalents, and short-term investments Merchandise Inventory Merchandise inventory is valued at the lower of average cost or net realizable value, utlizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses. The Company records merchandise receipts when control of the merchandise has transferred to the Company The Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Additionally, the Company estimates a markdown reserve for future planned permanent markdowns related to current inventory Mackdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at ts currently ticketed price. Such markdowns may have a material adverse impact on earnings, depending on the extent and amount of inventory affected The Company also estimates a shrinkage reserve for the period between the last physical count and the balance sheet date. The estimate for the shrinkage reserve, based on historical results, can be affected by changes in merchandise mix and shanam in actual hot n thousands except per share amounts) Weighted average common shares outstanding Basic number of common shares outstanding Dilutive effect of stock options and non-vested restricted stock Diluted number of common shares outstanding Potentially issuable common shares excluded due to anti-dilutive effect Dilutive and anti-diutive shares relate to share-based compensation. February 1, For the Years Ended February 2 2010 2000 February 3, 2018 169,711 176,476 177,938 1,156 170,867 1,559 178,035 2,218 180,156 700 393 3,082 Refer to Note 12 to the Consolidated Financial Statements for additional information regarding share-based compensation 6. Accounts Receivable, net Accounts receivable, net is comprised of the following: Pousands Franchise and license receivable Merchandise sell-offs and vendor receivables Credit card program receivable Tax refunds Landlord construction allowances Gift card receivable Other items Total 7. Property and Equipment, net Property and equipment, net consists of the following: February 1. 2029 30,000 $ 24,474 February 2 2019 31,474 12.943 30,578 21,129 4,868 7.483 12,038) 9,001 1,794 3.514 9.252 7,933 119,064 93.477 Un hosant Land Buildings Leasehold improvements t Fixtures and equipment Construction in progress Property and equipment, at cost Less Accumulated depreciation Property and equipment, net Depreciation expense is as follows Depreciation expense February 1, 2020 February 2 17.910 $ 211,814 721,514 1,316,100 2019 17.910 209,487 698,029 1,221,203 34,221 40,992 2.314,428 $ 2,180,850 (1.579.308) (1.430,701) 735.120 742.149 February 2020 176.038 5 For the Years Endel February 2 2019 164 205 Fairuary 3 2016 156 960 Additionally, during Fiscal 2019, Fiscal 2016, and Fiscal 2017, the Company recorded $4.3 million $20 million and $6 0 milion, respectively, red to asset write-offs within depreciation and amortization experise 8. Intangible Assets, net, including Goodwill Intangible assets net, including goodwill, consists of the following Fatmay February 2 2020 2019 Goodwill grass Goodwill, net Accumulated impairment ) 17.353 1 (4.106) 17.303 12.404) 13.15 14.800 Trademans at 71,605 70,004 Accumuled mortication 13383) (27320) Trademarks a 30.347 43.268 53004 54,167 pant des 12.5 onwarded in Faal 2015 and $1.7 on recorded in Fiscal 2019