American Eagle Outfitters 2004 Annual Report Download - page 32

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18
Part II
market under this stock repurchase program. As of January 29, 2005, approximately 1,400,000 shares remain
authorized for repurchase. Additionally, during Fiscal 2003 and Fiscal 2002, the Company purchased 16,000 shares
and 116,000 shares, respectively, from certain employees at market prices totaling $0.1 million and $1.6 million,
respectively, for the payment of taxes in connection with the vesting of restricted stock as permitted under the 1999
Stock Incentive Plan. These repurchases have been recorded as treasury stock.
During the third quarter of Fiscal 2004, our Board of Directors authorized the Company's first-ever quarterly cash
dividend of three cents per share, which was paid on October 8, 2004. A second quarterly dividend of three cents per
share was paid on January 7, 2005. During the first quarter of Fiscal 2005, the Board voted to raise the Company’s
cash dividend to an annual rate of twenty cents per share. A quarterly dividend of five cents per share was paid on
April 8, 2005. The payment of future dividends is at the discretion of our Board and is based on future earnings, cash
flow, financial condition, capital requirements, changes in U.S. taxation and other relevant factors. It is anticipated
that any future dividends paid will be declared on a quarterly basis.
We expect capital expenditures for Fiscal 2005 to be approximately $100 million, which will relate primarily to
approximately 35 to 40 new American Eagle stores in the United States and Canada, and the remodeling of
approximately 60 American Eagle stores in the United States. Remaining capital expenditures will relate to new
fixtures and enhancements to existing stores, information technology upgrades, distribution center improvements and
the construction of a new data center. We plan to fund these capital expenditures through existing cash and cash
generated from operations.
Our growth strategy includes the possibility of acquisitions and/or internally developing new brands. We periodically
consider and evaluate these options to support future growth. In the event we do pursue such options, we could
require additional equity or debt financing. There can be no assurance that we would be successful in closing any
potential transaction, or that any endeavor we undertake would increase our profitability.
Obligations and Commitments
Disclosure about Contractual Obligations
The following table summarizes significant contractual obligations of the Company as of January 29, 2005:
Payments Due by Period
(In thousands)
Total
Less than
1 year
2-3
years
4-5
years
After
5 years
Operating Leases $982,420 $135,410 $268,760 $250,354 $327,896
Purchase Obligations 88,970 85,004 3,579 387 -
Total Contractual Obligations $1,071,390 $220,414 $272,339 $250,741 $327,896
In addition to the above purchase obligations, the Company has outstanding letters of credit attributed to inventory
purchases, as stated in the table on page 19.