American Eagle Outfitters 2006 Annual Report Download - page 30

Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of
American Eagle Outfitters, Inc.
We have audited the accompanying consolidated balance sheetsofAmerican Eagle Outfitters, Inc. (the
Company) as of February 3, 2007 and January 28, 2006, and therelated consolidated statements of operations,
comprehensive income, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended
February 3, 2007. These financial statements are the responsibility of the Company’s management.Our
responsibility is to express an opinion on these financial statements based on our audits.
We conductedouraudits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are freeofmaterial misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management,as well as evaluating the overall
financial statement presentation. We believe that our audits provide areasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in allmaterial respects, the consolidated
financial position of American EagleOutfitters, Inc. at February 3, 2007 and January 28, 2006, and the
consolidated results of their operations and their cash flows for each of the threefiscal years in the period ended
February 3, 2007, in conformitywith U.S. generally accepted accounting principles.
As discussed in Note 3 to the consolidated financial statements, the Company adopted Statement of Financial
Accounting Standards No. 123(R), “Share-Based Payment,” effective January 29, 2006.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of the Company’s internal control over financial reporting as of February 3,
2007, based on criteria established in Internal Control-Integrated Framework issued by the Committeeof
Sponsoring Organizations of the Treadway Commission and our report dated April 2, 2007 expressed an
unqualified opinion thereon.
/s/ Ernst &Young LLP
Pittsburgh,Pennsylvania
April 2, 2007
PAGE 30 ANNUAL REPORT 2006
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per shareamounts)
February 3,
2007
January 28,
2006
Assets
Current assets:
Cash and cash equivalents $59,737 $130,529
Short-term investments 767,376 620,989
Merchandise inventory 263,644 210,739
Accounts and note receivable 26,045 29,146
Prepaid expenses and other 33,720 30,110
Deferred income taxes 47,732 43,085
Assets held-for-sale -12,183
Total current assets 1,198,254 1,076,781
Property and equipment, at cost, net of accumulated depreciation andamortization 481,645 345,518
Goodwill 9,950 9,950
Long-term investments 251,644 145,774
Other assets, net 45,991 27,626
Total assets $1,987,484 $1,605,649
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $171,150 $ 139,197
Accrued compensation and payroll taxes 58,371 48,050
Accrued rent 57,543 52,506
Accrued income and other taxes 87,780 43,273
Unredeemed stored value cards and gift certificates 54,554 43,045
Current portion of deferred lease credits 12,803 10,406
Other liabilities and accrued expenses 18,263 15,010
Total current liabilities 460,464 351,487
Non-current liabilities:
Deferred lease credits 65,114 60,087
Other non-current liabilities 44,594 38,523
Total non-current liabilities 109,708 98,610
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; 250,000 shares authorized; 248,155 and 243,571
shares issued; 221,284 and 221,897 shares outstanding, respectively 2,461 2,416
Contributed capital 453,418 369,807
Accumulated other comprehensive income 21,714 22,028
Retained earnings 1,302,345 978,855
Deferred compensation -(1,041)
Treasury stock, 25,699 and 20,534 shares, respectively (362,626) (216,513)
Total stockholders’ equity1,417,312 1,155,552
Total liabilities andstockholders’ equity$1,987,484 $1,605,649
See Notes to Consolidated Financial Statements
AMERICAN EAGLE OUTFITTERS PAGE 31