American Eagle Outfitters 2006 Annual Report Download - page 40

Restricted Stock Grants
Under the 2005 Plan, the fair value of restricted stockawards is based on the closing market price of the
Company’s common stock on the date of grant. Asummary of the activity of the Company’s restricted stock is
presented in the following tables.
For the Year Ended
February 3, 2007
Time-Based Restricted Stock Shares
Weighted-
Average Grant
Date Fair Value
Nonvested -January 29, 2006 (1) 90,000 $9.63
Granted 93,000 $20.02
Vested (45,000) $9.63
Cancelled - -
Nonvested -February 3, 2007 138,000 $16.63
(1) Nonvested time-based restricted stock at January 29, 2006 is related to an award that was issued under the
1999 Plan. Under this plan, time-based awardswere valuedusing the average of the high and lowmarket
price of the Company’s common stock on the date of grant.
For the Year Ended
February 3, 2007
Performance-Based Restricted Stock Shares
Weighted-
Average Grant
Date Fair Value
Nonvested -January 29, 2006 (1) 1,050,036 $17.36
Granted 1,089,429 $17.88
Vested (1,050,036) $17.36
Cancelled (55,354) $16.98
Nonvested -February 3, 2007 1,034,075$17.93
(1) Nonvested performance-based restricted stock at January 29, 2006 includes awards issued under the 1999
Plan andthe2005 Plan. Under the 1999 Plan, awards were valued using the average of the high and low
market price of the Company’s common stock at the end of the performance period. Under the 2005 Plan,
awards were valued using the closing price of the Company's common stock at the end of the performance
period.
As of February 3, 2007, there was $3.1 million of unrecognized compensation expense related to nonvested
restricted stockawards that is expected to be recognized over aweighted average period of 10 months. The total
fair value of restricted stock awards vested during Fiscal 2006 and Fiscal 2005 was $18.9 million and$25.9
million, respectively. No restricted stock awards vested during Fiscal 2004.
PAGE 50 ANNUAL REPORT 2006
4. Accounts and Note Receivable
Accounts and note receivable are comprisedofthe following:
(In thousands)
February 3,
2007
January 28,
2006
Construction allowances $ 9,345 $ 8,212
Merchandise sell-offs 2,488 6,904
Taxes 1,012 1,860
Distribution services -1,618
Interest income 7,251 2,982
Property insurance claims 2,530 4,081
Other 3,419 3,489
Total $26,045 $29,146
5. Property and Equipment
Property and equipment consistsofthe following:
(In thousands)
February 3,
2007
January 28,
2006
Land $ 6,869 $ 4,284
Buildings 34,093 30,682
Leasehold improvements 434,881 391,820
Fixtures and equipment 289,828 239,139
Construction in progress 92,019 1,098
$857,690 $ 667,023
Less: Accumulated depreciation andamortization (376,045) (321,505)
Net propertyandequipment $481,645 $345,518
Amounts as of January 28, 2006 reflect certainassets of NLSas held-for-sale. As of February 3, 2007, there were
no remaining assets related to NLS. See Note 9 of the Consolidated Financial Statements for additional
information regarding assets held-for-sale.
Depreciation expense is summarized as follows:
For the Years Ended
(In thousands)
February 3,
2007
January 28,
2006
January 29,
2005
Depreciation expense $87,869 $77,372 $67,495
6. NotePayableand Other Credit Arrangements
Pennsylvania Industrial Development Authority Loan
During Fiscal 2006, the Company entered into an agreement withthePennsylvania Industrial Development
Authority (“PIDA”) to borrow approximately $2.2 million with afixed interest rate of 3.25% and amaturity date
of October 1, 2021. The proceeds from the PIDA loan were restricted for construction costs related to the
Company’s new home office building in Pittsburgh,Pennsylvania. During the three months ended October 28,
2006, the Company received approximately $2.0 million of the proceeds. During the fourth quarter,prior to the
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