American Eagle Outfitters 2008 Annual Report Download - page 32

Credit Facilities
We have borrowing agreements with two separate financial institutions under which we may borrow an
aggregate of $350.0 million. Of this amount, $150.0 million can be used for demand letter of credit facilities and
$100.0 million can be used for demand line borrowings. The remaining $100.0 million can be used for either letters
of credit or demand line borrowings at our discretion. As of January 31, 2009, we had outstanding demand letters of
credit of $57.3 million and demand line borrowings of $75.0 million. The outstanding amounts on these facilities
can be demanded for repayment by the financial institutions at any time. Additionally, the availability of any
remaining borrowings is subject to acceptance by the respective financial institution. The average borrowing rate on
the demand lines for Fiscal 2008 was 2.9% and we have incorporated the demand line proceeds into working capital.
The demand line facilities comprising the $100.0 million borrowing capacity expire on April 22, 2009. We are
currently working with our lenders to renew these facilities or to obtain committed credit lines of a comparable
amount. If we are unable to renew both of our demand line facilities, we would be required to repay immediately the
$75 million that we have drawn on those facilities. We believe that this would have no material impact on our ability
to fund operations.
Capital Expenditures
Fiscal 2008 expenditures included $135.2 million related to investments in our AE stores, including 122 new
AE, aerie, and M+O stores in the United States and Canada, 30 remodeled stores in the United States and fixtures
and visual investments. Additionally, we continued to support our infrastructure growth by investing in information
technology including the roll-out of our new point-of-sale system ($43.6 million), the expansion and improvement
of our distribution centers ($52.8 million), construction of our corporate headquarters in Pittsburgh, Pennsylvania
($16.1 million) and other home office projects ($17.6 million).
For Fiscal 2009, we significantly lowered our capital spending plans driven by our decision to open fewer new
stores. Therefore, we expect capital expenditures to be in the range of $110 million to $135 million with
approximately half of the amount relating to store growth and renovation. This includes approximately 11 new
and 25 to 35 remodeled AE stores, including our new flagship store in the Times Square area of New York,
New York, and 17 new aerie stores. The remaining half relates to the completion of our headquarters, information
technology and distribution center projects. At this time, our 2009 capital expenditures projection does not include
new M+O stores.
Stock Repurchases
During Fiscal 2007, our Board authorized a total of 60.0 million shares of our common stock for repurchase
under our share repurchase program with expiration dates extending into Fiscal 2010. During Fiscal 2007, we
repurchased 18.7 million shares as part of our publicly announced repurchase programs for approximately
$438.3 million, at a weighted average price of $23.38 per share. We did not repurchase any common stock as
part of our publicly announced repurchase program during Fiscal 2008. As of March 25, 2009, we had 41.3 million
shares remaining authorized for repurchase. These shares will be repurchased at our discretion. Of the 41.3 million
shares that may yet be purchased under the program, the authorization relating to 11.3 million shares expires at the
end of Fiscal 2009 and the authorization relating to 30.0 million shares expires at the end of Fiscal 2010.
During Fiscal 2008 and Fiscal 2007, we repurchased 0.2 million and 0.4 million shares, respectively, from
certain employees at market prices totaling $3.4 million and $12.3 million, respectively. These shares were
repurchased for the payment of taxes in connection with the vesting of share-based payments, as permitted under the
2005 Stock Award and Incentive Plan.
The aforementioned share repurchases have been recorded as treasury stock.
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