American Eagle Outfitters 2008 Annual Report Download - page 54

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Proceeds from the sale of available-for-sale securities were $393.6 million, $2.127 billion and $916.0 million
for Fiscal 2008, Fiscal 2007 and Fiscal 2006, respectively. These proceeds are offset against purchases of
$48.7 million, $1.773 billion and $1.353 billion for Fiscal 2008, Fiscal 2007 and Fiscal 2006, respectively. In
addition to the OTTI charge discussed below for Fiscal 2008, the Company recorded net realized losses related to
the sale of available-for-sale securities of $1.1 million, $0.4 million and $0.6 million for Fiscal 2008, Fiscal 2007
and Fiscal 2006, respectively, in other income, net.
During Fiscal 2006, the Company transferred certain investment securities from available-for-sale classifi-
cation to trading classification (the “trading securities”). As a result of this transfer, during Fiscal 2006 a
reclassification adjustment of $(0.3) million was recorded in other comprehensive income related to the gain
realized in net income at the time of transfer. As a result of trading classification, the Company realized $3.5 million
of capital gains, which were recorded in other income, net during Fiscal 2006. The trading securities were sold
during Fiscal 2006, at which time the Company received proceeds of $184.0 million. As of January 31, 2009, the
Company had no investments classified as trading securities.
The following tables present the length of time available-for-sale securities were in continuous unrealized loss
positions but were not deemed to be other-than-temporarily impaired:
Gross Unrealized
Holding Losses Fair Value
Gross Unrealized
Holding Losses Fair Value
Less than
12 Months
Greater than
or Equal
to 12 Months
(In thousands)
January 31, 2009
Student-loan backed ARS ................. $(31,446) $169,254 $— $—
State and local government ARS ........... (630) 69,970 — —
Auction rate preferred securities ............ (3,217) 11,783 — —
Total .................................. $(35,293) $251,007 $— $—
February 2, 2008
Auction rate preferred securities (“ARPS”) .... $ (75) $ 19,136 $— $—
Treasury and agency securities ............. (61) 18,377 — —
Total .................................. $ (136) $ 37,513 $— $—
As of January 31, 2009, we had a total of $734.9 million in cash and cash equivalents, short-term and long-term
investments, which included $255.3 million of investments in ARS and $6.2 million of preferred securities, net of
$35.3 million ($21.8 million net of tax) of temporary impairment and $22.9 million in OTTI. Our short-term and
long-term investments consist of the following:
No. of
Issues Par Value
Temporary
Impairment OTTI
Carrying Value as
of January 31, 2009
(In thousands, except no. of issues amount)
Auction-rate securities (“ARS”):
Closed-end municipal fund ARS . . . 5 $ 41,750 $ (263) $ — $ 41,487
Municipal Bond ARS ........... 5 28,850 (367) — 28,483
Auction rate preferred securities. . . . 5 29,400 (3,217) (10,108) 16,075
Federally-insured student loan
ARS ...................... 17 166,700 (17,283) — 149,417
Private-insured student loan ARS . . . 4 34,000 (14,163) — 19,837
Total Auction-rate securities ........ 36 300,700 (35,293) (10,108) 255,299
Preferred Stock .................. 4 19,000 — (12,781) 6,219
Total .......................... 40 $319,700 $(35,293) $(22,889) $261,518
52
AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)