American Eagle Outfitters 2009 Annual Report Download - page 70

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strategic alternatives, which revealed that it was not achieving performance levels that warranted further
investment.
As a result of this decision, the Company plans to close all 28 stores and cease all online and corporate
operations of M+O in Fiscal 2010. The timing of the store closures is dependent on a number of factors that include
negotiating third-party agreements, adherence to notification requirements and local laws.
In conjunction with the closing of M+O, the Company expects the Fiscal 2010 cash outflow, net of associated
tax benefits, to be approximately $10 million to $40 million. This is comprised of estimated pre-tax charges of
approximately $32 million to $77 million, which includes lease-related items of approximately $18 million to
$63 million, severance of approximately $10 million and other charges of approximately $4 million. Additionally,
the Company estimates approximately $29 million of non-cash, pre-tax impairment charges and inventory write
downs. These charges are expected to be recognized primarily over the first half of Fiscal 2010.
The above estimates are preliminary and based on a number of significant assumptions and could change
materially.
Refer to Note 2 to the Consolidated Financial Statements for additional information regarding M+O store
impairments previously recorded.
The Company has evaluated the existence of subsequent events through the filing date of this Annual Report on
Form 10-K.
69
AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)