American Eagle Outfitters 2011 Annual Report Download - page 52

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Table of Contents
AMERICAN EAGLE OUTFITTERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
3. Cash and Cash Equivalents, Short-term Investments and Long-term Investments
The following table summarizes the fair market value of our cash and marketable securities, which are recorded on the Consolidated Balance Sheets:
January 28,
2012
January 29,
2011
(In thousands)
Cash and cash equivalents:
Cash $ 548,728 $ 122,578
Money-market 131,785 397,440
Commercial Paper 29,998 40,884
Treasury bills 9,034 102,996
Corporate bonds — 3,695
Total cash and cash equivalents $ 719,545 $ 667,593
Short-term investments:
Treasury bills $ 19,999 $ —
State and local government ARS 5,500 3,700
Term-deposits — 63,402
Total short-term investments $ 25,499 $ 67,102
Long-term investments:
ARS Call Option $ 847 $ 415
State and local government ARS — 5,500
Total long-term investments $ 847 $ 5,915
Total $ 745,891 $ 740,610
Proceeds from the sale of available-for-sale securities were $240.8 million, $177.5 million and $80.4 million for Fiscal 2011, Fiscal 2010 and Fiscal
2009, respectively. The purchases of available-for-sale securities for Fiscal 2011 and Fiscal 2010 were $193.9 million and $62.8 million, respectively. There
were no purchases of available-for-sale securities during Fiscal 2009. At January 28, 2012 and January 29, 2011, the fair value of all available for sale
securities approximated par, with no gross unrealized holding gains or losses.
During Fiscal 2010, the Company liquidated ARS investments with $191.4 million of carrying value for proceeds of $177.5 million and a realized loss
of $24.4 million (of which $10.9 million had previously been included in OCI on the Company's Consolidated Balance Sheets). The ARS securities sold
during Fiscal 2010 included $119.7 million of par value ARS securities whereby the Company entered into a settlement agreement under which a financial
institution (the "purchaser") purchased the ARS at a discount to par, plus accrued interest. Additionally, under this agreement, the Company retained a right
(the "ARS Call Option"), for a period ending October 29, 2013 to: (a) repurchase any or all of the ARS securities sold at the agreed upon purchase prices
received from the purchaser plus accrued interest; and/or (b) receive additional proceeds from the purchaser upon certain redemptions of the ARS securities
sold. The ARS Call Option is cancelable by the purchaser for additional cash consideration.
The Company is required to assess the value of the ARS Call Option at the end of each reporting period, with any changes in fair value recorded within
the Consolidated Statement of Operations. Upon origination, the Company determined that the fair value was $0.4 million. The fair value of the ARS Call
Option was included as an offsetting amount within the net loss on liquidation of $24.4 million referenced above. As of January 28, 2012, the Company
determined that the fair value of the ARS Call Option, which is classified as a long-term investment, was $0.8 million.
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