American Eagle Outfitters 2014 Annual Report Download - page 31

Table of Contents
Our growth strategy includes fortifying our brands and further international expansion or acquisitions. We periodically consider and
evaluate these options to support future growth. In the event we do pursue such options, we could require additional equity or debt financing.
There can be no assurance that we would be successful in closing any potential transaction, or that any endeavor we undertake would increase
our profitability.
The following sets forth certain measures of our liquidity:
The $80.1 million decrease in our working capital and corresponding decrease in the current ratio as of January 31, 2015 compared to
February 1, 2014, related primarily to our use of cash for investing and financing activities, offset by net income, net of non-cash adjustments.
Investing and financing activities primarily include capital expenditures, sale of available-for-sale securities and the payment of dividends. In
Fiscal 2014, we paid $0.50 per share of dividends for a total of $97.2 million.
Cash Flows from Operating Activities of Continuing Operations
Net cash provided by operating activities totaled $338.4 million during Fiscal 2014, compared to $229.9 million during Fiscal 2013 and
$499.7 during Fiscal 2012. Our major source of cash from operations was merchandise sales and a reduction in our overall inventory balance.
Our primary outflows of cash from operations were for the payment of operational costs. The year-over-year increase in cash flows from
operations this year was primarily driven by the increase in income from continuing operations, net of non-cash adjustments. Merchandise
inventory at the end of Fiscal 2014 was $279.0 million, a decrease of 5% on a cost per square foot basis. The decrease reflects a mid single-
digit decrease in the number of units per square foot.
Cash Flows from Investing Activities of Continuing Operations
Investing activities for Fiscal 2014 included $245.0 million in capital expenditures for property and equipment, partially offset by $10.0
million of proceeds from the sale of investments classified as available-for-sale. Investing activities for Fiscal 2013 included $278.5 million in
capital expenditures for property and equipment, $20.8 million for the purchase of assets related to our international expansion strategy, $52.1
million of investment purchases, partially offset by $162.8 million of proceeds from the sale of investments classified as available-for-sale.
Investing activities for Fiscal 2012 included $93.9 million in capital expenditures for property and equipment and $111.1 million of investment
purchases partially offset by $15.5 million of proceeds from the sale of investments classified as available-for-sale. For further information on
capital expenditures, refer to the Capital Expenditures for Property and Equipment caption below.
Cash Flows from Financing Activities of Continuing Operations
During Fiscal 2014, cash used for financing activities resulted primarily from $97.2 million for the payment of dividends and $7.5 million
for the repurchase of common stock from employees for the payment of taxes in connection with the vesting of share-based payments. During
Fiscal 2013, cash used for financing activities resulted primarily from $72.3 million for the payment of dividends and $33.1 million for the
repurchase of 1.6 million shares as part of our publicly announced repurchase program. During Fiscal 2012, cash used for financing activities
resulted primarily from $403.5 million for the payment of dividends and $173.6 million for the repurchase of 8.4 million shares as part of our
publicly announced repurchase program.
Cash returned to shareholders through dividends and share repurchases was $97.2 million and $105.3 million in Fiscal 2014 and Fiscal
2013, respectively.
31
January 31,
2015
February 1,
2014
Working Capital (in 000’s)
$
431,420
$
512,513
Current Ratio
1.94
2.23