<HTML> <HEAD> <TITLE>FORM 10-K 405</TITLE> </HEAD> <BODY BGCOLOR="#FFFFFF"> <P> <FONT SIZE="2"></FONT></P> <DIV ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B><FONT SIZE="3">UNITED STATES</FONT></B></FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>SECURITIES AND EXCHANGE COMMISSION</B></FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>Washington, D.C. 20549-0001</B></FONT></DIV> <DIV><FONT SIZE="2"> </FONT></DIV> <DIV ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B><FONT SIZE="5">FORM 10-K</FONT></B></FONT></DIV> <DIV><FONT SIZE="3"> </FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="Wingdings"><B>x</B></FONT><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B> ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE</B></FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>SECURITIES EXCHANGE ACT OF 1934</B></FONT></DIV> <DIV><FONT SIZE="3"> </FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>For the Fiscal Year Ended January 29, 2000</B></FONT></DIV> <DIV><FONT SIZE="3"> </FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>OR</B></FONT></DIV> <DIV><FONT SIZE="3"> </FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="Wingdings"><B>¨</B></FONT><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B> TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE</B></FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>SECURITIES EXCHANGE ACT OF 1934</B></FONT></DIV> <DIV><FONT SIZE="3"> </FONT></DIV> <DIV ALIGN="center"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>Commission File Number: 0-23760</B></FONT></DIV> <DIV><FONT SIZE="3"> </FONT></DIV> <DIV ALIGN="center"><FONT SIZE="5" COLOR="#000000" FACE="'Times New Roman', Times"><B><FONT SIZE="6">American Eagle Outfitters, Inc. <BR> </FONT></B></FONT><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>(Exact name of registrant as specified in its charter)</B></FONT></DIV> <DIV><FONT SIZE="2"> </FONT></DIV> <TABLE ALIGN="center" WIDTH="670" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="324"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Delaware</B></FONT></TH> <TH WIDTH="10"><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="340"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>No. 13-2721761</B></FONT></TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="324" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(State or other jurisdiction of incorporation or organization)</FONT></TD> <TD WIDTH="10"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="340"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(I.R.S. Employer Identification No.)</FONT></TD> </TR> </TABLE> <DIV><FONT SIZE="2"> </FONT></DIV> <TABLE ALIGN="center" WIDTH="670" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>150 Thorn Hill Drive, Warrendale, PA</B></FONT></TH> <TH><FONT SIZE="1"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B><FONT SIZE="2">15086-7528</FONT></B></FONT></TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="307" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(Address of principal executive offices)</FONT></TD> <TD><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(Zip Code)</FONT></TD> </TR> </TABLE> <DIV><FONT SIZE="2"> </FONT></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Registrant's telephone number, including area code: (724) 776-4857</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Securities registered pursuant to Section 12(b) of the Act: None</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Securities registered pursuant to Section 12(g) of the Act: Common Shares, without par value</FONT></DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="44%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" VALIGN="top" WIDTH="56%"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> (Title of class)</FONT></DIV> </TD> </TR> </TABLE> <DIV><FONT SIZE="1"> </FONT></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to the filing requirements for at least the past 90 days. YES </FONT><FONT SIZE="3" COLOR="#000000" FACE="Wingdings"><B>x</B></FONT><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B> </B></FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times"> NO <U> </U> </FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. </FONT><FONT COLOR="#000000" FACE="Wingdings">x</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Aggregate market value of voting stock held by non-affiliates of the registrant, 21,391,503 Common Shares, based on the $37.94 closing sale price on April 1, 2000 was $811,540,145.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 47,010,494 Common Shares were outstanding at April 1, 2000.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>DOCUMENTS INCORPORATED BY REFERENCE</B></FONT> </DIV> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Part III—Proxy Statement for 2000 Annual Meeting of Stockholders, in part, as indicated.</FONT></DIV> <P></P> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times"> <B>PART I <BR> </B></FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 1. BUSINESS.</B></FONT></P> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Overview</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We are a specialty retailer of all-American casual apparel, accessories, and footwear for men and women between the ages of 16 and 34. We source, design, and market a versatile line of timeless and relaxed clothing classics like jeans, khakis, and T-shirts under our American Eagle Outfitters® and AE® brand names for exclusive sale in our American Eagle Outfitters stores. As of January 29, 2000, we operated 466 stores in 45 states and the District of Columbia.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We opened our first American Eagle Outfitters store in 1977. We are currently one of the largest retailers targeting the highly favorable teenage demographic. We appeal to our growing consumer base by selling attractively priced fashionable items that reflect our lifestyle-based retail branding strategy. Our lifestyle brand concept is incorporated in every aspect of our retail operations. Our designers interpret fashion trends and develop merchandise that has fresh, collegiate appeal for our target customer. Our store layout and design are uniform and convey a natural and youthful brand image. We utilize strong visual representations of active youth in our in-store print advertising. Other marketing, advertising and promotional programs further reinforce our classic American Eagle brand image. We believe the combination of these efforts has created a strong brand identity for American Eagle Outfitters ®.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Organization and History</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Until January 2, 1994, our business was operated by Retail Ventures, Inc. and Natco Industries, Inc., two corporations owned principally by members of the Jerome Schottenstein family. Effective on that date, we obtained all of the operating assets and liabilities of the American Eagle Outfitters® operations in exchange for the issuance of shares of our common stock. We lease our office and distribution center from a partnership owned by the Schottenstein Family and Schottenstein Stores Corporation. Shottenstein Stores Corporation also continues to provide us with certain corporate services. See Note 3 of Notes to Consolidated Financial Statements. On November 2, 1998, we changed our state of incorporation from Ohio to Delaware. Effective on April 7, 1999, we completed a plan of reorganization to achieve certain corporate objectives and to implement a holding company structure. As part of this reorganization, we changed our name from Natco Industries, Inc. to American Eagle Outfitters, Inc. and our predecessor, formerly known as American Eagle Outfitters, Inc. changed its' name to AE Stores Company and became our wholly owned operating subsidiary. The transaction did not have a significant impact on our financial statements.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In Fiscal 1999, we formed Eagle Trading Company, a Mexican distribution subsidiary with operations near Mexico City, Mexico.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Effective January 31, 2000, we acquired importing operations from Schottenstein Stores Corporation. The purpose of the acquisition is to integrate the expertise of the importing operation into our supply chain process.</FONT></DIV> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our financial year is a 52/53 week year that ends on the Saturday nearest to January 31. For tax purposes, we report on a July year-end. As used herein, "Fiscal 1999", "Fiscal 1998", "Fiscal 1997" and "Fiscal 1996" refer to the respective 52-week periods ended January 29, 2000, January 30, 1999, January 31, 1998 and February 1, 1997. "Transition 1996" refers to the twenty-seven week period from July 30, 1995 to February 3, 1996. "Fiscal 2000" refers to the 53-week period ending January 27, 2001.</FONT> </P> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our principal offices are located at 150 Thorn Hill Drive, Warrendale, Pennsylvania 15086-7528 and our telephone number is (724) 776-4857.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Brand and Merchandising Strategies</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Over the past several years, we have focused on several core brand and merchandising strategies to differentiate ourselves from our competition, improve our profitability and increase sales. These strategies include:</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Build the American Eagle Outfitters Brand.</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Several years ago, we sharpened the definition of our target customer. Since then we have been focused on our AE brand strategy to provide overall value through the entire shopping experience—marketing, service, merchandise quality, price, fashion, and shopping environment. We created a focused brand image based on a youthful active lifestyle, classic American styles and affordability. Our brand image is communicated through all aspects of our operations, from merchandising to marketing to our store environment.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In Fiscal 1998, we began selling merchandise on our internet site, <I>ae.com</I>, and launched our catalog, <I>AE Magazine</I>. In Fiscal 1999, we experienced increased customer traffic on our internet site, and increased the number and circulation of our catalogs. Increased marketing initiatives further strengthen our brand image. In 1999, we announced several internet partnerships, which link our website to websites of other companies, such as <I>barnesandnoble.com, ESPN, reel.com, </I>and <I>CDNow</I>. We believe these partnerships will add customer traffic and provide complimentary services for our internet customers. Magazine advertising is also an important part of our brand building strategy. We advertise in magazines such as <I>Mademoiselle, Seventeen, Spin, Teen People</I>, <I>In Style</I> and <I>ESPN</I>, whose readers match a segment of the demographic profile of our target customer range.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In order to continue to build brand recognition, we have allocated more resources to marketing. In Fiscal 1999, we spent $27.2 million, or 3.3% of sales, on advertising and marketing which was an increase of almost 66% from $16.4 million, or 2.8% of sales in the prior year.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Merchandising Strategies</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">An integral part of our strategy is to offer merchandise that reinforces our brand image and serves our target customer through items which are fashion-right and value-priced to drive added sales. We strive to intelligently source merchandise production in order to maximize merchandise margins.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We provide great quality apparel, footwear, and accessories at affordable prices. We believe our prices are competitive with or lower than those of comparable mall-based retailers. We have established relationships with key manufacturers through our own sourcing company to ensure the quality of our goods. Our sourcing and merchandise strategies allow us to execute our affordable pricing strategy while maintaining high quality standards.</FONT></DIV> <DIV></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Growth Strategies</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our growth strategies are focused on developing and expanding the visibility and availability of a strong brand throughout the United States. The principal elements of our growth strategies include:</FONT></DIV> <P></P> <DIV ALIGN="left"> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Geographical Growth</I></FONT></P> </DIV> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our primary store expansion strategy is to continue our geographic expansion throughout the United States and to fill-in existing markets. We currently operate in 45 states, with the highest concentration of locations in Ohio, Pennsylvania, New York, Michigan, Illinois, and Virginia. We opened 80 stores in Fiscal 1999, increasing our store base by nearly 22% and our selling square footage by over 27%. Of our 80 new stores we opened in Fiscal 1999, 27 stores, or approximately 34%, are in new markets in the Northwest and Southwest.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The table below shows certain information relating to our historic store growth:</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" CELLSPACING=0 CELLPADDING=0 WIDTH="690"> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1997</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1996</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Transition <BR> 1996</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"> </TH> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Stores at beginning of period</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">386</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">332</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">303</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">272</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">266</FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Stores opened during the period</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">80</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">56</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">36</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">38</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">11</FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Stores closed during the period</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(2</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(7</FONT></TD> <TD> )</TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(7</FONT></TD> <TD>)</TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(5</FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></DIV> </TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Total Stores at End of Period</B></FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">466</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">386</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">332</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">303</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">272</FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Continue to Invest in Our Distribution Facility</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">To support our store expansion strategy, we increased our distribution capacity. Over the past two years, we have invested approximately $9.5 million to upgrade and expand our distribution center and headquarters facility by 120,000 square feet. This investment has lowered our unit payroll costs by 8% in Fiscal 1998 and by an additional 12% in Fiscal 1999.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Mall Types</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The American Eagle brand offers customers fashionable merchandise at value-oriented prices, appealing to a broad income demographic. Therefore, we can operate profitably in a variety of mall types. While substantially all stores to be opened in Fiscal 2000 will be in regional shopping malls, we believe that selected street locations in high traffic urban settings and university towns, as well as airports and strip centers, provide attractive expansion opportunities.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Flagship Stores</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In 1999, we opened two "flagship" stores, which are larger stores where we offer our customers a broader merchandise selection and more exciting store environment. In July 1999, our first flagship store in San Francisco opened. The store is 8,400 gross square feet, representing our largest store. In December 1999, we opened our second flagship store in the Georgetown area of Washington, D.C. This store is approximately 8,000 gross square feet.</FONT></DIV> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Direct to Consumer Opportunities</I></FONT></P> <DIV ALIGN="left"></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In Fiscal 1998, we began selling merchandise through our internet site, <I>ae.com</I>, and launched our catalog, <I>AE Magazine</I>, to further promote sales through alternative distribution channels. Our internet site is an extension of the AE lifestyle that we convey in our stores and our catalog. We offer approximately 80% of our apparel through <I>ae.com</I> and we also provide movie clips, horoscopes, and book selections, all carefully selected and edited for our target customer. Since inception, we have experienced an increase in traffic on our internet site. We also increased our circulation for our catalogs to a total of 4.0 million in Fiscal 1999 from 0.9 million in Fiscal 1998. Fiscal 1999 also included an additional holiday catalog.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Remodel Opportunities</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We believe significant opportunities exist to improve our sales productivity because we are in the early stages of the development of our brand. Our brand provides opportunities for expansion of existing product categories into additional markets, as well as expansion into complimentary product lines. For example, women's apparel has increased as a percentage of total sales from 24% in Fiscal 1995 to 53% in Fiscal 1999. Additionally, in Fiscal 1999, we introduced personal care products in 75 of our stores, including a unisex fragrance, <I>Alive</I>.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In order to maintain a balanced presentation in each merchandise category and to accommodate additional product categories, we are seeking larger new store locations and increasing selling square footage in store remodels. Our new stores planned for Fiscal 2000 will average over 5,500 square feet compared to 4,800 for Fiscal 1999 openings. We remodeled 25 stores in Fiscal 1999, and we tested a new store design in five locations. We believe this new format will improve the overall shopping experience for our customers by providing innovative design features and incorporating the latest store technologies.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Merchandise Categories</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We design and sell virtually all of our merchandise under our own brands. Our merchandising strategy focuses on providing a carefully selected, in-season, merchandise assortment within our principal merchandise groups: mens and womens apparel, footwear and accessories. Merchandise is regularly updated with new styles, colors and fabrics. We offer quality fashionable interpretations of fundamental wardrobe items such as jeans, sweaters, khakis, T-shirts, woven shirts, and fleece.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times">The following table shows the approximate percentage of net sales attributable to each merchandise group:</FONT></P> <FONT SIZE="1"> </FONT></DIV> <TABLE ALIGN="center" CELLSPACING=0 CELLPADDING=0 WIDTH="690"> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1997</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1996</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Transition <BR> 1996</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Men's apparel</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">39</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">40</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">41</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">36</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">52</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Women's apparel</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">53</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">52</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">50</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">47</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">20</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Footwear and accessories —men's and women's</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">8</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">8</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">9</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">17</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">18</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> </TR> <TR> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> </TR> </TABLE> <P> </P> <DIV ALIGN="left"> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Store Operations</B></FONT></P> </DIV> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our store operations are managed by an Executive Vice President and Director of Store Operations, seven regional managers and fifty-two district managers, each of whom supervises an average of nine stores. A typical store has a store manager, two assistant store managers, four full-time and six to twelve part-time sales associates, depending on the season. The hiring and training of new employees is the responsibility of the store manager and district manager, and we have established training and operations procedures to assist them.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our continued success is dependent in part on our ability to attract, retain, and motivate qualified employees. Our attractive incentive compensation program and creative training program are vital to this success. Sales associates are trained to provide superior customer service in order to maximize sales, and to ensure that store merchandising plans are executed properly and to minimize inventory shrinkage. We utilize <I>AE Digital University</I>, a state-of-the-art in-store training curriculum to provide on-site training and skills development to sales associates and managers.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">During Fiscal 1998, we implemented staff scheduling software to improve productivity and customer service by better aligning store staffing with expected customer traffic. In Fiscal 1999, this software, along with other technical and planning process improvements, has contributed to improving the productivity of store payroll expense.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">To ensure that we maximize our investment when we expand into new markets, we have a dedicated "new store opening" team. This team combines the expertise of experienced store managers and marketing and visual professionals so that we open new stores to achieve maximum productivity.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Regional, district, and store managers receive performance bonuses based on sales, payroll, and shrinkage goals for their stores. Sales associates and assistant managers are eligible for a number of incentives, including cash awards and prizes for achieving certain sales goals. In Fiscal 1997, we introduced <I>AE Rewards</I>, an incentive program that enables hourly sales associates to earn points for achieving sales goals. These points can be redeemed for a variety of prizes that they can select from an awards catalog.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Store Environment</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We consider our stores and in-store marketing as principal elements that signify and convey the image of our brand. Our store design, furniture, fixtures and music are carefully coordinated to create a store environment that is consistent with the casual, fashionable image of the brand. To promote consistency and name recognition, our stores are designed to be substantially identical, with a warm and casual ambiance created by the use of worn hardwood floors, light colored wooden fixtures and off white walls. Large in-store photographs depict young people enjoying an active, casual lifestyle with friends and family and reflect our casual, "live your life" attitude. We believe that our store ambiance is welcoming and comfortable and promotes a pleasant shopping experience. We believe that our current store design in the majority of our stores is effective, meeting the needs of our target customer. However, we understand that we must evolve and react quickly to the rapidly changing retail environment. Accordingly, in Fiscal 1999, we developed a new AE store design, which was reflected in five stores opened in 1999. The new format enhances the casual atmosphere of our store by providing comfortable seating areas, stools in the checkout area, enhanced music systems and video screens to invite the customer to relax and enjoy their shopping experience. We feel that this enhanced format will improve the overall shopping experience of our customers. Beginning in Fiscal 2000, all new stores will reflect this re-design format.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We regularly refurbish and renovate our stores to provide better customer service and upgrade to our newest store design, particularly in connection with lease renewals. In Fiscal 1999, we renovated 25 older stores at a total cost of $9.4 million. Also, we spent $1.4 million in fixture and leasehold retrofits to existing stores.</FONT></DIV> <P> </P> <P><FONT SIZE="2"></FONT></P> <P><B><FONT FACE="Times New Roman">Store Locations</FONT></B></P> <P><FONT FACE="Times New Roman">Our stores average approximately 4,400 gross square feet and approximately 3,500 on a selling square foot basis. At January 29, 2000, we operated 466 stores in 45 states and the District of Columbia shown below:</FONT></P> <P> <TABLE WIDTH="690" CELLPADDING="0" CELLSPACING="0" BORDER="0"> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Alabama</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Indiana</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Missouri</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Oregon</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">11 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">14 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">12 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Arkansas</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Iowa</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Nebraska</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Pennsylvania</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">12 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">4 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">36 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">California</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Kansas</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Nevada</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Rhode Island</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">5 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">1 store</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Colorado</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Kentucky</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">New Hampshire</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">South Carolina</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">5 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">6 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">4 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">8 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Connecticut</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Louisiana</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">New Jersey</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">South Dakota</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">9 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">8 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">16 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">2 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Delaware</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Maine</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">New Mexico</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Tennessee</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">1 store</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">1 store</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">2 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">14 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">District of Columbia</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Maryland</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">New York</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Texas</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">1 store</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">12 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">28 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">21 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Florida</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Massachusetts</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">North Carolina</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Utah</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">20 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">16 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">18 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">5 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Georgia</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Michigan</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">North Dakota</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Vermont</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">16 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">22 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">2 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Idaho</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Minnesota</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Ohio</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Virginia</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">1 store</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">10 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">28 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">21 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Illinois</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Mississippi</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Oklahoma</FONT></U></B></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Washington</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">22 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">5 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="178"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">5 stores</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">10 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"><B>  </B></TD> <TD VALIGN="TOP" WIDTH="176"><B>  </B></TD> <TD VALIGN="TOP" WIDTH="178"><B>  </B></TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">West Virginia</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175">  </TD> <TD VALIGN="TOP" WIDTH="176">  </TD> <TD VALIGN="TOP" WIDTH="178">  </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">7 stores</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"><B>  </B></TD> <TD VALIGN="TOP" WIDTH="176"><B>  </B></TD> <TD VALIGN="TOP" WIDTH="178"><B>  </B></TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><B><U><FONT FACE="Times New Roman">Wisconsin</FONT></U></B></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> <TD VALIGN="TOP" WIDTH="178"> </TD> <TD VALIGN="TOP" WIDTH="176"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="175">  </TD> <TD VALIGN="TOP" WIDTH="176">  </TD> <TD VALIGN="TOP" WIDTH="178">  </TD> <TD VALIGN="TOP" WIDTH="176"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">10 stores</FONT></P> </TD> </TR> </TABLE> <P><B></B></P> <P><B><FONT FACE="Times New Roman">Purchasing</FONT></B></P> <P><FONT FACE="Times New Roman">We purchase merchandise from approximately 110 North American and foreign suppliers who either manufacture their own merchandise or supply merchandise manufactured by others, or both. During Fiscal 1999, approximately 21% of our merchandise was purchased from North American suppliers and the remaining 79% from foreign suppliers. Since we rely on a small number of overseas sources for a significant portion of our purchases, any event causing the disruption of imports including the insolvency of a significant supplier, the imposition of additional import restrictions, or political or economic disruptions in a country where our vendor factories are located, could have a material adverse affect on our operations. We do not maintain any long-term or exclusive commitments or arrangements to purchase from any single supplier. </FONT></P> <P><FONT FACE="Times New Roman">All of our suppliers receive a vendor compliance manual that describes our quality standards and shipping instructions. We maintain a quality control department at our distribution center to inspect incoming merchandise shipments for uniformity of sizes and colors, and for overall quality of manufacturing. Periodic quality inspections are also made by our employees at manufacturing facilities in the United States and internationally to identify potential problems prior to shipment of merchandise. Additionally, our merchant group works directly with many factories to address quality control issues before merchandise is shipped.</FONT></P> <P><FONT FACE="Times New Roman"><B>Merchandise Design</B></FONT></P> <P><B><FONT FACE="Times New Roman"></FONT></B><FONT FACE="Times New Roman">A key element of our business strategy is to design products geared to a well-defined customer group and which embody the image of a casual, youthful lifestyle. Our internal design group is divided primarily into separate mens and womens design teams. The product development process begins with senior management in the merchandising and design areas, who develop seasonal merchandise themes and concepts. These design themes and concepts are developed through domestic and foreign travel, retail shopping and an awareness of fashions and activities currently favored by the young, active segment of the population. These themes and concepts are then used to create items for the merchandise line that are then developed by the designers. The designers collaborate with our buyers to create a coordinated merchandise presentation for each season, which is augmented by periodic, in-season merchandise updates.</FONT></P> <P><B><FONT FACE="Times New Roman">Merchandise Inventory, Replenishment and Distribution</FONT></B></P> <P><FONT FACE="Times New Roman">Purchase orders, executed by our buyers, are entered into the computerized merchandise data system at the time of order. Merchandise is normally shipped directly from vendors to our central distribution center near Pittsburgh, PA. Upon receipt, merchandise is entered into the merchandise data system, then processed and prepared for shipment to the stores or forwarded to a warehouse holding area to be used as store replenishment goods. The allocation of merchandise among stores varies based upon a number of factors relating to the specific characteristics of each store such as geographic location, customer demographics or store size. Merchandise is shipped to the stores two to three times per week depending upon the season and store requirements.</FONT></P> <P><FONT FACE="Times New Roman">The specialty retail apparel business fluctuates according to changes in the economy and customer preferences, dictated by fashion and season. These fluctuations especially affect the inventory owned by apparel retailers, since merchandise usually must be ordered well in advance of its selling season. While we endeavor to test many merchandise items before ordering large quantities, we are still vulnerable to changing fashion trends and fluctuations in customer demands. In addition, the cyclical nature of the retail business requires that we carry a significant amount of inventory, especially prior to peak selling seasons, when we build up our inventory levels. We enter into agreements for the manufacture and purchase of our private label apparel well in advance of the applicable selling season. As a result, we are vulnerable to changes in consumer demand, pricing shifts, and the timing and selection of merchandise purchases.</FONT></P> <P><FONT FACE="Times New Roman">We continually review our inventory levels in order to identify slow-moving merchandise and generally use markdowns to clear this merchandise. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or we determine that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have an adverse impact on our earnings, depending on the extent and amount of inventory affected.</FONT></P> <P><B><FONT FACE="Times New Roman">Customer Credit</FONT></B></P> <P><FONT FACE="Times New Roman">We offer our customers an American Eagle Outfitters private label credit card. We have no liability to the card issuer for bad debt expense, provided that purchases are made in accordance with the issuing banks' procedures. We believe that providing in-store credit through use of our proprietary credit card promotes incremental sales and encourages customer loyalty. Our credit card holders receive special promotional offers and advance notice of all in-store sales events. The names and addresses of these preferred customers are added to our customer database which is used primarily for direct mail purposes.<B> </B>Customers may also pay for their purchases with American Express®, Discover®, MasterCard®, Visa ®, cash or check. During Fiscal 1999, approximately 48% of all purchases were paid for with credit cards.</FONT></P> <P><FONT FACE="Times New Roman">In November 1998, we replaced our gift certificate program with stored value gift cards. Gift cards with values from $10 to $200 can be purchased. When the recipient uses the gift card, the value of the purchase is electronically deducted and any remaining value can be used for future purchases. During Fiscal 1999, we sold 98% more in gift cards and certificates than the prior year. In connection with stored value cards and gift certificates, a deferred revenue amount is established upon the purchase of the card by the customer and revenue is recognized upon redemption and purchase of the merchandise.</FONT></P> <P><B><FONT FACE="Times New Roman">Marketing and Advertising</FONT></B></P> <P><FONT FACE="Times New Roman">Our marketing and advertising strategies are designed to increase consumer recognition of our merchandise and establish American Eagle Outfitters as a differentiated lifestyle brand. We currently focus our advertising efforts on direct mail, in-store signage, promotional events, and print media. Seasonally, we review and consider other means of advertising. </FONT></P> <P></P> <P><FONT FACE="Times New Roman">In-store advertising is primarily communicated through large graphics that portray men and women engaged in activities associated with an active lifestyle. Promotions, contests and gifts with purchase are also offered to customers, often in conjunction with corporate partners whose target customer demographics are similar to ours. Examples of co-marketing efforts include music compact discs produced in conjunction with a national music magazine and contests for prizes including mountain bikes, four-wheel drive vehicles and vacation trips.</FONT></P> <P><FONT FACE="Times New Roman">We utilize direct mail to announce upcoming sales, the arrival of new merchandise and to promote our image. Promotional materials are also included in the monthly statement for our private label credit card. We use our own list of customers and database mining techniques to target direct mail materials to existing and potential customers.</FONT></P> <P><FONT FACE="Times New Roman">We also utilize print advertising to build recognition of our brand. Our print ads appear in nationwide publications with reader demographic profiles that match a segment of our target customer range.</FONT></P> <P><B><FONT FACE="Times New Roman">Information Systems</FONT></B></P> <P><FONT FACE="Times New Roman">Our computer information systems consist of a full range of retail financial and merchandising systems which include merchandise planning, distribution center processing, inventory allocation, shipment processing, in-store systems, sales reporting, and financial processing and reporting.</FONT></P> <P><FONT FACE="Times New Roman">In Fiscal 1999, our computer disaster recovery planning was expanded to cover all aspects of our business and we now have a detailed execution plan in the event of a major business disruption. During 1999, we made significant technological improvements in our stores including testing of in-store computers, implementing thermal printers, installing hand-held devices in our stores to increase efficiency in price changes and re-ticketing merchandise. A new merchandise allocation software application was implemented to support increased sales volumes. We initiated the planning, design, and testing of a new warehouse management system to be fully implemented in Spring 2000. We standardized hardware and software for both our home office and field personnel.</FONT></P> <P><FONT FACE="Times New Roman"> In June 1999, we completed the testing and implementation of software and systems to ensure that they successfully responded to the Year 2000 change. As a result of these efforts, we experienced no significant disruptions in mission critical information technology and non-information technology systems. We will continue to monitor our mission critical computer applications and those of our suppliers and business partners throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly. </FONT></P> <P><FONT FACE="Times New Roman">During 2000, we plan to install in-store computers in all our stores to link them with the home office. We will modify our programs related to our hand-held devices to encompass inventory receiving and transfer processing. We will begin implementation of supply chain software and begin creating a data warehouse for our organization.</FONT></P> <P><B><FONT FACE="Times New Roman">Competition</FONT></B></P> <P><FONT FACE="Times New Roman">The retail apparel industry is very competitive. We compete primarily on the basis of quality, fashion, service, selection and price. We compete with various divisions of The Limited and The Gap, as well as with retail chains such as Abercrombie & Fitch, The Buckle, Pacific Sunwear, and other national, regional and local retailers catering to a youthful customer. We also compete with the casual apparel and footwear departments of department stores, often in the same mall as our stores. Many of our competitors are considerably larger and have substantially greater financing, marketing, and other resources. </FONT></P> <P><B><FONT FACE="Times New Roman">Trademarks and Service Marks</FONT></B></P> <P><FONT FACE="Times New Roman">We have registered American Eagle Outfitters® in the U.S. Patent and Trademark Office ("PTO") as a trademark for clothing products and for a variety of non-clothing products, and as a service mark for retail clothing store service. We have also registered AE ® as a trademark for clothing products, and AEO® as a trademark for clothing products and a variety of non-clothing products. AE® is pending for a variety of non-clothing and personal care items. American Eagle has applied to the PTO for the registration of AE™ as a trademark for footwear that will be registered in the near future, and AE Khaki™, and AE Supply™ as trademarks for clothing products. Additionally, the on-line retail clothing trademark, @e, is registered as a trademark.</FONT></P> <P><FONT FACE="Times New Roman"><B>Employees</B></FONT></P> <P></P> <P><B><FONT FACE="Times New Roman"></FONT></B></P> <P><FONT FACE="Times New Roman">As of March 1, 2000, we had 8,149 employees, of whom 1,754 were full-time salaried employees, 609 were full-time hourly employees and 5,786 were part-time and seasonal hourly employees. We consider our relationship with our employees to be satisfactory.</FONT></P> <P><B><FONT FACE="Times New Roman">ITEM 2. PROPERTIES.</FONT></B></P> <P><FONT FACE="Times New Roman">We rent our headquarters and distribution facilities near Pittsburgh, PA from Linmar Realty Company (</FONT><FONT FACE="Courier New">"</FONT><FONT FACE="Times New Roman">Linmar</FONT><FONT FACE="Courier New">"</FONT><FONT FACE="Times New Roman">), a related party. Our headquarters and distribution center occupy approximately 430,000 square feet, 49,000 square feet of which is used for executive, administrative and buying offices. This includes an expansion of 120,000 square feet in September 1999. As a result of this expansion, a new lease was entered into which expires on December 31, 2020. We also lease additional office space comprising approximately 20,000 square feet near Pittsburgh, PA and approximately 15,000 square feet for our design and production offices in New York, NY. These leases expire in August 2004 and October 2008, respectively. In addition, we lease a distribution facility near Mexico City, Mexico for approximately 42,000 square feet.</FONT></P> <P><FONT FACE="Times New Roman">All of our stores are leased. The store leases generally have terms of approximately 10 years. Most of these leases provide for base rent and require the payment of a percentage of sales as additional rent when sales reach specified levels. Under our store leases, we are typically responsible for maintenance and common area charges, real estate taxes and certain other expenses. We have generally been successful in negotiating renewals as leases near expiration. </FONT></P> <P><B><FONT FACE="Times New Roman">ITEM 3. LEGAL PROCEEDINGS.</FONT></B></P> <P><FONT FACE="Times New Roman">We are subject to various claims and legal actions that arise in the ordinary course of our business. We believe that such claims and legal actions, individually and in the aggregate, will not have a material adverse effect on our business or our financial condition.</FONT></P> <P><B><FONT FACE="Times New Roman">ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</FONT></B></P> <P><FONT FACE="Times New Roman">Not applicable.</FONT></P> <P><B><FONT FACE="Times New Roman">PART II</FONT></B></P> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP><B><FONT FACE="Times New Roman">ITEM 5. </FONT></B></TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><B><FONT FACE="Times New Roman">MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.</FONT></B></TD> </TR> </TABLE> <P><FONT FACE="Times New Roman">Our stock is traded on the Nasdaq National Market under the symbol</FONT><FONT FACE="Courier New"> "</FONT><FONT FACE="Times New Roman">AEOS</FONT><FONT FACE="Courier New">"</FONT><FONT FACE="Times New Roman">. The following table sets forth the range of high and low sales prices of the common stock as reported on The Nasdaq National Market during the periods indicated. As of March 20, 2000, there were 197 stockholders of record. However, when including associates who own shares through the Company's 401(k) retirement plan and employee stock purchase plan and others holding shares in broker accounts under street name, the Company estimates the shareholder base at approximately 20,000. The following information reflects the January 1998, May 1998, and May 1999 stock splits.</FONT></P> <P></P> <P> <TABLE WIDTH="500" CELLPADDING="0" CELLSPACING="0" BORDER="0"> <TR> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> </TR> <TR> <TH VALIGN="bottom"> <DIV ALIGN="left"><FONT FACE="Times New Roman"></FONT><FONT FACE="Times New Roman" SIZE="2">For the Quarters Ended</FONT> </DIV> <HR NOSHADE ALIGN="left" WIDTH="60%" SIZE="1"> </TH> <TH VALIGN="TOP" COLSPAN="5"> <FONT FACE="Times New Roman" SIZE="2">Market Price</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> </TR> <TR> <TH VALIGN="TOP"></TH> <TH VALIGN="TOP" COLSPAN="2"> <FONT FACE="Times New Roman" SIZE="2">High</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> <TH VALIGN="bottom"></TH> <TH VALIGN="bottom" COLSPAN="2"> <FONT FACE="Times New Roman" SIZE="2">Low</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">April 1998</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">20.79</FONT></P> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">7.75</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">July 1998</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">26.75</FONT></P> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">16.57</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">October 1998</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">27.31</FONT></P> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">14.13</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">January 1999</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">34.19</FONT></P> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">21.88</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">April 1999</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">43.88</FONT></P> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">31.31</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">July 1999</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">51.69</FONT></P> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">37.88</FONT> </TD> </TR> <TR> <TD VALIGN="TOP" HEIGHT="20"> <P><FONT FACE="Times New Roman">October 1999</FONT> </TD> <TD VALIGN="TOP" HEIGHT="20"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP" HEIGHT="20"> <P ALIGN="right"><FONT FACE="Times New Roman">57.63</FONT> </TD> <TD VALIGN="TOP" HEIGHT="20"> </TD> <TD VALIGN="TOP" HEIGHT="20"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP" HEIGHT="20"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">32.69</FONT> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">January 2000</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">49.63</FONT></P> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  <FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">34.56</FONT></P> </TD> </TR> </TABLE> <P><FONT FACE="Times New Roman">We have never paid cash dividends and presently anticipate that all of our future earnings will be retained for the development of our business and the share repurchase program (See Note 12 of the Consolidated Financial Statements). We do not anticipate paying cash dividends in the foreseeable future. The payment of any future dividends will be at the discretion of our Board of Directors and will be based on future earnings, financial condition, capital requirements and other relevant factors.</FONT></P> <P> </P> <P><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA.</B></FONT></P> <DIV ALIGN="center"> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B><FONT SIZE="5">Selected Consolidated Financial Data</FONT><FONT SIZE="4"> <BR> </FONT> (dollars and shares in thousands, except per share amounts and square foot data)</B></FONT></DIV> <DIV ALIGN="center"> </DIV> <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%"> <TR VALIGN="BOTTOM"> <TD WIDTH="28%" ALIGN="LEFT"> </TD> <TD ALIGN="RIGHT" COLSPAN="10"> <DIV ALIGN="center"><B>For the Years Ended</B></DIV> </TD> </TR> <TR VALIGN="BOTTOM"> <TD WIDTH="28%" ALIGN="LEFT"> </TD> <TD ALIGN="RIGHT" COLSPAN="10"> <HR NOSHADE WIDTH="100%" SIZE="1"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD WIDTH="28%" ALIGN="LEFT" HEIGHT="37"> </TD> <TD WIDTH="14%" ALIGN="RIGHT" HEIGHT="37"> <DIV ALIGN="center"><B>January 29,</B></DIV> </TD> <TD WIDTH="2%" ALIGN="LEFT" HEIGHT="37"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD WIDTH="13%" ALIGN="RIGHT" HEIGHT="37"> <DIV ALIGN="center"><B>January 30,</B></DIV> </TD> <TD WIDTH="2%" ALIGN="LEFT" HEIGHT="37"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD WIDTH="12%" ALIGN="RIGHT" HEIGHT="37"> <DIV ALIGN="center"><B>January 31,</B></DIV> </TD> <TD WIDTH="2%" ALIGN="LEFT" HEIGHT="37"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD WIDTH="11%" ALIGN="RIGHT" HEIGHT="37"> <DIV ALIGN="center"><B>February 1,</B></DIV> </TD> <TD WIDTH="2%" ALIGN="LEFT" HEIGHT="37"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD WIDTH="11%" ALIGN="RIGHT" HEIGHT="37"> <DIV ALIGN="center"><B>February 3,</B></DIV> </TD> <TD WIDTH="3%" ALIGN="LEFT" HEIGHT="37"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> <DIV ALIGN="center"><B>2000</B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="center"><B>1999</B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> <DIV ALIGN="center"><B>1998</B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> <DIV ALIGN="center"><B>1997</B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> <DIV ALIGN="center"><B>1996(2)</B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> <HR NOSHADE SIZE="1" WIDTH="100%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> <HR NOSHADE SIZE="1" WIDTH="100%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> <HR NOSHADE SIZE="1" WIDTH="100%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> <HR NOSHADE SIZE="1" WIDTH="100%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> <HR NOSHADE SIZE="1" WIDTH="100%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="2%"> <DIV ALIGN="center"><B></B></DIV> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> <DIV ALIGN="center"><B>(Unaudited)</B></DIV> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Net sales (1)</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 832,104</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 587,600</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 405,713</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 326,404</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 340,323</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Gross profit</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 356,508</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 234,511</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 136,967</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 98,756</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 90,908</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Gross profit as a percentage of sales</TD> <TD ALIGN="RIGHT" WIDTH="14%">42.8</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="13%">39.9</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="12%">33.8</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="11%">30.3</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="11%">26.7</TD> <TD ALIGN="LEFT" WIDTH="3%">%</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Operating income (loss) (1)</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 149,514</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 87,053</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 31,120</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 8,859</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">($ 1,073</TD> <TD ALIGN="LEFT" WIDTH="3%">)</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Net income (loss)</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 90,660</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 54,118</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 19,537</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 5,925</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">($ 1,334</TD> <TD ALIGN="LEFT" WIDTH="3%">)</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Net income (loss) as a percentage of sales</TD> <TD ALIGN="RIGHT" WIDTH="14%">10.9</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="13%">9.2</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="12%">4.8</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="11%">1.8</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="11%">(0.4</TD> <TD ALIGN="LEFT" WIDTH="3%">%)</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Basic earnings (loss) per share</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 1.96</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 1.20</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 0.44</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 0.13</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">($ 0.03</TD> <TD ALIGN="LEFT" WIDTH="3%">)</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Diluted earnings (loss) per share</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 1.86</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 1.13</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 0.43</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 0.13</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">($ 0.03</TD> <TD ALIGN="LEFT" WIDTH="3%">)</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Weighted average basic shares outstanding</TD> <TD ALIGN="RIGHT" WIDTH="14%">46,370</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">45,281</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">44,181</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">43,899</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">43,890</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Weighted average diluted shares outstanding</TD> <TD ALIGN="RIGHT" WIDTH="14%">48,742</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">47,952</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">45,633</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">45,388</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">43,890</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Total assets</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 354,628</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 210,948</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 144,795</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 110,438</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 95,363</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Total cash and short-term investments</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 168,492</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 85,300</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 48,359</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 34,326</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 19,986</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Working capital</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 174,137</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 94,753</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 48,486</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 34,378</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 24,775</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Stockholders' equity</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 264,501</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 151,197</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 90,808</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 71,056</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 63,796</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Average return on stockholders' equity</TD> <TD ALIGN="RIGHT" WIDTH="14%">43.6</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="13%">44.7</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="12%">24.1</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="11%">8.8</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="11%">(2.3</TD> <TD ALIGN="LEFT" WIDTH="3%">%)</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Current ratio</TD> <TD ALIGN="RIGHT" WIDTH="14%">2.97</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">2.59</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">1.90</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">1.87</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">1.78</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Total non-current liabilities</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 1,702</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">--</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">--</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">--</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">--</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Long term debt</TD> <TD ALIGN="RIGHT" WIDTH="14%">--</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">--</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">--</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">--</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">--</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Total stores at year-end</TD> <TD ALIGN="RIGHT" WIDTH="14%">466</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">386</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">332</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">303</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">273</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Comparable store sales increase (decrease)</TD> <TD ALIGN="RIGHT" WIDTH="14%">20.9</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="13%">32.1</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="12%">15.1</TD> <TD ALIGN="LEFT" WIDTH="2%">%</TD> <TD ALIGN="RIGHT" WIDTH="11%">(1.8</TD> <TD ALIGN="LEFT" WIDTH="2%">%)</TD> <TD ALIGN="RIGHT" WIDTH="11%">6.6</TD> <TD ALIGN="LEFT" WIDTH="3%">%</TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Net sales per average selling square foot (3)</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 569</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 497</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 391</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 340</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 381</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Total selling square feet at end of period</TD> <TD ALIGN="RIGHT" WIDTH="14%">1,625,731</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">1,276,889</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">1,080,657</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">990,980</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">916,796</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Net sales per average gross square foot (3)</TD> <TD ALIGN="RIGHT" WIDTH="14%">$ 451</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">$ 388</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">$ 303</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 261</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">$ 288</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%"> </TD> <TD ALIGN="RIGHT" WIDTH="14%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%"> </TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> <TR VALIGN="BOTTOM"> <TD ALIGN="LEFT" WIDTH="28%">Total gross square feet at end of period</TD> <TD ALIGN="RIGHT" WIDTH="14%">2,039,380</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="13%">1,624,933</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="12%">1,393,361</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">1,285,598</TD> <TD ALIGN="LEFT" WIDTH="2%"> </TD> <TD ALIGN="RIGHT" WIDTH="11%">1,200,816</TD> <TD ALIGN="LEFT" WIDTH="3%"> </TD> </TR> </TABLE> <P> </P> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2%><FONT FACE="Times New Roman">(1)</FONT></TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><FONT FACE="Times New Roman">The prior year amounts have been reclassified to conform to the January 29, 2000 classifications.</FONT> </TD> </TR> </TABLE> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2%><FONT FACE="Times New Roman">(2)</FONT></TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><FONT FACE="Times New Roman">The 53-week period ended February 3, 1996 includes 9 months of sales, or $21.5 million, from outlet stores sold in October 1995. It also includes 6 months of operations from the year ended July 29, 1995, representing $113.7 million of net sales, $13.7 million of operating loss, and $8.4 million of net loss.</FONT></TD> </TR> </TABLE> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2%><FONT FACE="Times New Roman">(3)</FONT></TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><FONT FACE="Times New Roman">Average net sales per square foot is calculated using retail sales for the period divided by the straight average of the beginning and ending square footage for the period.</FONT></TD> </TR> </TABLE> <P></P> <P><B><FONT FACE="Times New Roman"></FONT></B></P> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0 HEIGHT="20"> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP><B><FONT FACE="Times New Roman">ITEM 7. </FONT></B></TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><B><FONT FACE="Times New Roman">MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.</FONT></B></TD> </TR> </TABLE> <P><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>O</B></FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>verview</B></FONT></P> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We achieved record sales and earnings for the year ended January 29, 2000 ("Fiscal 1999"). Our record sales and profitability resulted from our focus on several brand and merchandise strategies developed to enhance our brand image and differentiate us from our competition. During Fiscal 1999, we emphasized these brand and merchandising strategies:</FONT></DIV> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">invested in our brand through increased marketing efforts,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">committed to key merchandise items that are current, value-priced, intelligently-sourced and carefully promoted to maximize sales and profitability,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">premiered a new store design, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">increased our focus on AE Direct, our internet and catalog business.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">During Fiscal 1999, we continued to expand the non-store distribution of our merchandise by providing commerce opportunities on our Internet web site, <I>ae.com</I>, and through catalog promotions. We circulated five catalogs to four million customers, an increase in distribution of 34% over the prior year. In 1999, more customers shopped at our internet store, <I>ae.com</I> than ever before.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We opened 80 new stores, including 2 flagship stores, and upgraded 25 store locations during 1999. We premiered a new store design in five locations. Our goal with this design is to provide a store environment that is inviting and comfortable.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Additionally, we continue to invest in our distribution infrastructure. Over the past two years, we have invested approximately $9.5 million to upgrade our distribution center. This investment has lowered our unit processing costs by 8% in 1998 and by an additional 12% in 1999. Additionally, we increased our distribution and headquarters facility by 120,000 square feet. We believe these investments will continue to improve the efficiency for replenishment and processing of new orders and increase the capacity of our Warrendale facility to 700 stores.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">As a result of these initiatives, our sales for Fiscal 1999 increased to $832.1 million compared to $587.6 million for the year ended January 30, 1999 ("the prior year" or "Fiscal 1998"), an increase of 41.6%. Comparable store sales increased 20.9% compared to the prior year. This was achieved on top of a 32.1% comparable store sales increase in Fiscal 1998. Our strong sales performance was driven primarily by a 42.0% increase over last year in the number of merchandise units sold. Additionally, gross profit increased to $356.5 million, or 42.8% of sales, for Fiscal 1999, compared to $234.5 million, or 39.9% of sales for the prior year. The increased gross profit reflected implementation of our brand and merchandising strategies, resulting in improved merchandise mark-ons, decreased markdowns as a percent of sales, and improved leveraging of buying, occupancy and warehousing costs.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Fiscal 1999's record gross profit translated into significantly improved operating profit and net income. Operating profit </FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times">for Fiscal 1999 increased 71.8% to $149.5 million compared to $87.1 million in the prior year. Net income for Fiscal 1999 was $90.7 million, or $1.86 per diluted share, compared to $54.1 million, or $1.13 per diluted share, in the prior year. Our strong operating performance for the year allowed us to fund working capital requirements and capital expenditure needs entirely through cash flow. No borrowings were required under our $100.0 million credit facility.</FONT></P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our balance sheet strengthened as a result of the record operating performance achieved in Fiscal 1999. As of January 29, 2000, cash and cash equivalents, including short-term investments, increased by approximately 98% to $168.5 million from $85.3 million as of January 30, 1999. Inventory was $60.4 million compared with $49.7 million at the end of the prior year, and increased approximately 1.0% on a per store basis. Stockholders' equity increased approximately 75% to $264.5 million, or $5.66 per share, at the end of Fiscal 1999 compared to $151.2 million, or $3.28 per share, at the end of the prior period. Average return on stockholders' equity was 43.6% for Fiscal 1999, compared with 44.7% for Fiscal 1998.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Results of Operations</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">This table shows, for the periods indicated, the percentage relationship to net sales of the listed items included in the Company's Consolidated Statements of Operations.</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="315"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="69"> </TH> <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Fiscal Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="315"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"> </FONT></TH> <TH WIDTH="69"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="16"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="16"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net sales</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100.0</FONT></DIV> </TD> <TD VALIGN="bottom" ALIGN="left"> <DIV ALIGN="left">%</DIV> </TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100.0</FONT></DIV> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="12"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></DIV> </TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100.0</FONT></DIV> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="12"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></DIV> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Cost of sales, including certain buying, occupancy and warehousing expenses</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">57.2</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">60.1</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">66.2</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="315"> </TD> <TD WIDTH="69"> </TD> <TD WIDTH="48"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="50"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="49"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Gross profit</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">42.8</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">39.9</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">33.8</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Selling, general and administrative expenses</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">23.4</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">23.6</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">24.3</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Depreciation and amortization expense</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1.4</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1.5</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1.8</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="315"> </TD> <TD WIDTH="69"> </TD> <TD WIDTH="48"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="50"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="49"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Operating income</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">18.0</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">14.8</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">7.7</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Investment income (expense), net</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">0.4</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">0.3</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="315"> </TD> <TD WIDTH="69"> </TD> <TD WIDTH="48"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="50"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="49"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Income before income taxes</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">18.0</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">15.2</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">8.0</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Provision for income taxes</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">7.1</FONT></DIV> </TD> <TD ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">6.0</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">3.2</FONT></DIV> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="315"> </TD> <TD WIDTH="69"> </TD> <TD WIDTH="48"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="50"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="49"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="315" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net income</FONT></TD> <TD WIDTH="69"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="48"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">10.9</FONT></DIV> </TD> <TD VALIGN="bottom" ALIGN="left"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></DIV> </TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="50"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">9.2</FONT></DIV> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="12"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></DIV> </TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="49"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4.8</FONT></DIV> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="12"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></DIV> </TD> </TR> <TR> <TD WIDTH="315"> </TD> <TD WIDTH="69"> </TD> <TD WIDTH="48"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="50"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="49"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="12" ALIGN="left" VALIGN="bottom"> </TD> </TR> </TABLE> <DIV><FONT SIZE="2"> </FONT></DIV> <DIV ALIGN="left"><FONT SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>Comparison of Fiscal 1999 to Fiscal 1998</B></FONT></DIV> <P> </P> <P></P> <P><B><FONT FACE="Times New Roman"></FONT></B></P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net sales increased 41.6% to $832.1 million from $587.6 million. The increase includes:</FONT></DIV> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$118.8 million from comparable store sales, representing a 20.9% increase over the prior year, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$125.7 million from new and noncomparable store sales, and nonstore sales.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The increase resulted primarily from an increase of 42.0% in units sold. We operated 466 stores at the end of Fiscal 1999, compared to 386 stores at the end of Fiscal 1998.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Gross profit increased 52.0% to $356.5 million from $234.5 million. Gross profit as a percent of net sales increased to 42.8% from 39.9%. The increase in gross profit as a percent of net sales, was attributable to a 2.1% increase in merchandise margins as well as a 0.8% improvement in buying, occupancy, and warehousing costs. The increase in merchandise margins resulted from improved mark-ons and a decrease in markdowns as a percent of sales. The improvement in buying, occupancy, and warehousing costs reflects improved leveraging achieved through comparable store sales growth.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Selling, general and administrative expenses increased to $194.8 million from $138.8 million. As a percent of net sales, these expenses decreased to 23.4% from 23.6%. The $56.0 million increase includes:</FONT></DIV> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$15.4 million in store operating expenses to support new store growth,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$15.0 million in compensation and benefit costs related to additional personnel to support the increased sales volume and incentive programs that reward employees for the achievement of key performance indicators,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$8.2 million for direct mail, signage, promotional advertising, and catalog and non-store advertising,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$7.2 million in additional outside service costs to support the growing business, including the non-store business,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$2.6 million related to equipment costs, primarily leasing store registers and other hardware, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$7.6 million for other selling, general, and administrative expenses.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Depreciation and amortization expense increased to $12.2 million from $8.6 million. As a percent of net sales, these expenses decreased to 1.4% from 1.5%.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">For Fiscal 1999, we had interest income of $4.4 million, which was offset by investment expense of $4.6 million. Investment expense resulted from a valuation adjustment related to a marketable equity security during the fourth quarter of Fiscal 1999. Interest income increased from $2.4 million as a result of higher cash reserves available for investment. No borrowings were required under the terms of our line of credit during the current or prior period.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Income before income taxes increased to $149.4 million from $89.5 million. As a percent of net sales, income before income taxes increased to 18.0% from 15.2%. The increase in income before income taxes as a percent of sales was attributable to the factors noted above.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Comparison of Fiscal 1998 to Fiscal 1997</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net sales increased 44.8% to $587.6 million from $405.7 million. The increase includes:</FONT></DIV> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$127.3 million from comparable store sales, representing a 32.1% increase over the prior year, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$54.6 million from new and noncomparable store sales, and nonstore sales.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The increase resulted from an increase of 31.6% in units sold, as well as an 8.8% increase in prices. We operated 386 stores at the end of Fiscal 1998, compared to 332 stores at the end of Fiscal 1997.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Gross profit increased to $234.5 million from $137.0 million. Gross profit as a percent of net sales increased to 39.9% from 33.8%. The increase in gross profit as a percent of net sales, was attributable to a 3.6% increase in merchandise margins as well as a 2.5% improvement in buying, occupancy, and warehousing costs. The increase in merchandise margins resulted from a decrease in markdowns as a percent of sales, and improved mark-ons. This improvement in buying, occupancy, and warehousing costs reflects improved leveraging achieved through comparable store sales growth.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Selling, general and administrative expenses increased to $138.8 million from $98.5 million. As a percent of net sales,</FONT><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times">these expenses decreased to 23.6% from 24.3%. The $40.3 million increase includes:</FONT></P> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$16.9 million in compensation costs to support increased sales and new incentive programs,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$9.0 million for general services purchased, supplies, and other expenses,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$7.8 million in store operating expenses to support new store growth,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$5.4 million for increased promotional advertising, direct mail, catalog and Internet development costs, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1.2 million related to costs in connection with the Natco merger.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Depreciation and amortization expense increased to $8.6 million from $7.3 million. As a percent of net sales, these expenses decreased to 1.5% from 1.8%.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Interest income increased to $2.4 million from $1.2 million as a result of higher cash reserves available for investment. No borrowings were required under the terms of our line of credit during the current or prior period.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Income before income taxes increased to $89.5 million from $32.3 million. As a percent of net sales, income before income taxes increased to 15.2% from 8.0%. The increase in income before income taxes as a percent of sales was attributable to the factors noted above.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Liquidity and Capital Resources</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Our primary source of cash in Fiscal 1999 was from operations. Additionally, maturity of our short-term investments resulted in proceeds of $38.8 million. Our primary uses of cash included $124.2 million to purchase short-term investments, $45.6 million in capital expenditures, and $10.7 million to support inventory increases for anticipated sales and new store growth. Working capital at year-end was $174.1 million for Fiscal 1999, $94.8 million for Fiscal 1998, and $48.5 million for Fiscal 1997. The increase in total cash during Fiscal 1999 resulted primarily from the increase in cash provided by operating activities.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">For Fiscal 1999, the source of the $132.9 million of cash provided by operating activities was net income adjusted for non-cash charges for depreciation and amortization. This cash was used primarily for capital expenditures and to purchase short-term investments that can be sold at any time. The remainder of the cash flow provided by operating activities is being retained for new store growth, store remodels, system enhancements, and other capital expenditures. We fund merchandise purchases through operating cash flow.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">At January 29, 2000, we had an unsecured demand lending arrangement with a bank to provide a $100.0 million line of credit at either the lender's prime lending rate (8.50% at January 29, 2000) or a negotiated rate such as LIBOR. The facility has a limit of $40.0 million to be used for direct borrowing. No borrowings were required against the line during Fiscal 1999. At January 29, 2000, letters of credit in the amount of $56.9 million were outstanding leaving a remaining available balance on the line of $43.1 million.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Capital expenditures, net of construction allowances, totaled $45.6 million for Fiscal 1999. These expenditures included:</FONT></DIV> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$18.8 million related to the addition of 80 new stores,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$9.4 million for 25 remodeled locations,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$4.0 million in improvements to our distribution center,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$2.8 million in warehousing systems costs,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$2.2 million in improvements to our corporate offices,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1.7 million in systems improvements,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1.4 million in fixture and leasehold retrofits to existing stores,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1.1 million related to future store openings, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$4.2 million in other capital expenditures.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We expect capital expenditures for Fiscal 2000 to total approximately $118 million. We plan to open approximately 90 stores during Fiscal 2000 at an estimated cost of $39 million. Additionally, we will select approximately 40 locations to upgrade to our newest store design in Fiscal 2000 for an estimated cost of $17 million. In Fiscal 2000, we plan to start construction on a second distribution facility estimated to cost approximately $45 million. This will allow us to continue to improve replenishment and processing of new orders and increase the capacity of our distribution facilities to approximately 1,400 stores. Additionally, we plan to spend approximately $9 million to install new systems including both hardware and software for our stores, corporate office, and existing distribution facility. We plan to fund these capital expenditures primarily through available cash, investments, and cash flow from operations. These forward-looking statements will be influenced by our financial position, consumer spending, availability of financing, and the number of acceptable mall store leases that may become available.</FONT></P> <P><FONT FACE="Times New Roman">Our growth strategy includes the possibility of growth through acquisitions. We periodically consider and evaluate acquisitions and opportunities to support future growth and may undertake acquisitions in 2000. At this time we have not committed to any material future acquisition. In the event we did pursue material future acquisitions, such actions could require additional equity or debt financing, which we would seek to obtain as required. There can be no assurance that we will be successful in closing any potential acquisition transaction, or that any acquisition we undertake will increase our profitability.</FONT></P> <P><B><FONT FACE="Times New Roman">Income Taxes</FONT></B></P> <P><FONT FACE="Times New Roman">We had deferred tax assets of $17.2 million at January 29, 2000 which resulted from financial and tax accounting differences. We have had taxable income during each of the past three tax years and anticipate that future taxable income will be able to recover the full amount of the deferred tax asset. Assuming a 40% effective tax rate, we will need to recognize pre-tax net income of $43.0 million in future periods to recover existing deferred tax amounts. See Note 8 of the Consolidated Financial Statements.</FONT></P> <P><B><FONT FACE="Times New Roman">Impact of Inflation</FONT></B></P> <P><FONT FACE="Times New Roman">We do not believe that the relatively modest levels of inflation experienced in the United States in recent years have had a significant effect on our net sales or our profitability. Substantial increases in cost, however, could have a significant impact on our business and the industry in the future.</FONT></P> <P> </P> <P><B><FONT SIZE="2"></FONT><FONT FACE="Times New Roman"></FONT></B><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Impact of Year 2000</B></FONT></P> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In prior years, we discussed the nature and progress of our plans to become Year 2000 ready. In June 1999, we completed our correction phase which included repair and resolution and testing and implementation of software and systems. As a result of these efforts, we experienced no significant disruptions in mission critical information technology and non-information technology systems and we believe those systems successfully responded to the Year 2000 date change. The total cost of the Year 2000 project was $2.0 million and was funded through cash flows from operations. Of the total cost, $0.5 million relates to hardware and software which was capitalized. The remaining costs were expensed as incurred and include salaries, incentive compensation and third party consulting services. We will continue to monitor our mission critical computer applications and those of our suppliers and business partners throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Safe Harbor Statement, Business Risks, and Seasonality</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">This report contains various "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent our expectations or beliefs concerning future events, including the following:</FONT></DIV> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the planned opening of approximately 90 stores in Fiscal 2000,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the selection of approximately 40 stores for remodeling,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the opening of an additional distribution facility, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the possibility of growth through acquisitions.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We caution that these statements are further qualified by factors that could cause our actual results to differ materially from those in the forward-looking statements, including without limitation, the following:</FONT></DIV> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">our ability to anticipate and respond to changing consumer preferences and fashion trends in a timely manner,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">decline in demand for our merchandise,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the ability to obtain suitable sites for new stores at acceptable costs,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the integration of new stores into existing operations,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">customer acceptance of our new store design,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">our ability to successfully acquire and integrate other businesses,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the integration of our additional distribution facility into existing operations,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the expansion of buying and inventory capabilities,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the hiring and training of qualified personnel,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the availability of capital,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the effect of overall economic conditions and consumer spending patterns,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the effect of changes in weather patterns,</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the change in currency and exchange rates, duties, tariffs, or quotas, and</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="2%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></DIV> </TD> <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">the effect of competitive pressures from other retailers.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The impact of the above factors, some of which are beyond our control, may cause our actual results actually to differ materially from expected results in these statements and other forward-looking statements we may make from time-to-time.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Historically, our operations have been seasonal, with a significant amount of net sales and net income occurring in the fourth fiscal quarter, reflecting increased demand during the year-end holiday selling season and, to a lesser extent, the third quarter, reflecting increased demand during the back-to-school selling season. During Fiscal 1999, these periods accounted for approximately 56% of our sales. As a result of this seasonality, any factors negatively affecting us during the third and fourth fiscal quarters of any year, including adverse weather or unfavorable economic conditions, could have a material adverse effect on our financial condition and results of operations for the entire year. Our quarterly results of operations also may fluctuate based upon such factors as the timing of certain holiday seasons, the number and timing of new store openings, the amount of net sales contributed by new and existing stores, the timing and level of markdowns, store closings, refurbishments and relocations, competitive factors, weather and general economic conditions.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Not applicable.</FONT></DIV> <P> </P> <P></P> <P><B><FONT FACE="Times New Roman">ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA</FONT></B></P> <P><B><FONT FACE="Times New Roman">AMERICAN EAGLE OUTFITTERS, INC.</FONT></B></P> <P><B><FONT FACE="Times New Roman">CONSOLIDATED BALANCE SHEETS</FONT></B></P> <P><I><FONT FACE="Times New Roman">(Dollars in thousands)</FONT></I></P> <P><P> <TABLE WIDTH="690" CELLPADDING="0" CELLSPACING="0" BORDER="0"> <TR> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> <TD></TD> </TR> <TR> <TD VALIGN="bottom"> <P><I></I></P> </TD> <TH VALIGN="TOP" COLSPAN="2">  <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">January 29, <BR> 2000</FONT> <HR NOSHADE ALIGN="center" WIDTH="96%" SIZE="1"> </TH> <TH VALIGN="bottom" COLSPAN="2">  <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">January 30, <BR> 1999</FONT> <HR NOSHADE ALIGN="center" WIDTH="96%" SIZE="1"> </TH> <TH VALIGN="bottom" COLSPAN="2">  <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">January 31, <BR> 1998</FONT> <HR NOSHADE ALIGN="center" WIDTH="96%" SIZE="1"> </TH> </TR> <TR> <TD VALIGN="TOP"><B><FONT FACE="Times New Roman">Assets</FONT></B></TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Current assets:</FONT></P> </TD> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Cash and cash equivalents</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 76,581</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 71,940</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 48,359</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Short-term investments</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">91,911</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">13,360</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">—</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Merchandise inventory</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">60,375</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">49,688</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">36,278</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Accounts and note receivable, including related party</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">13,471</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">8,560</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">7,647</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Prepaid expenses and other</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">6,640</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">2,757</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">5,388</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Deferred income taxes</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">13,584</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">8,199</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">4,801</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Total current assets</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">262,562</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">154,504</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">102,473</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Fixed assets:</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Fixtures and equipment</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">52,158</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">36,307</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">25,842</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Leasehold improvements</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">70,403</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">46,996</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">35,978</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">122,561</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">83,303</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">61,820</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Less: Accumulated depreciation </FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">37,635</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">29,933</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">23,273</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">84,926</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">53,370</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">38,547</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Other assets, less accumulated amortization</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">7,140</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3,074</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3,775</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Total assets</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 354,628</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 210,948</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 144,795</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><B><FONT FACE="Times New Roman">Liabilities and stockholders' equity</FONT></B></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Current liabilities:</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP">  </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Accounts payable</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 30,700</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 18,551</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 24,606</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Accrued compensation and payroll taxes</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">21,307</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">17,739</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">9,227</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Accrued rent</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">17,755</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">13,042</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">7,909</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Accrued income and other taxes</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">7,927</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">4,773</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">9,715</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Unredeemed stored value cards and gift certificates</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">7,703</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">3,372</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">1,703</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman"> Other liabilities and accrued expenses</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">3,033</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">2,274</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">827</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Total current liabilities </FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">88,425</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">59,751</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">53,987</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Commitments and contingencies </FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">—</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">—</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">—</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Total noncurrent liabilities </FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">1,702</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">—</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">—</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Stockholders' equity</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">264,501</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">151,197</FONT></P> </TD> <TD VALIGN="TOP"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">90,808</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP"> <P><FONT FACE="Times New Roman">Total liabilities and stockholders' equity</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 354,628</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 210,948</FONT></P> </TD> <TD VALIGN="TOP"> <P ALIGN="right"> </P> </TD> <TD VALIGN="TOP"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 144,795</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="TOP"> </TD> <TD VALIGN="TOP"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> </TR> </TABLE> <P ALIGN="center"><FONT FACE="Times New Roman">See Notes to Consolidated Financial Statements</FONT></P> <P ALIGN="left"><B><FONT FACE="Times New Roman">AMERICAN EAGLE OUTFITTERS, INC.</FONT></B></P> <P ALIGN="left"><B><FONT FACE="Times New Roman"> CONSOLIDATED STATEMENTS OF OPERATIONS</FONT></B></P> <P ALIGN="left"><I><FONT FACE="Times New Roman">(In thousands, except per share amounts)</FONT></I></P> <TABLE WIDTH="690" CELLPADDING="0" CELLSPACING="0" BORDER="0" ALIGN="center"> <TR> <TD WIDTH="348"></TD> <TD WIDTH="18"></TD> <TD WIDTH="85"></TD> <TD WIDTH="18"></TD> <TD WIDTH="85"></TD> <TD WIDTH="18"></TD> <TD WIDTH="86"></TD> </TR> <TR> <TD COLSPAN="7" VALIGN="TOP"> <P><I></I></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348">  </TD> <TH COLSPAN="6" VALIGN="bottom"> <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">For the Years Ended</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> </TR> <TR> <TD VALIGN="TOP" WIDTH="348">  </TD> <TH VALIGN="bottom" WIDTH="103" COLSPAN="2">  <FONT FACE="Times New Roman" SIZE="2">January 29, <BR> </FONT><FONT FACE="Times New Roman" SIZE="2">2000</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> <TH VALIGN="bottom" WIDTH="103" COLSPAN="2"> <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">January 30, <BR> </FONT><FONT FACE="Times New Roman" SIZE="2">1999</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> <TH VALIGN="bottom" WIDTH="104" COLSPAN="2"> <P><FONT FACE="Times New Roman" SIZE="2">January 31, <BR> </FONT><FONT FACE="Times New Roman" SIZE="2">1998</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Net sales</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 832,104</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"> </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman"> <FONT FACE="Times New Roman">$ </FONT>587,600</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right"> </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman"> <FONT FACE="Times New Roman">$</FONT> 405,713</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348" NOWRAP> <P><FONT FACE="Times New Roman">Cost of sales, including certain buying, occupancy and warehousing expenses</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">475,596</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">353,089</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">268,746</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Gross profit</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">356,508</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">234,511</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">136,967</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Selling, general and administrative expenses<B> </B></FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">194,795</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">138,847</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">98,529</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Depreciation and amortization<B> </B>expense</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">12,199</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">8,611</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">7,318</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Operating income<B> </B></FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">149,514</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">87,053</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">31,120</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Investment income (expense), net<B> </B></FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">(160</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <FONT FACE="Times New Roman">)</FONT> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">2,436</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">1,158</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Income before income taxes</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">149,354</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">89,489</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">32,278</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Provision for income taxes</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">58,694</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">35,371</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">12,741</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Net income </FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 90,660</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 54,118</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 19,537</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Basic earnings per common share</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 1.96</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"> </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman"> <FONT FACE="Times New Roman">$</FONT> 1.20</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right"> </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman"> <FONT FACE="Times New Roman">$ </FONT>0.44</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Diluted earnings per common share</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"> </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman"> <FONT FACE="Times New Roman">$ </FONT>1.86</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 1.13</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">$ 0.43</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Weighted average common shares outstanding - basic</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">46,370</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">45,281</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">44,181</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> <P><FONT FACE="Times New Roman">Weighted average common shares outstanding - diluted</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">48,742</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="85"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">47,952</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="86"> <P ALIGN="RIGHT"><FONT FACE="Times New Roman">45,633</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="348"> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="bottom" WIDTH="12" ALIGN="left"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="85"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="top" WIDTH="18"> <DIV ALIGN="right"></DIV> </TD> <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="2"> </TD> </TR> </TABLE> <P ALIGN="center"><FONT FACE="Times New Roman">See Notes to Consolidated Financial Statements</FONT></P> <P> </P> <P><FONT SIZE="2"></FONT> </P> <P ALIGN="left"><B><FONT FACE="Times New Roman">AMERICAN EAGLE OUTFITTERS, INC.</FONT></B> </P> <P ALIGN="left"><B><FONT FACE="Times New Roman">CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY</FONT></B> </P> <P ALIGN="left"><B><I><FONT FACE="Times New Roman">For the years ended January 29, 2000, January 30, 1999, and January 31, 1998</FONT></I></B> </P> <P ALIGN="left"><I><FONT FACE="Times New Roman">(In thousands)</FONT></I></P> <P ALIGN="left"> </P> <TABLE ALIGN="center" WIDTH="690" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH><FONT SIZE="1"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Shares <BR> (1)</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> <TH VALIGN="bottom"><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Common <BR> Stock</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> <TH VALIGN="bottom"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Contributed <BR> Capital</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> <TH VALIGN="bottom"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Retained <BR> Earnings</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> <TH VALIGN="bottom"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Treasury <BR> Stock</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> <TH VALIGN="bottom"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Deferred <BR> Compensation <BR> Expense</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> <TH VALIGN="bottom"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Other <BR> Comprehensive <BR> Loss</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> <TH VALIGN="bottom"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Stockholders' <BR> Equity</B></FONT><FONT SIZE="2"> </FONT><FONT SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Balance at February 1, 1997</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9,918</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$ 99</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$58,299</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$ 17,119</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$(1,625</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$(2,836</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$ —</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$ 71,056</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net income and comprehensive income</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">19,537</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">19,537</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Exercise of stock options</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">115</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">973</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">974</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Tax benefit realized on exercised stock options and vested restricted stock</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">277</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">277</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Investment in Prophecy, Ltd.</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1,350</FONT></TD> <TD VALIGN="bottom" ALIGN="left" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(900</FONT></TD> <TD VALIGN="bottom" ALIGN="left" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD HEIGHT="14"><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(2,250</FONT></TD> <TD VALIGN="bottom" ALIGN="left" HEIGHT="14"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Restricted stock and stock option compensation</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">370</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">844</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1,214</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Three-for-two stock split-Jan. 5, 1998</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4,978</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">50</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(50</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Balance at January 31, 1998</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">15,011</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">150</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">58,519</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">35,756</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1,625</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1,992</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">90,808</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net income and comprehensive income</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">54,118</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">54,118</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Exercise of stock options</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">426</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1,776</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1,780</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Tax benefit realized on exercised stock options and vested restricted stock</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2,255</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2,255</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Restricted stock and stock option compensation</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1,336</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1,336</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Restricted stock grant</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">64</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1,417</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">345</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1,763</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Merger costs incurred by Natco</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">900</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">900</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Three-for-two stock split-May 8, 1998</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7,554</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">76</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(76</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Two-for-one stock split-May 3, 1999</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">23,055</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">230</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(230</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> </TR> <TR> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Balance at January 30, 1999</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">46,110</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">461</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">64,561</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">89,874</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1,280</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(2,419</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">151,197</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Exercise of stock options</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">630</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2,670</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> 2,676</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Tax benefit realized on exercised stock options and vested restricted stock</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">16,445</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">16,445</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Restricted stock and stock option grant</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6,794</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(6,794</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Restricted stock and stock option compensation</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">5,809</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">5,809</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Retirement of treasury stock</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1,280)</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1,280</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Comprehensive income:</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"><FONT SIZE="2"></FONT></TD> <TD><FONT SIZE="2"></FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Net income</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">90,660</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">90,660</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Unrealized loss on investments, net of tax</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(2,286</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(2,286</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Total comprehensive income</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">88,374</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> </TR> <TD COLSPAN=23><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" WIDTH="143" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Balance at January 29, 2000</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">46,740</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$467</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$89,190</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$180,534</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$ —-</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$(3,404</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$(2,286</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$264,501</FONT></TD> <TD><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> <TD><FONT SIZE="1"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </FONT></TD> <TD><FONT SIZE="2"> </FONT></TD> </TR> </TABLE> <P><P> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2%><B><I><FONT FACE="Times New Roman" SIZE="2">(1)</FONT></I></B></TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><B><I><FONT FACE="Times New Roman" SIZE="2">125 million authorized, 47 million , 46 million, and 45 million issued and outstanding, $.01 par value common stock at January 29, 2000, January 30, 1999, and January 31, 1998, respectively. The Company has 5 million authorized with none issued or outstanding $.01 par value preferred stock at January 29, 2000.</FONT></I></B></TD> </TR> </TABLE> <P ALIGN="center"><FONT FACE="Times New Roman">See Notes to Consolidated Financial Statements</FONT> </P> <P> <A NAME="TopOfPage"> </A> <FONT SIZE="2"></FONT></P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>AMERICAN EAGLE OUTFITTERS, INC.</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>(In thousands)</B></FONT></P> <P></P> </DIV> <TABLE ALIGN="center" WIDTH="690" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="411"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="18"> </TH> <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="411"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="18"> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="19"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="18"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Operating activities:</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net income</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 90,660</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 54,118</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 19,537</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Adjustments to reconcile net income to net cash provided by operating activities:</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="5"></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="67"></TD> <TD WIDTH="5"></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="9"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Depreciation and amortization</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">12,199</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">8,611</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">7,318</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Loss on impairment and write-off of fixed assets</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,907</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,467</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,292</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Restricted stock compensation</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">5,809</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,336</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,214</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Deferred income taxes</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(7,214</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(2,753</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(496</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Investment expense</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4,554</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Merger costs incurred by Natco</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">900</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="9"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Changes in assets and liabilities:</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="5"></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="67"></TD> <TD WIDTH="5"></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="9"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Merchandise inventory</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(10,687</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(13,410</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(8,903</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Receivables</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(4,911</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(913</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(2,611</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Prepaid and other</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(6,205</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,445</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1,578</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Receivables from officers</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">376</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Accounts payable</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">12,121</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(5,400</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1,657</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Unredeemed stored value cards and gift certificates</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4,331</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,669</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(286</FONT></TD> <TD WIDTH="9" ALIGN="left" VALIGN="bottom"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Accrued liabilities</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">30,348</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">11,751</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">10,962</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="19"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="9"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Total adjustments</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">42,252</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">5,703</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">6,631</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="19"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="9"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net cash provided by operating activities</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">132,912</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">59,821</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">26,168</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left" HEIGHT="18"> </TD> <TD WIDTH="18" HEIGHT="18"> </TD> <TD VALIGN="top" ALIGN="right" WIDTH="68" HEIGHT="18"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5" HEIGHT="18"></TD> <TD WIDTH="19" HEIGHT="18"> </TD> <TD VALIGN="top" ALIGN="right" WIDTH="67" HEIGHT="18"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5" HEIGHT="18"></TD> <TD WIDTH="18" HEIGHT="18"> </TD> <TD VALIGN="top" ALIGN="right" WIDTH="68" HEIGHT="18"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="9" HEIGHT="18"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Investing activities:</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="5"></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="67"></TD> <TD WIDTH="5"></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="9"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Capital expenditures</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(45,556</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(24,913</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(12,592</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Purchase of short-term investments</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(124,166</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(54,559</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Sale of short-term investments</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">38,775</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">41,199</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Investment in Prophecy, Ltd.</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="5"></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD WIDTH="5"></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(900</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"> </TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net cash used for investing activities</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(130,947</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(38,273</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(13,492</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"></TD> <TD WIDTH="19"> </TD> <TD VALIGN="top" ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"></TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="9"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Financing activities:</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="5"></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="67"></TD> <TD WIDTH="5"></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="68"></TD> <TD WIDTH="9"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net proceeds from stock options exercised </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,676</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,033</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,357</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="19"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="9"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net cash provided by financing activities</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,676</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,033</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,357</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="19"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="9"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net increase in cash and cash equivalents</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4,641</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">23,581</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">14,033</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Cash and cash equivalents —beginning of period </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">71,940</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">48,359</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">34,326</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="19"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD WIDTH="9"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Cash and cash equivalents —end of period</FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$76,581</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$71,940</FONT></TD> <TD WIDTH="5"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="18"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="68"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$48,359</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" ALIGN="left"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="19"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="67"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD WIDTH="5"> </TD> <TD WIDTH="18"> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="68"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD WIDTH="9"> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times">See Notes to Consolidated Financial Statements</FONT></DIV> <P></P> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> <B>AMERICAN EAGLE OUTFITTERS, INC.</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></DIV> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>YEAR ENDED JANUARY 29, 2000</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>1. Business Operations and Basis of Presentation</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">American Eagle Outfitters, Inc. (the "Company") is a specialty retailer of all-American casual apparel, accessories, and footwear for men and women between the ages of 16 and 34. The Company designs, markets, and sells its own brand of versatile, relaxed, and timeless classics like AE dungarees, khakis, and T-shirts, providing high quality merchandise at affordable prices. The Company operates retail stores located primarily in regional enclosed shopping malls principally in the Midwest, Northeast, and Southeast. The Consolidated Financial Statements include the accounts of the Company and its wholly-owned operating, royalty, investment, sourcing, and Mexican distribution subsidiaries. All inter-company transactions have been eliminated.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The following table sets forth the approximate percentage of net sales attributable to each merchandise group for each of the periods indicated:</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Mens apparel</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">39</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">40</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">41</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Womens apparel</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">53</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">52</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">50</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Footwear and accessories —men's and women's</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">8</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">8</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">9</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"> </TD> <TD> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" COLSPAN="2"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" COLSPAN="2"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" COLSPAN="2"> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Total</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"> </TD> <TD> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" COLSPAN="2"> <HR ALIGN="center" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" COLSPAN="2"> <HR ALIGN="center" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top" NOWRAP ALIGN="right" COLSPAN="2"> <HR ALIGN="center" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Effective May 4, 1997, the Company acquired the operations of Prophecy, Ltd. partnership ("Prophecy"), a New York-based production and sourcing company. Prior to the acquisition, the majority partner of Prophecy was a related party. The goals of the acquisition were to leverage the talent and expense of the Company's New York design office and to use Prophecy's production and sourcing expertise and manufacturing relationships to shorten product delivery cycles and enable the Company to improve product quality and value. The terms of the acquisition included a cash payment of $0.9 million at closing as well as the assumption of net liabilities of approximately $2.7 million. The acquisition was accounted for as a purchase; however, the assets acquired and the liabilities assumed have been recorded at historic carrying value because Prophecy was under common control with the Company. The premium in excess of Prophecy's book value was recorded as a reduction to equity. The results of operations of Prophecy are included in the accompanying Consolidated Financial Statements from the date of acquisition.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In Fiscal 1999, the Company formed Eagle Trading Company, a Mexican distribution subsidiary with operations near Mexico City, Mexico.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>2. Summary of Significant Accounting Policies</B></FONT></DIV> <DIV ALIGN="left"> <P></P> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Fiscal Year</I></FONT></P> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Company's financial year is a 52/53 week year that ends on the Saturday nearest to January 31. For tax purposes, the Company reports on a July year-end. As used herein, "Fiscal 1999," "Fiscal 1998" and "Fiscal 1997" refer to the twelve month periods ended January 29, 2000, January 30, 1999, and January 31, 1998, respectively.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Estimates</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances may result in revised estimates.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Recent Financial Accounting Standards Board Pronouncements</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">FASB 133,<I> Accounting for Derivative Instruments and Hedging Activities</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In 1998, the FASB issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," which establishes standards for the recognition and measurement of derivatives and hedging activities. This standard is effective for Fiscal 2000. The Company does not currently engage in these types of risk management or investment activities. Based upon current business practices, this statement is not anticipated to have any impact on the Company's financial statements.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Cash and Cash Equivalents</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Cash includes cash equivalents. The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Short-term investments and Other Comprehensive Loss</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Cash in excess of operating requirements is invested in marketable equity or government debt obligations. As of January 29, 2000, short-term investments included investments with an original maturity of greater than three months (averaging approximately 10 months) and consisted primarily of tax-exempt municipal bonds classified as available for sale and marketable equity securities. During the fourth quarter of Fiscal 1999, the Company recognized expense of $4.6 million related to a valuation adjustment of a marketable equity. This charge is included in investment income (expense) in the Consolidated Statements of Operations.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Merchandise Inventory</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Merchandise inventory is valued at the lower of average cost or market, utilizing the retail method. Average cost includes merchandise design and sourcing costs and related expenses.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Company reviews its inventory levels in order to identify slow-moving merchandise and generally uses markdowns to clear merchandise. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer preference, lack of consumer acceptance of fashion items, competition, or if it is determined that the inventory in stock will not sell at its currently ticketed price. Such markdowns may have an adverse impact on earnings, depending on the extent and amount of inventory affected.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Fixed Assets</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Fixed assets are recorded on the basis of cost with depreciation computed utilizing the straight-line method over the estimated useful lives. Estimated useful lives range from three to ten years. Depreciation expense is summarized as follows:</FONT></DIV> <P> </P> <P><FONT FACE="Times New Roman"> <B>(Dollars in thousands)</B></FONT></P> <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Depreciation expense</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 11,782</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 8,215</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 6,943</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <P><FONT FACE="Times New Roman">In accordance with FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-lived Assets to Be Disposed Of," impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. </FONT><P ALIGN="left"><FONT FACE="Times New Roman"><I>Intangible assets</I></FONT></P> <P><FONT FACE="Times New Roman">Intangible assets consist primarily of lease buyout costs and trademark costs. The lease buyout costs are amortized over the remaining life of the leases, generally for no greater than ten years. The trademark costs are amortized over five years. These assets, net of amortization, are included in other assets (long-term) on the Consolidated Balance Sheets. Details of intangible assets follow: </FONT></P> <P><FONT FACE="Times New Roman"> <B> (Dollars in thousands)</B></FONT></P> <TABLE WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="362"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="20"> </TH> <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="362"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="20"> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="16"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="16"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="362" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Intangible assets</FONT></TD> <TD WIDTH="20"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="56"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 3,899</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="55"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1,472</FONT></TD> <TD WIDTH="10"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="54"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1,016</FONT></TD> <TD WIDTH="14"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="362" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Less: accumulated amortization</FONT></TD> <TD WIDTH="20"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="56"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1,164</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="55"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(614</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="10"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="54"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(83</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="14"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD WIDTH="362"> </TD> <TD WIDTH="20"> </TD> <TD WIDTH="56"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="9"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="55"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="10"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="54"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="14"> </TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="362" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net intangible assets</FONT></TD> <TD WIDTH="20"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="56"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 2,735</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="55"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 858</FONT></TD> <TD WIDTH="10"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="54"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 933</FONT></TD> <TD WIDTH="14"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="362"> </TD> <TD WIDTH="20"> </TD> <TD VALIGN="top" WIDTH="56"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="9" VALIGN="top"> </TD> <TD WIDTH="16" VALIGN="top"> </TD> <TD WIDTH="55" VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="10" VALIGN="top"> </TD> <TD WIDTH="16" VALIGN="top"> </TD> <TD WIDTH="54" VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="14"> </TD> </TR> </TABLE> <P><P><FONT FACE="Times New Roman">Amortization expense related to these intangibles is summarized as follows:</FONT></P> <P><FONT FACE="Times New Roman"> <B> (Dollars in thousands)</B></FONT></P> <P> <TABLE WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Amortization expense</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 417</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 396</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 375</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <P><I><FONT FACE="Times New Roman">Stock Option Plan</FONT></I></P> <P><FONT FACE="Times New Roman">In October 1995, the FASB issued Statement No. 123, "Accounting for Stock-Based Compensation," which establishes financial accounting and reporting standards for stock-based employee compensation plans. The Company continues to account for its stock-based employee compensation plan using the intrinsic value method under Accounting Principles Board Opinion No. 25. See pro forma disclosures required under FASB Statement No. 123 in Note 10 of the Consolidated Financial Statements.</FONT></P> <P><I><FONT FACE="Times New Roman">Revenue Recognition</FONT></I></P> <P><FONT FACE="Times New Roman">Revenue is recorded upon purchase of merchandise by customers. In connection with stored value cards and gift certificates, a deferred revenue amount is established upon purchase of the card by the customer and revenue is recognized upon redemption and purchase of the merchandise.</FONT></P> <P></P> <P></P> <P><I><FONT FACE="Times New Roman">Advertising Costs </FONT></I></P> <P><FONT FACE="Times New Roman">Advertising costs are expensed as incurred. Advertising expense is summarized as follows: </FONT></P> <P><FONT FACE="Times New Roman"> <B> (Dollars in thousands)</B></FONT></P> <TABLE WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Advertising expense</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 27,243</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 16,431</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 10,067</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <P><I><FONT FACE="Times New Roman">Supplemental Disclosures of Cash Flow Information</FONT></I></P> <P><FONT FACE="Times New Roman"> <B>(Dollars in thousands)</B></FONT></P> <TABLE CELLSPACING=0 CELLPADDING=0 WIDTH="650"> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31 <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Cash paid during the periods for:</FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Income taxes</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$45,741</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$41,706</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$9,675</FONT></TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Interest</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ —</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ —</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ —</FONT></TD> </TR> </TABLE> <P><B><I><FONT FACE="Times New Roman">Earnings Per Share </FONT></I></B></P> <P><FONT FACE="Times New Roman">The following table shows the amounts used in computing earnings per share and the effect on income and the weighted average number of shares of dilutive potential common stock (stock options and restricted stock).</FONT></P> <P><FONT FACE="Times New Roman"><B>(In thousands)</B></FONT> </P> <TABLE WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"></FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net income</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 90,660</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 54,118</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 19,537</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Weighted average common shares outstanding:</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Basic shares</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">46,370</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">45,281</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">44,181</FONT></TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Dilutive effect of stock options and non-vested restricted stock</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,372</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,671</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,452</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Diluted shares</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">48,742</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">47,952</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">45,633</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD VALIGN="top"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <P><B><I><FONT FACE="Times New Roman">Reclassification</FONT></I></B></P> <P><FONT FACE="Times New Roman">Certain reclassifications have been made to the Consolidated Financial Statements for prior periods in order to conform to the Fiscal 1999 presentation.</FONT></P> <P></P> <P><B><FONT FACE="Times New Roman">3. Related Party Transactions</FONT></B></P> <P><FONT FACE="Times New Roman">The Company has various transactions with related parties. The nature of the relationship with each party is primarily common ownership. In September 1999, our distribution center facility, which is owned by a related party, was expanded to add 120,000 square feet which increases our capacity to handle distribution needs for future growth. As a result, the Company entered into an amended and restated operating lease for its corporate headquarters and distribution center with a related party. The lease, which commenced on September 1, 1999, and expires on December 31, 2020 provides for annual rental payments of approximately $2.0 million through 2000, $2.4 million through 2005, $2.6 million through 2015, and $2.7 million through the end of the lease.</FONT></P> <P><FONT FACE="Times New Roman">In addition, the Company and its subsidiaries sell merchandise to various related parties and use the services of a related importing company (See Note 12 of the Consolidated Financial Statements).</FONT></P> <P><FONT FACE="Times New Roman">The Company purchases merchandise from Azteca Production International ("Azteca"), a third party vendor, who because of significant beneficial ownership, was considered a related party in Fiscal 1997. Since Fiscal 1997, the beneficial ownership has been reduced and these purchases are not considered related party transactions. In Fiscal 1997, the Company purchased $31.5 million in merchandise from Azteca. As of January 31, 1998, accounts payable due Azteca was $1.9 million. These amounts are excluded from the table below.</FONT></P> <P><FONT FACE="Times New Roman">Related party amounts follow:</FONT></P> <P><FONT FACE="Times New Roman"> <B>(Dollars in thousands)</B></FONT></P> <P> <TABLE WIDTH="690" CELLPADDING="0" CELLSPACING="0" BORDER="0"> <TR> <TD WIDTH="418"></TD> <TD WIDTH="19"></TD> <TD WIDTH="57"></TD> <TD WIDTH="17"></TD> <TD WIDTH="65"></TD> <TD WIDTH="8"></TD> <TD WIDTH="8"></TD> <TD WIDTH="74"></TD> </TR> <TR> <TH VALIGN="TOP" WIDTH="418">  </TH> <TH COLSPAN="7" VALIGN="TOP"> <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">For the Years Ended</FONT> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="1"> </TH> </TR> <TR> <TH VALIGN="TOP" WIDTH="418">  </TH> <TH VALIGN="TOP" COLSPAN="2"> <P ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">January 29, </FONT><FONT FACE="Times New Roman" SIZE="2">2000</FONT> <HR NOSHADE ALIGN="center" WIDTH="96%" SIZE="1"> </TH> <TH VALIGN="TOP" COLSPAN="2"> <P ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">January 30, </FONT><FONT FACE="Times New Roman" SIZE="2">1999</FONT> <HR NOSHADE ALIGN="center" WIDTH="96%" SIZE="1"> </TH> <TH VALIGN="TOP" COLSPAN="3"> <P ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">January 31, </FONT><FONT FACE="Times New Roman" SIZE="2">1998</FONT> <HR NOSHADE ALIGN="center" WIDTH="96%" SIZE="1"> </TH> </TR> <TR> <TD VALIGN="TOP" WIDTH="418"> <P><FONT FACE="Times New Roman">Merchandise purchases through a related party importer</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="19"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="57"> <P ALIGN="right"><FONT FACE="Times New Roman">63,763</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="17"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="65"> <P ALIGN="right"><FONT FACE="Times New Roman">46,885</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="8"> </TD> <TD VALIGN="bottom" WIDTH="8"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="74"> <P ALIGN="right"><FONT FACE="Times New Roman">33,661</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="418"> <P><FONT FACE="Times New Roman">Accounts payable</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="19"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="57"> <P ALIGN="right"><FONT FACE="Times New Roman">682</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="17"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="65"> <P ALIGN="right"><FONT FACE="Times New Roman"> —</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="8"> </TD> <TD VALIGN="bottom" WIDTH="8"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="74"> <P ALIGN="right"><FONT FACE="Times New Roman">5,914</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="418"> <P><FONT FACE="Times New Roman">Accounts receivable</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="19"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="57"> <P ALIGN="right"><FONT FACE="Times New Roman">2,436</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="17"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="65"> <P ALIGN="right"><FONT FACE="Times New Roman">2,829</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="8"> </TD> <TD VALIGN="bottom" WIDTH="8"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="74"> <P ALIGN="right"><FONT FACE="Times New Roman">1,865</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="418"> <P><FONT FACE="Times New Roman">Rent expense</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="19"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="57"> <P ALIGN="right"><FONT FACE="Times New Roman">1,896</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="17"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="65"> <P ALIGN="right"><FONT FACE="Times New Roman">1,548</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="8"> </TD> <TD VALIGN="bottom" WIDTH="8"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="74"> <P ALIGN="right"><FONT FACE="Times New Roman">1,549</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="418"> <P><FONT FACE="Times New Roman">Merchandise sales</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="19"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="57"> <P ALIGN="right"><FONT FACE="Times New Roman">7,388</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="17"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="65"> <P ALIGN="right"><FONT FACE="Times New Roman">3,289</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="8"> </TD> <TD VALIGN="bottom" WIDTH="8"> <DIV ALIGN="right"><FONT FACE="Times New Roman">$</FONT></DIV> </TD> <TD VALIGN="bottom" WIDTH="74"> <P ALIGN="right"><FONT FACE="Times New Roman">8,669</FONT></P> </TD> </TR> </TABLE> <P><B><FONT FACE="Times New Roman">4. Accounts Receivable</FONT></B></P> <P><FONT FACE="Times New Roman">Accounts receivable is comprised of the following:</FONT></P> <P><FONT FACE="Times New Roman"> <B>(Dollars in thousands)</B></FONT></P> <P> <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0"> <TR> <TH VALIGN="TOP" WIDTH="288"> <P> </P> </TH> <TH VALIGN="TOP" WIDTH="18">  </TH> <TH VALIGN="TOP" WIDTH="84"> <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">January 29, </FONT><FONT FACE="Times New Roman" SIZE="2">2000</FONT> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="1"> </TH> <TH VALIGN="TOP" WIDTH="18">  </TH> <TH VALIGN="TOP" WIDTH="84"> <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2"> January 30, </FONT><FONT FACE="Times New Roman" SIZE="2">1999</FONT> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="1"> </TH> <TH VALIGN="TOP" WIDTH="24"> </TH> <TH VALIGN="TOP" WIDTH="90"> <P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="2">January 31, </FONT><FONT FACE="Times New Roman" SIZE="2">1998</FONT> <HR NOSHADE ALIGN="center" WIDTH="100%" SIZE="1"> </TH> </TR> <TR> <TD VALIGN="TOP" WIDTH="288" HEIGHT="18"> <P><FONT FACE="Times New Roman">Accounts receivable—construction allowances</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18" HEIGHT="18"> <P ALIGN="right"> </P> </TD> <TD VALIGN="bottom" WIDTH="84" HEIGHT="18"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 3,846</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18" HEIGHT="18"> <P ALIGN="right"> </P> </TD> <TD VALIGN="bottom" WIDTH="84" HEIGHT="18"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 4,008</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="24" HEIGHT="18"> <P ALIGN="right"> </P> </TD> <TD VALIGN="bottom" WIDTH="90" HEIGHT="18"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 1,518</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="288"> <P><FONT FACE="Times New Roman">Related party accounts receivable</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="84"> <P ALIGN="right"><FONT FACE="Times New Roman">2,436</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="84"> <P ALIGN="right"><FONT FACE="Times New Roman">2,829</FONT></P> </TD> <TD VALIGN="bottom" WIDTH="24"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="90"> <P ALIGN="right"><FONT FACE="Times New Roman">1,865</FONT></P> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="288"> <P><FONT FACE="Times New Roman">Accounts and note receivable—other</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="84"> <P ALIGN="right"><FONT FACE="Times New Roman">7,189</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" WIDTH="18"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="84"> <P ALIGN="right"><FONT FACE="Times New Roman">1,723</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> <TD VALIGN="bottom" WIDTH="24"> <DIV ALIGN="right">  </DIV> </TD> <TD VALIGN="bottom" WIDTH="90"> <P ALIGN="right"><FONT FACE="Times New Roman">4,264</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD> </TR> <TR> <TD VALIGN="TOP" WIDTH="288"> <P><FONT FACE="Times New Roman">Total</FONT></P> </TD> <TD VALIGN="TOP" WIDTH="18"> <P ALIGN="right"> </P> </TD> <TD VALIGN="bottom" WIDTH="84"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 13,471</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="bottom" WIDTH="18"> <P ALIGN="right"> </P> </TD> <TD VALIGN="bottom" WIDTH="84"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 8,560</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> <TD VALIGN="bottom" WIDTH="24"> <P ALIGN="right"> </P> </TD> <TD VALIGN="bottom" WIDTH="90"> <P ALIGN="right"><FONT FACE="Times New Roman">$ 7,647</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD> </TR> </TABLE> <P><B><FONT FACE="Times New Roman">5. Notes Payable</FONT></B></P> <P><FONT FACE="Times New Roman">The Company has an unsecured demand lending arrangement with a bank to provide a $100 million line of credit at either the lender's prime lending rate (8.50% at January 29, 2000) or a negotiated rate such as LIBOR. Because there were no borrowings during any of the past three years, there were no amounts paid for interest. The facility has a limit of $40 million to be used for direct borrowing. At January 29, 2000, letters of credit in the amount of $56.9 million were outstanding leaving a remaining available balance on the line of $43.1 million.</FONT></P> <P> </P> <P> <A NAME="TopOfPage"> </A> <FONT SIZE="2"></FONT> </P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>6. Impairment of Assets</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In accordance with FASB No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," management evaluates the ongoing value of leasehold improvements and store fixtures associated with retail stores which have been open longer than one year. There was no impairment expense recorded in Fiscal 1999. The expense included in selling, general and administrative expenses for Fiscal 1998 and Fiscal 1997 was $0.2 million and $1.7 million, respectively.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>7. Lease Commitments</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">All store operations are conducted from leased premises. These leases generally provide for base rentals and the payment of a percentage of sales as additional rent when sales exceed specified levels. Minimum rentals relating to these leases are recorded on a straight-line basis. In addition, the Company is typically responsible under its leases for common area maintenance charges, real estate taxes and certain other expenses. These leases are classified as operating leases.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Rent expense charged to operations, including amounts paid under short-term cancelable leases, was as follows:</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>(Dollars in thousands)</B></FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Minimum rentals</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 66,437</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 53,482</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 47,421</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Contingent rentals</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">10,736</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">6,177</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,725</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Total</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 77,173</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 59,659</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 49,146</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The table below summarizes future minimum lease obligations under operating leases in effect at January 29, 2000:</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>(In thousands)</B></FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="400" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Fiscal years:</FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B><FONT SIZE="2">Future <BR> Minimum <BR> Lease <BR> Obligations</FONT></B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TD VALIGN="bottom" WIDTH="548" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2000</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 54,483</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="548" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2001</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">51,083</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="548" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2002</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">48,851</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="548" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2003</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">48,058</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="548" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2004</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">43,238</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="548" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Thereafter</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">157,602</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="548" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Total</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$403,315</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="left" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Company may be contingently liable for the remaining rental payments that could total as much as $7.8 million for the outlet stores which were sold in October 1995. In January 2000, the company which owns the outlet stores sought protection under Chapter 11 of the Bankruptcy Act. Currently, there is insufficient information available to determine the amount of loss the Company may incur, if any, related to this potential contingent liability.</FONT></DIV> <P> </P> <DIV ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></DIV> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>8. Income Taxes</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The significant components of the Company's deferred tax assets (there are no deferred tax liabilities) were as follows:</FONT></DIV> <DIV> <P> </P> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>(Dollars in thousands)</B></FONT></P> </DIV> <TABLE ALIGN="center" WIDTH="600" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"></FONT></TH> <TH> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Current:</B></FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Inventories</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 4,048</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 2,826</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1,297</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Accrued rent</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4,055</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">3,375</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,545</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Salaries and compensation</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">3,565</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,274</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">743</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Marketable equity securities</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,530</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right">—</TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right">—</TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Other</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">386</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">724</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">216</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">13,584</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">8,199</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4,801</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Long Term:</B></FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Basis differences in fixed assets</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,410</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,200</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,790</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Other comprehensive loss</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,472</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Other</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">147</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">—</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">55</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TR> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4,029</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,200</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,845</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="411" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Total</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$17,613</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$10,399</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$7,646</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Significant components of the provision for income taxes are as follows:</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" CELLSPACING=0 CELLPADDING=0 WIDTH="600"> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="33"> </TH> <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B><FONT SIZE="2">For the Years Ended</FONT></B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>(Dollars in thousands)</B></FONT></TD> <TD WIDTH="33"> </TD> <TH VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2">January 29, <BR> 2000</FONT> </DIV> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH VALIGN="bottom" WIDTH="9"> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"> </FONT></DIV> </TH> <TH VALIGN="bottom" WIDTH="19"> <DIV ALIGN="center"><FONT SIZE="2"> </FONT></DIV> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2">January 30, <BR> 1999</FONT> </DIV> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH VALIGN="bottom" WIDTH="15"> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"> </FONT></DIV> </TH> <TH VALIGN="bottom" WIDTH="16"> <DIV ALIGN="center"><FONT SIZE="2"> </FONT></DIV> </TH> <TH VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2">January 31, <BR> 1998</FONT> </DIV> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TD WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203" HEIGHT="22"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Current:</B></FONT></TD> <TD WIDTH="33" HEIGHT="22"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="94" HEIGHT="22"></TD> <TD WIDTH="9" HEIGHT="22"></TD> <TD WIDTH="19" HEIGHT="22"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="95" HEIGHT="22"></TD> <TD WIDTH="15" HEIGHT="22"></TD> <TD WIDTH="16" HEIGHT="22"> </TD> <TD VALIGN="bottom" ALIGN="right" WIDTH="95" HEIGHT="22"></TD> <TD WIDTH="19" HEIGHT="22"></TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Federal</FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 54,684</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 31,819</FONT></TD> <TD WIDTH="15"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 12,366</FONT></TD> <TD WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> State</FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"><FONT COLOR="#000000" FACE="'Times New Roman', Times">10,806</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">6,305</FONT></TD> <TD WIDTH="15"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,250</FONT></TD> <TD WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="203"> </TD> <TD WIDTH="33"> </TD> <TD WIDTH="94"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="9"> </TD> <TD WIDTH="19"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="15"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="19"> </TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Total current</FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"><FONT COLOR="#000000" FACE="'Times New Roman', Times">65,490</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">38,124</FONT></TD> <TD WIDTH="15"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">14,616</FONT></TD> <TD WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="203"> </TD> <TD WIDTH="33"> </TD> <TD WIDTH="94"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="9"> </TD> <TD WIDTH="19"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="15"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="19"> </TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Deferred:</B></FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="94"></TD> <TD WIDTH="9"></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="95"></TD> <TD WIDTH="15"></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="95"></TD> <TD WIDTH="19"></TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Federal</FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(5,675</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(2,298</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="15"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1,733</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> State</FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1,121</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(455</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="15"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(142</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD WIDTH="203"> </TD> <TD WIDTH="33"> </TD> <TD WIDTH="94"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="9"> </TD> <TD WIDTH="19"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="15"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="19"> </TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Total deferred</FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(6,796</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(2,753</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="15"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1,875</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> </TR> <TR> <TD WIDTH="203"> </TD> <TD WIDTH="33"> </TD> <TD WIDTH="94"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="9"> </TD> <TD WIDTH="19"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="15"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="19"> </TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="203"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Provision for income taxes</FONT></TD> <TD WIDTH="33"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="94"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 58,694</FONT></TD> <TD WIDTH="9"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="19"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 35,371</FONT></TD> <TD WIDTH="15"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="95"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 12,741</FONT></TD> <TD WIDTH="19"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="203"> </TD> <TD WIDTH="33"> </TD> <TD WIDTH="94"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="9"> </TD> <TD WIDTH="19"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="15"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="95"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="19"> </TD> </TR> </TABLE> <DIV> </DIV> <P></P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">A tax benefit has been recognized as contributed capital, in the amount of $16.4 million for the year ended January 29, 2000, $2.3 million for the year ended January 30, 1999, and $0.3 million for the year ended January 31, 1998, resulting from additional tax deductions related to vested restricted stock grants and stock options exercised.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">A reconciliation between the statutory federal income tax and the effective tax rate follows:</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="329"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="16"> </TH> <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TR> <TH VALIGN="bottom" ALIGN="center" WIDTH="329"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH WIDTH="16"> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="16"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH WIDTH="16"><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="329" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Federal income tax rate</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">35</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="54"><FONT COLOR="#000000" FACE="'Times New Roman', Times">35</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="29"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">35</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="329" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">State income taxes, net of federal income tax effect</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4</FONT></TD> <TD WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="54"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4</FONT></TD> <TD WIDTH="29"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4</FONT></TD> <TD WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="329" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Other items, net</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">-</FONT></TD> <TD WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="54"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1</FONT></TD> <TD WIDTH="29"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1</FONT></TD> <TD WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD WIDTH="329"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="47"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="38"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="54"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="29"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="47"> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD WIDTH="38"> </TD> </TR> <TR> <TD VALIGN="bottom" ALIGN="left" WIDTH="329"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">39</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="54"><FONT COLOR="#000000" FACE="'Times New Roman', Times">40</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="29"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD WIDTH="16"> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="47"><FONT COLOR="#000000" FACE="'Times New Roman', Times">40</FONT></TD> <TD VALIGN="bottom" ALIGN="left" WIDTH="38"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD WIDTH="329"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="47"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="38"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="54"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="29"> </TD> <TD WIDTH="16"> </TD> <TD WIDTH="47"> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD WIDTH="38"> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>9. Profit Sharing Plan and Employee Stock Purchase Plan</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Company maintains a 401(k) retirement plan and contributory profit sharing plan. Full-time employees and part-time employees are automatically enrolled to contribute 1% of their salary if they worked at least 1,000 hours of service per year, attained twenty and one-half years of age, and have completed sixty days of service. Individuals can decline enrollment or can contribute up to 20% of their salary to the 401(k) plan on a pre-tax basis, subject to IRS limitations. After one year of service, the Company will match up to 3% of participants' eligible compensation. Contributions to the profit sharing plan, as determined by the Board of Directors, are discretionary, but generally may not exceed 15% of defined annual compensation paid to all participating employees. The Company recognized $2.0 million, $2.9 million, and $1.2 million in expense during Fiscal 1999, Fiscal 1998, and Fiscal 1997, respectively, in connection with these plans.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Employee Stock Purchase Plan covers employees who are at least 18 years old, have completed sixty days of service, and work at least 1,000 hours. Contributions are determined by the employee with a maximum of $1,560 annually with the Company matching 15% of the investment. These contributions are used to purchase shares of the Company stock in the open market.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>10. Stock Incentive Plan, Stock Option Plan, and Restricted Stock Agreements</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Stock Incentive Plan</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The 1999 Stock Incentive Plan (the "Plan") was approved by the shareholders on June 8, 1999. The Board of Directors authorized 4,000,000 shares for issuance under the Plan in the form of stock options, stock appreciation rights, restricted stock awards, performance units, or performance shares. Additionally, the Plan provides that the maximum number of shares awarded to one individual may not exceed 2,000,000 shares. The Plan allows the Compensation and Stock Option Committee to determine which employees and consultants will receive awards and the terms and conditions of these awards. The Plan provides for a grant of 15,000 stock options annually to directors who are not officers or employees of the Company. These options grant in quarterly increments, vest one year from date of grant, and are exercisable for a ten-year </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Stock Option Plan</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">On February 10, 1994, the Company's Board of Directors adopted the American Eagle Outfitters, Inc. 1994 Stock Option Plan (the "Plan"). The Plan provides for the grant of 2,700,000 incentive or non-qualified options to purchase common stock. On June 3, 1996, the Plan was amended to provide for the grant of an additional 1,350,000 shares for which options may be granted under the Plan. On May 7, 1997, the Plan was further amended to provide for the grant of an additional 1,350,000 shares for which options may be granted under the Plan. Additionally, the amendment provided that the maximum number of options which may be granted to one individual may not exceed 1,800,000 shares. All full-time employees and selected related party consultants to the Company are eligible to receive stock options which are approved by a committee of the Board of Directors. These options primarily vest over five years and are exercisable for a ten-year period from the date of grant. Directors who are not officers or employees of the Company were previously granted options for 11,250 shares of stock annually at fair value, which vest one year after the date of grant. On September 11, 1996, the Plan was amended to grant 4,500 options at fair value to the members of the Board of Directors who are not officers or employees of the Company on the first trading day of each fiscal quarter of the Company which vest one year after the date of grant and are exercisable for a ten-year period from the date of grant. This provision became effective for the third quarter of Fiscal 1996 but was superseded by the 1999 Stock Incentive Plan.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Company has elected to follow Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees" and related interpretations in accounting for its employee stock options. This election was made because, as discussed below, the alternative fair value accounting provided for under FASB Statement No. 123 ("FASB 123"), "Accounting for Stock-Based Compensation" requires the use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Pro forma information regarding net income and earnings per share is required by FASB 123, which also requires that the information be determined as if the Company has accounted for its employee stock options granted beginning in the fiscal year subsequent to December 31, 1994 under the fair value method of that Statement. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="615" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=10> </TD> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Fiscal <BR> 1997</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="457" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Risk-free interest rates</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">5.5</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">5.0</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">6.0</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="457" NOWRAP ALIGN="left"> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="457" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Dividend yield</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="457" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Volatility factors of the expected market price of the Company's common stock</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">.600</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">.678</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">.644</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="457" NOWRAP ALIGN="left"> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"> </TD> <TD> </TD> </TR> <TR> <TD VALIGN="bottom" WIDTH="457" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Weighted-average expected life</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">5 years</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">6 years</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">6 years</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> </TR> <TD COLSPAN=10> </TD> <TR> <TD VALIGN="bottom" WIDTH="457" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Expected forfeiture rate</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">10.0</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">12.0</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">13.0</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD> </TR> </TABLE> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.</FONT></P> <P> </P> <P> <A NAME="TopOfPage"> </A> <FONT SIZE="2"></FONT> </P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options'; vesting period. The Company's pro forma information follows:</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="600" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>(In thousands, except earnings per share)</B></FONT></TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7><FONT SIZE="2"> </FONT></TD> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"> </FONT></TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="397" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Pro forma net income</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="left"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$83,014</FONT></DIV> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="left"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$52,467</FONT></DIV> </TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="left"> <DIV ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$19,060</FONT></DIV> </TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="397" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Pro forma net income per share</FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" ALIGN="right"></TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="397" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Basic</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 1.79</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 1.16</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.43</FONT></TD> </TR> <TD COLSPAN=7> </TD> <TR> <TD VALIGN="bottom" WIDTH="397" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> Diluted</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 1.70</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 1.09</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.42</FONT></TD> </TR> </TABLE> <P> </P> <P> </P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">A summary of the Company's stock option activity under all plans follows:</FONT></DIV> <DIV> </DIV> <TABLE WIDTH="650" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=14 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>For the Years Ended</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=16> </TD> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=4 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, 2000 (2)</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=4 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, 1999 (2)</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=4 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 31, 1998 (2)</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=16> </TD> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TH> <TH> </TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Options</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Weighted- <BR> Average <BR> Exercise <BR> Price</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Options</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Weighted- <BR> Average <BR> Exercise <BR> Price</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Options</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Weighted <BR> -Average <BR> Exercise <BR> Price</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=16> </TD> <TR> <TD VALIGN="bottom" WIDTH="231" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Outstanding—beginning of year</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">3,526,430</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 5.21</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">3,356,238</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 2.11</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,843,552</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1.98</FONT></TD> </TR> <TD COLSPAN=16> </TD> <TR> <TD VALIGN="bottom" WIDTH="231" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Granted (Exercise Price equal to Fair Value)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">2,028,900</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$33.34</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,236,152</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$11.16</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,035,000</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$2.63</FONT></TD> </TR> <TD COLSPAN=16> </TD> <TR> <TD VALIGN="bottom" WIDTH="231" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Exercised (1)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(627,720</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 4.26</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(950,606</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 1.88</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(442,214</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$2.21</FONT></TD> </TR> <TD COLSPAN=16> </TD> <TR> <TD VALIGN="bottom" WIDTH="231" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Cancelled</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(73,580</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$22.82</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(115,354</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 6.19</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(80,100</FONT></TD> <TD VALIGN="bottom" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$2.27</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE> </TD> </TR> <TD COLSPAN=16> </TD> <TR> <TD VALIGN="bottom" WIDTH="231" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Outstanding—end of year (3)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">4,854,030</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$16.81</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">3,526,430</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 5.21</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">3,356,238</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$2.11</FONT></TD> </TR> <TR> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> <TD> </TD> <TD> </TD> <TD> <HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE> </TD> </TR> <TD COLSPAN=16> </TD> <TR> <TD VALIGN="bottom" WIDTH="231" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Exercisable—end of year (4)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">1,010,547</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 5.05</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">553,224</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 2.37</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">664,424</FONT></TD> <TD><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1.63</FONT></TD> </TR> <TD COLSPAN=16> </TD> <TR> <TD VALIGN="bottom" WIDTH="231" ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Weighted average fair value of options granted during the year</FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$20.69</FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 6.91</FONT></TD> <TD> </TD> <TD VALIGN="bottom" ALIGN="right"></TD> <TD></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$1.46</FONT></TD> </TR> </TABLE> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="4%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1) </FONT></DIV> </TD> <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Options exercised during Fiscal 1999 ranged in price from $1.39—$20.04 with an average of $4.26.</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="4%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(2) </FONT></DIV> </TD> <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">As of January 29, 2000, January 30,1999, and January 31, 1998, the Company had 2,332,372 shares, 287,472 shares and 1,408,276 shares available for grant, respectively.</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="4%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(3) </FONT></DIV> </TD> <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">As of January 29, 2000, the exercise price of 2,633,879 options outstanding ranged between $1.39 and $8.92 with weighted average remaining contractual lives between approximately 4 and 8 years. The exercise price of 1,880,751 options outstanding ranged between $17.69 and $34.19 with weighted average remaining contractual lives between approximately 8 and 10 years. The exercise price of 339,400 options outstanding ranged between $35.06 and $47.27 with weighted average remaining contractual lives between 9 and 10 years.</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="4%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(4) </FONT></DIV> </TD> <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">As of January 29, 2000, the exercise price of 876,797 options exercisable ranged between $1.39 and $8.92.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><I>Restricted Stock Grants</I></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The Company maintains a restricted stock plan for compensating certain employees and selected related party consultants. This plan was superseded by the 1999 Stock Incentive Plan. At January 29, 2000, 1,369,607 shares of restricted stock were granted at prices ranging from $3.56 to $35.09, with 1,157,538 shares vested. During Fiscal 1999, 112,669 shares of restricted stock were granted at $35.09.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">For Fiscal 1999, Fiscal 1998, and Fiscal 1997, the Company recorded $4.8 million, $1.3 million, and $1.2 million in compensation expense, respectively, on restricted stock and certain stock options granted during Fiscal 1996 where the exercise price is less than fair value of the underlying stock, and certain options granted to non-employees.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>11. Quarterly Financial Information—Unaudited</B></FONT></DIV> <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>(In thousands, except earnings per share)</B></FONT></TH> <TH><FONT SIZE="2"> </FONT></TH> <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>Quarters Ended (2)</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=9><FONT SIZE="2"> </FONT></TD> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"> </FONT></TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>May 1, <BR> 1999</B></FONT> </DIV> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>July 31, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>October 31, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 29, <BR> 2000</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="358" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net sales</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$145,404</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$178,582</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$222,693</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$285,425</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="358" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Gross profit</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">59,027</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">72,589</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">95,844</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">129,048</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="358" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Income before provision for income taxes</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">20,169</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">27,928</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">40,096</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">61,161</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="358" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net income</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">12,243</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">16,949</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">24,337</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">37,131</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="358" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Basic earnings per common share (1)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.27</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.36</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.52</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.80</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="358" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Diluted earnings per common share (1)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.25</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.35</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.50</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.76</FONT></TD> </TR> </TABLE> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"> </FONT></TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>May 2, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>August 1, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>October 31, <BR> 1998</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> <TH><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times" SIZE="2"><B>January 30, <BR> 1999</B></FONT> <HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE> </TH> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="350" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net sales</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 99,694</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 125,731</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$149,068</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 213,107</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="350" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Gross profit</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">37,217</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">49,063</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">60,420</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">87,811</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="350" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Income before provision for income taxes</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">9,561</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">15,738</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">22,685</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">41,505</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="350" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net income</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">5,805</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">9,553</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">13,871</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">24,889</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="350" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Basic earnings per common share (1)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.13</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.21</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.31</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.55</FONT></TD> </TR> <TD COLSPAN=9> </TD> <TR> <TD VALIGN="bottom" WIDTH="350" NOWRAP ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Diluted earnings per common share (1)</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.12</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.20</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.29</FONT></TD> <TD> </TD> <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT COLOR="#000000" FACE="'Times New Roman', Times">$ 0.52</FONT></TD> </TR> </TABLE> <DIV> </DIV> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="4%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(1)</FONT></DIV> </TD> <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Net income per share amounts have been restated to reflect the adoption of FASB 128, the three-for-two stock splits, and the two-for-one stock split.</FONT></DIV> </TD> </TR> </TABLE> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="4%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(2) </FONT></DIV> </TD> <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Quarters are presented in 13-week periods consistent with the Company's fiscal year discussed in Note 2 of the Consolidated Financial Statements.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>12. Subsequent Events</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Effective January 31, 2000, the Company acquired importing operations from Schottenstein Stores Corporation, a related party. The purpose of the acquisition was to integrate the expertise of the importing operation into the Company's supply chain process and to streamline and improve the efficiency of the process. The terms of the acquisition require a payment of $8.5 million to Schottenstein Stores Corporation which was made on March 6, 2000. The majority of the acquisition price will be recorded as goodwill and amortized on a straight-line basis over its anticipated useful life.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">On February 24, 2000, the Company authorized the repurchase of up to 2.5 million shares of its stock. The repurchase of shares will occur at the discretion of the Company.</FONT></DIV> <P></P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>Report of Independent Auditors</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">To the Board of Directors and Stockholders of <BR> American Eagle Outfitters, Inc.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We have audited the accompanying consolidated balance sheets of American Eagle Outfitters, Inc. as of January 29, 2000, January 30, 1999, and January 31, 1998 and the related consolidated statements of operations, stockholders' equity, and cash flows for the years then ended. The financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of American Eagle Outfitters, Inc. at January 29, 2000, January 30, 1999, and January 31, 1998, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Ernst & Young LLP</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Pittsburgh, Pennsylvania</FONT></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">February 24, 2000, except for Note 12, as to which the date is</FONT></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">March 6, 2000</FONT></DIV> <P> </P> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B> </B></FONT> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 9. </B></FONT></TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>CHAN</B></FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>GES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.</B></FONT> </TD> </TR> </TABLE> <P></P> </DIV> <DIV ALIGN="left"> <P></P> <P><FONT COLOR="#000000" FACE="'Times New Roman', Times">None.</FONT></P> </DIV> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>PART III</B></FONT></DIV> <DIV> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 10. </B></FONT></DIV> </TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%> <DIV><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.</B></FONT></DIV> <DIV> </DIV> </TD> </TR> </TABLE> <FONT COLOR="#000000" FACE="'Times New Roman', Times"><B> </B></FONT></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The information appearing under the captions "Nominees For Election As Directors", "Information Concerning Board of Directors" and "Executive Officers" in our Proxy Statement relating to the Annual Meeting of Stockholders to be held on June 12, 2000, is incorporated herein by reference.</FONT></DIV> <DIV> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 11. </B></FONT></DIV> </TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>EXECUTIVE COMPENSATION.</B></FONT></TD> </TR> </TABLE> <FONT COLOR="#000000" FACE="'Times New Roman', Times"><B> </B></FONT></DIV> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The information appearing in our Proxy Statement relating to the Annual Meeting of Stockholders to be held on June 12, 2000 under the captions "Executive Officer Compensation", "Option/SAR Grants in Last Fiscal Year", and "Aggregated Option Exercises and Fiscal Year-End Option Value" is incorporated herein by reference.</FONT></DIV> <DIV> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 12. </B></FONT></DIV> </TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%> <DIV><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.</B></FONT></DIV> <DIV> </DIV> </TD> </TR> </TABLE> <FONT COLOR="#000000" FACE="'Times New Roman', Times"><B> </B></FONT></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The information appearing under the caption "Security Ownership of Principal Stockholders and Management" in our Proxy Statement relating to the Annual Meeting of Stockholders to be held on June 12, 2000, is incorporated herein by reference<B>.</B></FONT></DIV> <DIV> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 13. </B></FONT></DIV> </TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%> <DIV><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.</B></FONT></DIV> <DIV> </DIV> </TD> </TR> </TABLE> <FONT COLOR="#000000" FACE="'Times New Roman', Times"><B> </B></FONT></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The information appearing under the caption "Certain Relationships and Related Transactions" in the Company's Proxy Statement relating to the Company's Annual Meeting of Stockholders to be held on June 12, 2000, is incorporated herein by reference.</FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>PART IV</B></FONT></DIV> <DIV> <TABLE WIDTH=100% BORDER=0 CELLPADDING=0 CELLSPACING=0> <TR VALIGN=TOP> <TD WIDTH=2% NOWRAP> <DIV></DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>ITEM 14.</B></FONT></DIV> </TD> <TD WIDTH=2%> </TD> <TD WIDTH=96%><FONT COLOR="#000000" FACE="'Times New Roman', Times"><B>EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.</B></FONT></TD> </TR> </TABLE> <FONT COLOR="#000000" FACE="'Times New Roman', Times"><B> </B></FONT> </DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0" HEIGHT="20"> <TR> <TD WIDTH="7%" ALIGN="left" VALIGN="top"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(a)(1)</FONT></TD> <TD ALIGN="left" WIDTH="93%" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">The following consolidated financial statements are included in Item 8:</FONT></DIV> </TD> </TR> </TABLE> <P></P> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="7%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" WIDTH="93%" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Consolidated Balance Sheets as of January 29, 2000, January 30, 1999, and January 31, 1998</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="7%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" WIDTH="93%" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Consolidated Statements of Operations for the years ended January 29, 2000, January 30, 1999, and January 31, 1998</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="7%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" WIDTH="93%" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Consolidated Statements of Stockholders' Equity for the years ended January 29, 2000, January 30, 1999, and January 31, 1998</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="7%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" WIDTH="93%" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Consolidated Statements of Cash Flows for the years ended January 29, 2000, January 30, 1999, and January 31, 1998</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="7%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" WIDTH="93%" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Notes to the Consolidated Financial Statements</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="7%" ALIGN="left" VALIGN="top"><FONT COLOR="#000000" FACE="'Times New Roman', Times">(a)(2) </FONT></TD> <TD ALIGN="left" WIDTH="93%" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">No financial statement schedules are supplied because of the absence of the conditions under which they are required.</FONT></DIV> </TD> </TR> </TABLE> </DIV> <P> </P> <P> </P> <P> </P> <P> </P> <P><FONT FACE="Times New Roman">(a)(3) Exhibits:</FONT></P> <P> <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0"> <TR> <TH HEIGHT="41"><FONT SIZE="2"> Exhibit <BR> No. </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TH> <TH HEIGHT="41"><FONT SIZE="2"></FONT></TH> <TH HEIGHT="41"><FONT SIZE="2"> Exhibit Index <BR> Page No. </FONT> <HR NOSHADE ALIGN="center" WIDTH="30%" SIZE="1"> </TH> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">2.1</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Plan of Reorganization and Merger Agreement, dated as of November 30, 1998, among Natco Industries, Inc., Thorn Hill Acquisition Corp., Natco Limited Liability Company and American Eagle Outfitters, Inc.</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Appendix A to the Prospectus included in the Registration Statement on Form S-4 (file no. 333-68609) filed December 9, 1998, as amended, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">3.1</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Second Amended and Restated Certificate of Incorporation, as amended.</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 3.1 to Registration Statement on Form S-4 (file no. 333-68609) filed December 9, 1999, as amended, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">3.2</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Amended and Restated Bylaws.</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 3.2 to Registration Statement on Form S-4 (file no. 333-68609) filed December 9, 1999, as amended, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">4.1</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">See Second Amended and Restated Articles of Incorporation, as amended, in Exhibit 3.1</FONT></P> </TD> <TD WIDTH="302"><FONT SIZE="2">  </FONT></TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">4.2</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">See Amended and Restated Bylaws in Exhibit 3.2</FONT></P> </TD> <TD WIDTH="302"><FONT SIZE="2">  </FONT></TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.1</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Restated and Amended Office/Distribution Center Lease dated September 10, 1999 between the Registrant and Linmar Realty Company.</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 10.1 to the Form 10-Q for the period ended October 30, 1999, filed November 24, 1999, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.2</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Form of Import Services Agreement.</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 10.2 to Registration Statement on Form S-1 (file no. 33-75294) filed February 14, 1994, as amended, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.3</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Form of the Registrant</FONT><FONT FACE="Courier New" SIZE="2">'</FONT><FONT FACE="Times New Roman" SIZE="2">s 1994 Stock Option Plan.</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 4(a) to Registration Statement on Form S-8 (file no. 33-79358) filed May 25, 1994, as amended on Form S-8 (file no. 33-12643) filed September 25, 1996 and incorporated herein by reference and Form S-8 (file no. 33-44759) filed January 22, 1998 and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.4</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Form of Restricted Stock Agreement</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 4(a) to Registration Statement on Form S-8 (file no. 33-79358) filed May 25, 1994 and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.5</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Form of Indemnification Agreement</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 10.7 to Registration Statement on Form S-1 (file no. 33-75294) filed February 14, 1994, as amended, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.6</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Merchandise Royalty Agreement</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 10.8 to Form 10-K for the year ended July 29, 1995, filed May 1, 1996, and incorporated herein by reference.</FONT></P> </TD> </TR> </TABLE> <P> <TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%"> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.7</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Employee Stock Purchase Plan</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 4(a) to Registration Statement on Form S-8 (file no. 33-33278), filed on April 5, 1996 and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.8</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Form of the Registrant's 1999 Stock Incentive Plan</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit A to the 1999 Proxy Statement, filed May 7, 1999, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.9</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Employment Agreement between the Registrant and Roger S. Markfield dated September 9, 1999.</FONT></P> </TD> <TD WIDTH="302"> <P><FONT FACE="Times New Roman" SIZE="2">Previously filed as Exhibit 10.4 to the Form 10-Q for the period ended October 30, 1999, filed November 24, 1999, and incorporated herein by reference.</FONT></P> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">10.10</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Purchase and Sale Agreement between Blue Star Imports, L.P. and Schottenstein Stores Corporation.</FONT></P> </TD> <TD WIDTH="302"><FONT SIZE="2">  </FONT></TD> </TR> <TR VALIGN="top"> <TD WIDTH="65" HEIGHT="30"> </TD> <TD WIDTH="301" HEIGHT="30"> </TD> <TD WIDTH="302" HEIGHT="30"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65" HEIGHT="30"> <FONT FACE="Times New Roman" SIZE="2">21</FONT> </TD> <TD WIDTH="301" HEIGHT="30"> <P><FONT FACE="Times New Roman" SIZE="2">Subsidiaries.</FONT></P> </TD> <TD WIDTH="302" HEIGHT="30"><FONT SIZE="2">  </FONT></TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">23</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Consent of Ernst & Young LLP.</FONT></P> </TD> <TD WIDTH="302"><FONT SIZE="2">  </FONT></TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">24</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Power of Attorney.</FONT></P> </TD> <TD WIDTH="302"><FONT SIZE="2">  </FONT></TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> </TD> <TD WIDTH="301"> </TD> <TD WIDTH="302"> </TD> </TR> <TR VALIGN="top"> <TD WIDTH="65"> <P><FONT FACE="Times New Roman" SIZE="2">27</FONT></P> </TD> <TD WIDTH="301"> <P><FONT FACE="Times New Roman" SIZE="2">Financial Data Schedule.</FONT></P> </TD> <TD WIDTH="302"><FONT SIZE="2">  </FONT></TD> </TR> </TABLE> <P> <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0" BORDER="0"> <TR> <TD WIDTH="34"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT> <FONT SIZE="2"> <BR> </FONT> </TD> <TD WIDTH="644"> <DIV ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Reports on Form 8-K <BR> </FONT></DIV> </TD> </TR> <TR> <TD WIDTH="34"> </TD> <TD WIDTH="644"> </TD> </TR> <TR> <TD WIDTH="34"> <DIV ALIGN="left"></DIV> </TD> <TD WIDTH="644"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">None.</FONT> <FONT SIZE="2"> <BR> </FONT></P> </TD> </TR> <TR> <TD WIDTH="34"> </TD> <TD WIDTH="644"> </TD> </TR> <TR> <TD WIDTH="34"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(c) <BR> </FONT></P> </TD> <TD WIDTH="644"> <DIV ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Exhibits <BR> </FONT></DIV> </TD> </TR> <TR> <TD WIDTH="34"> </TD> <TD WIDTH="644"> </TD> </TR> <TR> <TD WIDTH="34"> <DIV ALIGN="left"></DIV> </TD> <TD WIDTH="644"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">The exhibits to this report begin on page 18. <BR> </FONT></P> </TD> </TR> <TR> <TD WIDTH="34"> </TD> <TD WIDTH="644"> </TD> </TR> <TR> <TD WIDTH="34"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(d) <BR> </FONT> </TD> <TD WIDTH="644"> <DIV ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Financial Statement Schedules</FONT> <FONT SIZE="2"> <BR> </FONT></DIV> </TD> </TR> <TR> <TD WIDTH="34"> </TD> <TD WIDTH="644"> </TD> </TR> <TR> <TD WIDTH="34"> <DIV ALIGN="left"></DIV> </TD> <TD WIDTH="644"> <P ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">None</FONT> <FONT SIZE="2"> <BR> </FONT> </TD> </TR> </TABLE> <P> </P> </FONT> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> <B>SIGNATURES</B></FONT></DIV> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</FONT></DIV> <DIV> </DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">AMERICAN EAGLE OUTFITTERS, INC.</FONT></DIV> </TD> </TR> </TABLE> <DIV> </DIV> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="56%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" WIDTH="44%" VALIGN="top"> <DIV ALIGN="center"></DIV> </TD> </TR> </TABLE> <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD> <TD ALIGN="left" VALIGN="top"> <FONT COLOR="#000000" FACE="'Times New Roman', Times">By: /s/ Jay L. Schottenstein </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <DIV ALIGN="center"><FONT COLOR="#000000" FACE="'Times New Roman', Times"> </FONT><FONT COLOR="#000000" FACE="'Times New Roman', Times">Jay L. Schottenstein, Chairman</FONT><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT> </DIV> </TD> </TR> </TABLE> <DIV> </DIV> <DIV ALIGN="left"><FONT COLOR="#000000" FACE="'Times New Roman', Times">Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on April 12, 2000.</FONT></DIV> <DIV> </DIV> <TABLE ALIGN="center" WIDTH="666" CELLSPACING=0 CELLPADDING=0> <TR> <TH VALIGN="bottom" NOWRAP ALIGN="center" HEIGHT="16" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Signature</B></FONT></TH> <TH HEIGHT="16" WIDTH="13"><FONT SIZE="2"> </FONT></TH> <TH VALIGN="bottom" NOWRAP ALIGN="center" HEIGHT="16" WIDTH="351"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Title</B></FONT></TH> </TR> <TD COLSPAN=3><FONT SIZE="5"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Jay L. Schottenstein </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Jay L. Schottenstein <BR> (Principal Executive Officer)</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Chairman of the Board and Chief Executive Officer <BR> </FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ George Kolber </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> George Kolber</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Vice Chairman and Chief Operating Officer</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Roger S. Markfield</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Roger S. Markfield</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">President, Chief Merchandising Officer and Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Laura A. Weil </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Laura A. Weil</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Executive Vice President and Chief Financial Officer</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Dale E. Clifton </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Dale E. Clifton</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Vice President, Controller, and Chief Accounting Officer</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Saul Schottenstein</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Saul Schottenstein</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Vice Chairman</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Ari Deshe</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Ari Deshe</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Jon P. Diamond</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Jon P. Diamond</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Martin P. Doolan </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Martin P. Doolan</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Gilbert W. Harrison</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Gilbert W. Harrison</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Michael G. Jesselson</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Michael G. Jesselson</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Thomas R. Ketteler </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Thomas R. Ketteler</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ John L. Marakas</FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> John L. Marakas</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ David W. Thompson </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">David W. Thompson</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> <TD COLSPAN=3><FONT SIZE="2"> </FONT></TD> <TR> <TD VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="300"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/s/ Gerald E. Wedren </FONT> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Gerald E. Wedren</FONT></TD> <TD WIDTH="13"><FONT SIZE="1"> </FONT></TD> <TD VALIGN="bottom" WIDTH="351" NOWRAP ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Director</FONT></TD> </TR> </TABLE> <P></P> <DIV><FONT SIZE="1"></FONT></DIV> <TABLE WIDTH="50%" BORDER="0" CELLPADDING="0" CELLSPACING="0"> <TR> <TD WIDTH="25%" ALIGN="left" VALIGN="top"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> *By: <U> </U></FONT></TD> <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> /s/ Laura A. Weil<U> <HR SIZE=1 NOSHADE> </U> Laura A. Weil, Attorney-in-Fact<U> </U></FONT></DIV> </TD> </TR> </TABLE> <DIV ALIGN="left"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <U> </U></FONT></DIV> <DIV ALIGN="center"><FONT SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT></DIV> </BODY> </HTML>