DSW 2009 Annual Report Download - page 29

Fiscal Year
We follow a 52/53-week fiscal year that ends on the Saturday nearest to January 31 in each year. Fiscal 2009,
2008 and 2007 each consisted of 52 weeks.
Separation Agreements
In connection with the completion of our initial public offering in July 2005, we entered into several
agreements with Retail Ventures in connection with the separation of our business from the Retail Ventures group.
After the transfer of shared services in fiscal 2008, we amended the shared services agreement and the tax
separation agreement.
Master Separation Agreement. The master separation agreement contains key provisions relating to the
separation of our business from Retail Ventures. The master separation agreement requires us to exchange
information with Retail Ventures, follow certain accounting practices and resolve disputes with Retail Ventures
in a particular manner. We also have agreed to maintain the confidentiality of certain information and preserve
available legal privileges. The separation agreement also contains provisions relating to the allocation of the costs of
our initial public offering, indemnification, non-solicitation of employees and employee benefit matters.
Under the master separation agreement, we agreed to effect up to one demand registration per calendar year of
our Common Shares, whether Class A or Class B, held by Retail Ventures, if requested by Retail Ventures. We have
also granted Retail Ventures the right to include its Common Shares of DSW in an unlimited number of other
registrations of such shares initiated by us or on behalf of our other shareholders.
Amended and Restated Shared Services Agreement. Effective March 17, 2008, we entered into an Amended
and Restated Shared Services Agreement with RVI and its subsidiaries. Pursuant to the terms of the Amended and
Restated Shared Services Agreement, DSW provides RVI and its subsidiaries with key services relating to risk
management, tax, financial services, benefits administration, payroll and information technology. The current term
of the Amended and Restated Shared Services Agreement expired at the end of fiscal 2009, was extended
automatically for fiscal 2010 and will be extended automatically for additional one-year terms unless terminated by
one of the parties. With respect to each shared service, we cannot reasonably anticipate whether the services will be
shared for a period shorter or longer than the initial term.
Tax Separation Agreement. Until the completion of our initial public offering in July 2005, we were
historically included in Retail Ventures’ consolidated group, or the Consolidated Group, for U.S. federal income tax
purposes as well as in certain consolidated, combined or unitary groups which include Retail Ventures and/or
certain of its subsidiaries, or a Combined Group, for state and local income tax purposes. We entered into a tax
separation agreement with Retail Ventures that became effective upon consummation of our initial public offering
and amended this agreement effective March 17, 2008. Pursuant to the tax separation agreement, we and Retail
Ventures generally make payments to each other such that, with respect to tax returns for any taxable period in
which we or any of our subsidiaries are included in the Consolidated Group or any Combined Group, the amount of
taxes to be paid by us will be determined, subject to certain adjustments, as if we and each of our subsidiaries
included in the Consolidated Group or Combined Group filed our own consolidated, combined or unitary tax return.
DSW will prepare pro forma tax returns for RVI with respect to any tax return filed with respect to the Consolidated
Group or any Combined Group in order to determine the amount of tax separation payments under the tax
separation agreement. RVI has the right to review and comment on such pro forma tax returns. We are responsible
for any taxes with respect to tax returns that include only us and our subsidiaries.
Effective March 17, 2008, DSW is exclusively responsible for preparing any tax return with respect to the
Consolidated Group or any Combined Group. Retail Ventures continues to be responsible for filing any tax return
with respect to the Consolidated Group. We continue to be responsible for preparing and filing any tax returns that
include only us and our subsidiaries. For the tax services provided to RVI by us, RVI pays a monthly fee equal to its
respective share of all costs associated with the maintenance and operation of DSW’s tax department (including all
overhead expenses). In addition, RVI reimburses DSW for 100% of any third party fees and expenses incurred by
DSW’s tax department in connection with the performance of the tax services that are solely incurred for RVI.
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