DSW 2009 Annual Report Download - page 56

$6.4 million and $18.5 million, respectively. The reduction in the charges was a result of RVI’s disposition of
Filene’s Basement in fiscal 2009 and Value City Department Stores (“Value City”) in late fiscal 2007. In fiscal 2009,
RVI charged DSW for a reimbursement of $0.5 million related to the depreciation of an office facility leased by
RVI, which is the only remaining charge from RVI to DSW. Prior to the Amended and Restated Shared Services
Agreement in March 2008, DSW received various services provided by RVI, including import administration, risk
management, human resources, information technology, tax, financial services and payroll, as well as other
corporate services. In fiscal 2008 and 2007, RVI charged DSW $4.7 million and $9.2 million, respectively, for
shared services, management fees and depreciation related to an office facility. These cost allocations were
determined on a basis that the Company and RVI consider to be reasonable reflections of the use of services
provided or the benefit received to the Company. These shared service expenses and income were included in
operating expenses.
In April 2009, Retail Ventures disposed of its Filene’s Basement subsidiary. As a result of this disposal,
Filene’s Basement is no longer a related party, and accounts receivable and accounts payable are no longer related
party balances. Accounts receivable from Filene’s Basement of $1.8 million was included in the net related party
payable as of January 31, 2009.
Accounts payable to RVI were $1.0 million and $3.4 million as of January 30, 2010 and January 31, 2009,
respectively. Accounts payable to RVI were primarily related to usage of RVI’s net operating losses prior to fiscal
2007 under the Tax Separation Agreement and shared services. In fiscal 2009, accounts payable were reduced by
DSW’s recovery of $1.8 million related to impairment of certain shared service assets as allowed under the
Amended and Restated Shared Service Agreement and by $0.5 million related to RVI’s reimbursement of certain
DSW leasehold improvement expenditures.
RVI contributed tax benefits to DSW in fiscal 2009 and 2008 resulting in non-cash capital contributions of
$4.7 million and $0.8 million, respectively.
On January 15, 2010, the Company entered into a share purchase agreement with RVI, pursuant to which RVI
sold to DSW 320,000 Class B Common Shares, without par value, of DSW, for an aggregate amount of $8.0 million.
Schottenstein Stores Corporation (“SSC”) — SSC and its affiliates are the majority shareholders of RVI. The
Company leases certain store, office space and distribution center locations owned by entities affiliated with SSC, as
described in Note 4. Accounts receivable from and payable to related parties principally result from commercial
transactions with entities owned or affiliated with SSC or transactions with SSC and normally settle in the form of
cash in 30 to 60 days. These related party balances as of January 30, 2010 and January 31, 2009, were related party
receivables of $0.1 million and $0.3 million, respectively, and related party payables of $0.5 million and
$0.7 million, respectively.
In fiscal 2009, DSW made an equity investment of $1.2 million, and the majority interest is held by an affiliate
of SSC.
Other — Purchases from related parties were $0.2 million and $0.1 million in fiscal 2009 and 2008,
respectively. There were no purchases from related parties in fiscal 2007.
3. STOCK-BASED COMPENSATION
The Company has a 2005 Equity Incentive Plan (“the Plan”) that provides for the issuance of equity awards to
purchase up to 7.6 million common shares. The Plan covers stock options, restricted stock units and director stock
units. Eligible recipients include key employees of the Company and affiliates, as well as directors of the Company.
Options generally vest 20% per year on a cumulative basis. Options granted under the Plan generally remain
exercisable for a period of ten years from the date of grant. Prior to fiscal 2005, the Company did not have a stock
option plan or any equity units outstanding.
F-12
DSW INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)