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Table of Contents


The following is a reconciliation of the number of shares used in the calculation of diluted earnings per share computations for the periods presented:
Fiscal years ended
February 1,
2014
February 2,
2013
January 28,
2012
(in thousands)
Weighted average shares outstanding 90,472
88,846
70,440
Assumed exercise of dilutive DSW stock options 1,202
1,504
1,110
Assumed exercise of dilutive DSW RSUs 227
256
220
Assumed exercise of dilutive RVI stock options & SARs —
—
130
Assumed exercise of dilutive PIES —
—
2,376
Number of shares for computation of diluted earnings per share 91,901
90,606
74,276
Options and RSUs- For fiscal 2013, 2012 and 2011, the amount of potential shares that were not included in the computation of dilutive earnings per share
because the effect would be anti-dilutive was approximately 0.8 million, 0.6 million and 0.5 million, respectively.
PIES- For fiscal 2011, the assumed exercise of 2.4 million common shares that would convert upon redemption of the PIES were included in the calculation of
dilutive shares as the effect was dilutive. The total amount of common shares that would convert upon redemption of the PIES based on the average of DSW's
share prices was 7.7 million, but the assumed conversion was prorated as the PIES were only included in the calculation of earnings per share after the Merger.
Warrants- For fiscal 2012 and 2011, the assumed exercise of warrants for 0.2 million and 1.2 million common shares, respectively, were not included in the
calculation of shares as the effect would have been anti-dilutive. There were no warrants outstanding as of February 1, 2014.
Shareholders' Equity- On May 29, 2013, DSW announced that its Board of Directors had authorized DSW to extend the share repurchase program of up to
$100 million of DSW Common Shares. The share repurchase program may be suspended, modified or discontinued at any time, and DSW has no obligation
to repurchase any amount of its common shares under the program. In December 2013, DSW repurchased 38,333 Class A Common Shares at a cost of $1.6
million.
 
DSW Stock-Based Compensation Plan- The DSW 2005 Equity Incentive Plan (“the DSW Plan”) provides for the issuance of equity awards to purchase
up to 11.2 million DSW Common Shares (in connection with the two-for-one stock split, the number of awards authorized to be issued under the DSW Plan
increased from 7.6 million to 11.2 million). The DSW Plan covers stock options, RSUs, PSUs and director stock units. Eligible recipients include key
employees of DSW and affiliates, as well as directors of DSW. Options generally vest 20% per year on a cumulative basis. Options granted under the DSW
Plan generally remain exercisable for a period of ten years from the date of grant.
Stock Options- The majority of the DSW’s stock-based compensation awards are granted on an annual basis in the first quarter of each year. The risk-free
interest rate is based on the yield for U.S. Treasury securities with a remaining life equal to the expected term of the options at the grant date. Expected volatility
is based on the historical volatility of the DSW Common Shares. The expected term of options granted is derived from historical data on DSW stock option
exercises. The dividend yield assumption is based on DSW's expectation of future dividend payouts. DSW granted its first dividends in the third quarter of
fiscal 2011. Forfeitures of options are estimated at the grant date based on historical rates of DSW’s stock option activity and reduce the compensation expense
recognized.
F- 18
Source: DSW Inc., 10-K, March 27, 2014 Powered by Morningstar® Document Research℠
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