DSW 2008 Annual Report Download - page 64

7. INVE
S
TMENT
S
T
he Compan
y
determines the appropriate balance sheet classification of its investments at the time of purchase
an
d
eva
l
uates t
h
ec
l
ass
ifi
cat
i
on at eac
hb
a
l
ance s
h
eet
d
ate. I
f
t
h
e Company
h
as t
h
e
i
ntent an
d
a
bili
ty to
h
o
ld
t
he
i
nvestments to matur
i
ty,
i
nvestments are c
l
ass
ifi
e
d
as
h
e
ld
-to-matur
i
ty. He
ld
-to-matur
i
ty secur
i
t
i
es are state
d
a
t
amortized cost
p
lus accrued interest. Otherwise, investments are classified as available-for-sale and stated at curren
t
m
ar
k
et
v
a
l
ue
.
Short-term investments, net at Januar
y
31, 2009 and Februar
y
2, 2008 include tax exempt bonds, tax
a
d
vantage
db
on
d
s, var
i
a
bl
e rate
d
eman
d
notes, tax exempt commerc
i
a
l
paper, cert
ifi
cates o
fd
epos
i
tan
d
auct
i
o
n
r
ate secur
i
t
i
es. Tax exempt commerc
i
a
l
paper an
d
cert
ifi
cates o
fd
epos
i
t mature every 28 to 91
d
ays. Exc
l
u
di
ng t
he
auction rate securities, the other t
y
pes of short-term investments
g
enerall
y
have interest reset dates of ever
y
7da
y
s
.
D
espite the long-term nature of the stated contractual maturities of the bonds, tax exempt commercial paper an
d
var
i
a
bl
e rate
d
eman
d
notes, t
h
e Company
h
as t
h
ea
bili
ty to qu
i
c
kl
y
li
qu
id
ate t
h
ese secur
i
t
i
es. As a resu
l
t, t
he
Compan
yh
as c
l
ass
ifi
e
d
t
h
ese secur
i
t
i
es as ava
il
a
bl
e
f
or sa
l
e.
I
nvestments
i
n auct
i
on rate secur
i
t
i
es typ
i
ca
ll
y auct
i
on every 91 to 182
d
ays. T
h
ere are two auct
i
on rate
s
ecur
i
t
i
es c
l
ass
ifi
e
d
as s
h
ort term
i
nvestments, net. One auct
i
on rate secur
i
t
y
w
ill
not un
d
er
g
o auct
i
on unt
il
November 2009 and was reclassified from long term investments, net to short term investments, net in fiscal 2008.
The Company recorded a temporary impairment of
$
0.7 million related to this security. The Company believes th
e
i
mpa
i
rment
i
s temporar
y
as t
h
e secur
i
t
yi
s a perpetua
l
pre
f
erre
d
secur
i
t
y
t
h
at possesses certa
i
n
d
e
b
t-
lik
ec
h
arac
-
t
eristics and the Compan
y
believes it has the abilit
y
to hold the securit
y
until it can recover in value. The second
auction rate security included in short-term investments, net experienced a call at par subsequent to year end and
th
ere was no unrea
li
ze
dl
oss recor
d
e
d
re
l
ate
d
to t
hi
s secur
i
ty.
T
he lon
g
-term investments, net balance at both Januar
y
31, 2009 and Februar
y
2, 2008 includes auction rate
s
ecur
i
t
i
es t
h
at
f
a
il
e
d
at auct
i
on su
b
sequent to Fe
b
ruary 2, 2008 an
d
are presente
d
as
l
ong-term as
i
t
i
sun
k
nown
if
t
he
Compan
y
will be able to liquidate these securities within one
y
ear. As a result, for fiscal 2008, the Compan
y
r
ecorded other-than-temporar
y
impairments of approximatel
y
$1.1 million related to these auction rate securities.
T
h
e Company
b
e
li
eves t
h
e
i
mpa
i
rments are ot
h
er-t
h
an-temporary
d
ue to current econom
i
c con
di
t
i
ons, t
h
e
fi
nanc
i
a
l
c
ondition and future business prospects of the underl
y
in
g
issuer and the duration of the impairments
.
Th
e
f
o
ll
ow
i
ng ta
bl
e
di
sc
l
oses t
h
ema
j
or categor
i
es o
f
t
h
e Company’s
i
nvestments as o
f
January 31, 2009 an
d
Februar
y
2, 2008
:
J
anuary
31,
2009
F
ebruary
2,
2008
January
31
,
2009
February
2
,
2008
S
hort-Term Investments, net Lon
g
-Term Investments, ne
t
(
In thousands
)
A
v
a
il
a
bl
e
f
or sa
l
e
:
T
ax exem
p
t bonds....................
$
6
4
,
82
9
T
ax advanta
g
ed bond
s
.................
1,000
V
ariable rate demand notes
.............
16,580 $44,50
5
T
ax exem
p
t commercial
p
a
p
e
r
...........
2
,
000
C
ert
ifi
cates o
fd
epos
it
.................
14,000
Auct
i
on rate secur
i
t
i
es
................
3,
650 25
,
500
$
2
,
400
$
12
,
50
0
Ot
h
er-t
h
an-temporary
i
mpa
i
rment
i
nc
l
u
d
e
d
i
n earn
i
ngs
.......................
(
1,134
)
U
nrea
li
ze
dl
osses
i
nc
l
u
d
e
di
n accumu
l
ate
d
ot
h
er compre
h
ens
i
ve
l
oss............
.
(
655
)
T
otal available for sal
e
.................
.
$
101
,
404
$
70
,
005
$
1
,
266
$
12
,
50
0
F-
18
D
S
W INC
.
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)