DSW 2009 Annual Report Download - page 60

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investments to maturity, investments are classified as held-to-maturity. Held-to-maturity securities are stated at
amortized cost plus accrued interest. Otherwise, investments are classified as available-for-sale.
Short-term investments classified as available-for-sale as of January 30, 2010 and January 31, 2009 include tax
exempt, tax advantaged and taxable bonds, variable rate demand notes, tax exempt commercial paper, certificates of
deposit and auction rate securities. The Company participates in the Certificate of Deposit Account Registry
Service»(“CDARS”), which provides FDIC insurance on deposits of up to $50.0 million. Certificates of deposit
mature every 7 to 84 days. The other types of short-term investments generally have interest reset dates of every 7 to
28 days. Despite the long-term nature of the stated contractual maturities of certain short-term investments, the
Company has the ability to liquidate these securities shortly after the interest rate reset dates. As a result, the
Company has classified these securities as available-for-sale.
In fiscal 2009, the Company received preferred shares as distributions-in-kind on two of its auction rate
securities. DSW sold these preferred shares during fiscal 2009 for realized gains of $0.5 million, excluding
other-than-temporary impairments previously recorded. For fiscal 2009, the Company recorded a full oth-
er-than-temporary impairment related to its auction rate security due to the unfavorable financial condition of
the underlying issuer.
The following table discloses the major categories of the Company’s investments as of the periods presented:
January 30,
2010
January 31,
2009
January 30,
2010
January 31,
2009
Short-Term Investments, Net Long-Term Investments, Net
(In thousands)
Available-for-sale:
Tax exempt, tax advantaged and taxable
bonds ......................... $124,107 $ 65,829
Variable rate demand notes ........... 16,580
Tax exempt commercial paper ......... 8,100 2,000
Certificates of deposit ............... 15,000 14,000
Auction rate securities ............... 3,650 $ 2,500 $ 2,400
Other-than-temporary impairment
included in earnings .............. (2,500) (1,134)
Unrealized losses included in
accumulated other comprehensive
loss ........................... (655)
Total available-for-sale investments . .... $147,207 $101,404 $ 0 $ 1,266
Held-to-maturity:
Tax exempt term notes .............. 17,058
Equity investment — related party ........ 1,151
Total investments .................... $164,265 $101,404 $ 1,151 $ 1,266
6. FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Therefore, fair value is a market-based
F-16
DSW INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)