DSW 2010 Annual Report Download - page 40

Fiscal Year
We follow a 52/53-week fiscal year that ends on the Saturday nearest to January 31 in each year. Fiscal 2010,
2009 and 2008 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 2010, was extended
automatically for fiscal 2011 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. The tax separation agreement provides that DSW is exclusively responsible for
preparing any tax return with respect to Retail Ventures’ consolidated group or any combined group. For fiscal years
after fiscal 2007, DSW and Retail Ventures ceased reimbursing each other for the benefits or detriments derived
from combined and unitary state and local filing positions.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our cash and equivalents have maturities of 90 days or fewer. At times, cash and equivalents may be in excess
of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. We also have investments in various short-
term and long-term investments. Our available-for-sale investments generally renew every 7 days and we also have
held-to-maturity investments that have terms greater than 365 days. These financial instruments may be subject to
interest rate risk through lost income should interest rates increase during their term to maturity and thus may limit
our ability to invest in higher income investments.
As of January 29, 2011, there was no long-term debt outstanding. Future borrowings, if any, would bear interest
at rates in accordance with our credit facility and would be subject to interest rate risk. Because we have no
outstanding debt, we do not believe that a hypothetical adverse change of 1% in interest rates would have a material
effect on our financial position.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our financial statements and the Report of Independent Registered Public Accounting Firm thereon are filed
pursuant to this Item 8 and are included in this report beginning on page F-1.
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