DSW 2012 Annual Report Download - page 17

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14
unrelated entities. Most of the DSW store leases provide for a minimum annual rent plus a percentage of gross sales over
specified breakpoints and are for a fixed term with options for three to five extension periods, each of which is for a period of
four or five years, exercisable at our option. The lease for our fulfillment center expires in September 2017 and has two renewal
options with terms of five years each. Our primary distribution facility, our corporate office headquarters and our dsw.com
fulfillment center are located in Columbus, Ohio.
ITEM 3. LEGAL PROCEEDINGS.
Guarantee of Union Square lease- RVI guaranteed Filene’s Basement’s obligations for the Union Square location when RVI
owned Filene’s Basement. In February 2012, the landlord at the Union Square location brought a lawsuit against Merger Sub in
the Supreme Court of the State of New York seeking payment under the guarantee. A third party has entered into a lease for this
location, but the landlord has asserted that DSW is responsible for rent and certain costs while the space is unoccupied. We
believe that the guarantee may not be enforceable and/or that the amount of liability under the guarantee may be limited. We
will continue to monitor our potential liability regarding this lease obligation.
Guarantee of Bergen, NJ lease- RVI guaranteed Filene’s Basement’s obligations for the Bergen location when RVI owned
Filene’s Basement. In July 2012, the landlord at the Bergen, NJ location brought a lawsuit against Merger Sub in the Supreme
Court of the State of New Jersey seeking payment under the guarantee. A third party is operating in a portion of the space
leased by Filene’s Basement, but the landlord has asserted that DSW is responsible for rent and certain costs. We believe that
the guarantee may not be enforceable and/or that the amount of liability under the guarantee may be limited. We will continue
to monitor our potential liability regarding this lease obligation.
Other legal proceedings- Other than the proceedings noted above, we are involved in various legal proceedings that are
incidental to the conduct of our business. We estimate the range of liability related to pending litigation where the amount of the
range of loss can be estimated. We record our best estimate of a loss when the loss is considered probable. When a liability is
probable and there is a range of estimated loss, we record the most likely estimated liability related to the claim. Although it is
not possible to predict with certainty the eventual outcome of any litigation, in the opinion of management, the amount of any
potential liability with respect to these proceedings will not be material to our results of operations or financial condition.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
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