DSW 2013 Annual Report Download - page 60

Table of Contents
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$11.0 million under the RVI Credit Facility on May 31, 2011. The consolidated statements of operations include interest expense of $0.1 million related to the
borrowings under the RVI Credit Facility. In fiscal 2011, DSW fully amortized the up-front commitment fee of $2.625 million.
Equity Investment- In fiscal 2009, DSW made an equity investment of $1.2 million in an entity in which the majority interest was held by a Schottenstein
Affiliate. DSW contributed $0.2 million in fiscal 2011 and received a return of capital of $0.2 million in fiscal 2010. In fiscal 2012, DSW received a return of
capital of $1.2 million when the investment was sold to a third party. The investment was accounted for under cost method accounting. There was no
statement of operations impact in fiscal 2013, 2012 or 2011 related to this investment.
Other- Purchases and services from related parties were $0.9 million, $1.3 million and $1.1 million in fiscal 2013, 2012 and 2011, respectively. In fiscal
2013 and 2012, $1.8 million and $0.2 million, respectively, were reimbursements to a Schottenstein Affiliate in connection with DSW's luxury test, which
were then primarily paid to unrelated vendors. Additionally in fiscal 2013, DSW paid a Schottenstein Affiliate approximately $0.4 million to modify the lease
related to its existing Sawmill store location in Dublin, Ohio. As a result, the deferred rent balance is in a long-term prepaid balance of $0.5 million.
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Earnings per Share- Basic earnings per share is based on net income and a simple weighted average of common shares outstanding. For periods prior to the
Merger, share count was determined by adjusting all historical RVI shares by the exchange ratio of 0.435. Diluted earnings per share reflects the potential
dilution of common shares adjusted, related to outstanding RVI stock options and stock appreciation rights ("SARs") (prior to the Merger), outstanding DSW
stock options, restricted stock units ("RSUs"), performance-based restricted stock units ("PSUs") (after the Merger) and warrants (through exercise date)
calculated using the treasury stock method. As PIES were exchangeable for DSW Class A Common Shares, they were included as potentially dilutive
instruments based on the DSW common share price, after the Merger and before the settlement. For all periods presented, where there was a loss in fair value
of warrants (prior to and after the Merger) and PIES (after the Merger), the loss was included in the calculation of the net income and the corresponding shares
were excluded from the diluted share count, if the effect was anti-dilutive.
The following is a reconciliation of the net income used in the calculation of diluted earnings per share computations for the periods presented for net income
from continuing operations, net of noncontrolling interests:
Fiscal years ended
February 1,
2014
February 2,
2013
January 28,
2012
(in thousands)
Net income from continuing operations, net of noncontrolling interests for basic earnings per share $ 151,302
$145,186
$179,643
Less: gain in fair value of PIES, net of tax effected interest expense, amortization of debt discount
and amortization of deferred financing fees —
—
(6,019)
Net income from continuing operations, net of noncontrolling interests for diluted earnings per
share $ 151,302
$145,186
$ 173,624
The following is a reconciliation of the net income used in the calculation of diluted earnings per share computations for the periods presented for net income,
net of noncontrolling interests:
Fiscal years ended
February 1,
2014
February 2,
2013
January 28,
2012
(in thousands)
Net income, net of noncontrolling interests for basic earnings per share $ 151,302
$ 146,439
$ 174,788
Less: gain in fair value of PIES, net of tax effected interest expense, amortization of debt discount
and amortization of deferred financing fees —
—
(6,019)
Net income, net of noncontrolling interests for diluted earnings per share $ 151,302
$ 146,439
$168,769
F- 17
Source: DSW Inc., 10-K, March 27, 2014 Powered by Morningstar® Document Research℠
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