DSW 2013 Annual Report Download - page 65

Table of Contents
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Common Shares adjusted for the exchange ratio of 0.435. Immediately after the Merger, DSW paid $7.0 million related to the settlement of these options and
SARs, which was treated as a reduction of additional paid in capital, and converted the remaining RVI options to options exercisable for DSW Class A
Common Shares. DSW recorded additional stock-based compensation expense of $0.3 million related to the cash settled options and SARs as the fair value the
recipient received was greater than the option they held. The converted options are included in the DSW Plan section above. The RVI stock-based compensation
instruments were adjusted retrospectively for the conversion ratio. Excluding the converted options, the DSW Plan was otherwise not affected as a result of the
Merger.
Excluding any expense related to the Merger, RVI expensed $0.1 million in fiscal 2011 related to stock options. RVI expensed less than $0.1 million in fiscal
2011 related to RVI SARs. RVI expensed $0.1 million in fiscal 2011 related to RVI restricted shares. These restricted shares were settled in the first quarter of
fiscal 2011.
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The majority of DSW’s available-for-sale investments are primarily municipal bonds with renewal dates of every 7 days. Held-to-maturity investments are
primarily corporate bonds, municipal bonds and municipal term notes and are held at amortized cost, which approximates fair value. Long-term investments
have maturities longer than one year but shorter than three years and are classified as held-to-maturity. The following table discloses the major categories of
DSW’s investments as of the periods presented:
Short-term investments
Long-term investments
February 1, 2014
February 2, 2013
February 1, 2014
February 2, 2013
(in thousands)
Available-for-sale:
Bonds $ 22,050
$24,280
—
—
Total available-for-sale investments 22,050
24,280
—
—
Held-to-maturity:
Term notes and bonds 202,048
207,801
$243,188
$96,712
Total investments $ 224,098
$232,081
$243,188
$96,712
As of both February 1, 2014 and February 2, 2013, short-term investments had gross holding gains of $0.2 million, and as of February 1, 2014 and
February 2, 2013, gross holding losses of $0.1 million and $0.2 million, respectively. As of February 1, 2014 and February 2, 2013, long-term investments
had gross holding gains of $0.6 million and $0.3 million, respectively, and as of February 1, 2014 and February 2, 2013, gross holding losses of $0.4
million and $0.1 million, respectively.
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Financial Assets and Liabilities- The following table presents financial assets and liabilities at fair value as of the periods presented:
February 1, 2014
February 2, 2013
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
(in thousands)
Assets:
Cash and equivalents(a) $112,021
$112,021
—
—
$81,097
$81,097
—
—
Short-term investments(b) 224,167
—
$224,167
—
232,052
—
$ 232,052
—
Long-term investments(b) 243,373
—
243,373
—
96,843
—
96,843
—
$579,561
$112,021
$ 467,540
—
$409,992
$81,097
$328,895
—
(a) Cash and equivalents primarily represent cash deposits and investments in money market funds held with financial institutions, as well as credit
card receivables that generally settle within three days. The carrying amount approximates fair value because of the relatively short average maturity of
the instruments.
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Source: DSW Inc., 10-K, March 27, 2014 Powered by Morningstar® Document Research℠
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