DSW 2015 Annual Report Download - page 57

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Table of Contents



 Basic earnings per share is based on net income and a simple weighted average of common shares outstanding. Diluted earnings per
share reflects the potential dilution of common shares adjusted for outstanding stock options, restricted stock units ("RSUs") and performance-based restricted
stock units ("PSUs") calculated using the treasury stock method.
The following is a reconciliation of the number of shares used in the calculation of diluted earnings per share computations for the periods presented:
Fiscal
2015
2014
2013
(in thousands)
Weighted average shares outstanding 87,561
89,499
90,472
Assumed exercise of dilutive stock options 683
910
1,202
Assumed exercise of dilutive RSUs and PSUs 257
203
227
Number of shares for computation of diluted earnings per share 88,501
90,612
91,901
Options, RSUs and PSUs- For fiscal 2015, 2014 and 2013, the number of potential shares that were not included in the computation of dilutive earnings per
share because the effect would be anti-dilutive was approximately 1.9 million, 1.1 million and 0.8 million, respectively.
 On November 2, 2015, the Board of Directors approved an additional $200 million share repurchase program. The share repurchase
program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common shares under
the program. Shares will be repurchased in the open market at times and in amounts considered appropriate by the Company based on price and market
conditions. During fiscal 2015, the Company repurchased 7.2 million Class A Common Shares at a cost of $179.6 million. Through the life of the programs,
the Company has repurchased a total of 10.2 million Class A Common Shares at a cost of $266.5 million.
 
The DSW Inc. 2014 Long-Term Incentive Plan ("the 2014 Plan") provides for the issuance of equity awards to purchase up to 8.5 million DSW Common
Shares. The Company began issuing shares under the 2014 Plan after the DSW Inc. 2005 Equity Incentive Plan expired in the second quarter of fiscal 2015.
The 2014 Plan covers stock options, RSUs, PSUs, director stock units ("DSUs") and Stock Appreciation Rights ("SARs"). Eligible recipients include key
employees of DSW Inc. and affiliates, as well as directors. Options generally vest 20% per year on a cumulative basis. Options granted under the 2014 Plan
generally remain exercisable for a period of 10 years from the date of grant.
Stock-Based Compensation Expense- The following table summarizes stock-based compensation expense for the periods presented:
Fiscal
2015
2014
2013
(in thousands)
Stock Options $ 5,532
$ 5,827
$ 5,891
Restricted Stock Units 2,953
2,097
1,797
Performance-Based Restricted Stock Units 3,979
1,324
503
Director Stock Units 1,037
1,247
1,151
Total $ 13,501
$ 10,495
$ 9,342
Stock Options- The majority of the stock-based compensation awards are granted on an annual basis in the first quarter of each year. The risk-free interest rate
is based on the yield for U.S. Treasury securities for the expected term of the options at the grant date. Expected volatility is based on the historical volatility
of the DSW Inc. Common Shares. The expected term of options granted is derived from historical data on DSW Inc.'s stock option exercises. The dividend
yield assumption is based on DSW
F- 18
Source: DSW Inc., 10-K, March 24, 2016 Powered by Morningstar® Document Research℠
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except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.