|
Delaware
|
|
26-2590893
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
1 HSN Drive, St. Petersburg, Florida
|
33729
|
|
(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
|
Name of exchange on which registered
|
Common Stock, par value $0.01
Series A Junior Participating
Preferred Stock Purchase Rights
|
|
NASDAQ Global Select Market
NASDAQ Global Select Market
|
|
|
Large accelerated filer
|
|
x
|
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Accelerated filer
|
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
|
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¨
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Page
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PART I
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ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 1B.
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
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PART II
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|
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ITEM 5.
|
||
ITEM 6.
|
||
ITEM 7.
|
||
ITEM 7A.
|
||
ITEM 8.
|
||
ITEM 9.
|
||
ITEM 9A.
|
||
ITEM 9B.
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||
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PART III
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ITEM 10.
|
||
ITEM 11.
|
||
ITEM 12.
|
||
ITEM 13.
|
||
ITEM 14.
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||
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PART IV
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ITEM 15.
|
•
|
the influence of the macroeconomic environment and its impact on consumer confidence and spending levels;
|
•
|
changes in our relationships with pay television operators, vendors, manufacturers and other third parties;
|
•
|
changes in product shipping promotions or delivery costs particularly if we are unable to offset them;
|
•
|
any technological or regulatory developments that could negatively impact the way we do business, including developments requiring us to collect and remit state and local sales and use taxes;
|
•
|
risks associated with possible systems failures and/or security breaches, including, any security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or company information, or the failure to comply with various laws applicable to HSNi in the event of such a breach;
|
•
|
HSNi’s business prospects and strategy, including whether HSNi’s initiatives will be effective; and
|
•
|
our ability to offer new or alternative products and services through various platforms in a cost effective manner and consumer acceptance of these products and services;
|
•
|
risks associated with acquisitions including the ability to successfully integrate new businesses and achieve expected benefits and results;
|
•
|
the loss of any key member of our senior management team.
|
ITEM 1.
|
BUSINESS
|
•
|
The Federal Trade Commission’s regulations related to the sale of products and/or commercial contacts with our customers or potential customers, such as the Telemarketing Sales Rule and Do Not Call;
|
•
|
The Food and Drug Administration’s regulations regarding marketing claims that can be made about cosmetic beauty products and over-the-counter drugs, which include products for treating acne or medical products, and claims that can be made about food products;
|
•
|
Regulations related to product safety issues and product recalls including, but not limited to, the Consumer Product Safety Act, the Consumer Product Safety Improvement Act of 2008, the Federal Hazardous Substance Act, the Flammable Fabrics Act and regulations promulgated pursuant to these acts; and
|
•
|
Various state laws, regulations and interpretations regarding the obligations of retailers with respect to the collection of sales tax on internet sales.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
require a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness;
|
•
|
limit our ability to use cash flow or obtain additional financing for future working capital, capital expenditures or other general corporate purposes;
|
•
|
increase our vulnerability to general economic and industry conditions; or
|
•
|
expose us to the risk of increased interest rates for that portion of our borrowings under our credit facilities that are at variable interest rates.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
Sales Price
|
|
|
||||||||
Fiscal 2013
|
|
High
|
|
Low
|
|
Dividends
|
||||||
Fourth Quarter
|
|
$
|
63.54
|
|
|
$
|
50.03
|
|
|
$
|
0.25
|
|
Third Quarter
|
|
$
|
65.00
|
|
|
$
|
52.79
|
|
|
$
|
0.18
|
|
Second Quarter
|
|
$
|
58.56
|
|
|
$
|
50.76
|
|
|
$
|
0.18
|
|
First Quarter
|
|
$
|
60.87
|
|
|
$
|
49.14
|
|
|
$
|
0.18
|
|
Fiscal 2012
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
55.97
|
|
|
$
|
47.47
|
|
|
$
|
0.18
|
|
Third Quarter
|
|
$
|
49.71
|
|
|
$
|
39.67
|
|
|
$
|
0.125
|
|
Second Quarter
|
|
$
|
41.73
|
|
|
$
|
35.74
|
|
|
$
|
0.125
|
|
First Quarter
|
|
$
|
38.79
|
|
|
$
|
34.74
|
|
|
$
|
0.125
|
|
Period
|
|
Number of
Shares Purchased
|
|
Average Price
Paid Per Share
|
|
Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number
of Shares that May
Yet Be Purchased
under the Plans or
Programs
|
|||||
October 1, 2013 - October 31, 2013
|
|
168,313
|
|
|
$
|
51.96
|
|
|
168,313
|
|
|
1,032,446
|
|
November 1, 2013 - November 30, 2013
|
|
21,500
|
|
|
$
|
52.29
|
|
|
21,500
|
|
|
1,010,946
|
|
December 1, 2013 - December 31, 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,010,946
|
|
|
|
189,813
|
|
|
|
|
189,813
|
|
|
|
|
|
12/31/2008
|
|
12/31/2009
|
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
||||||
HSN, Inc.
|
|
100.00
|
|
|
277.72
|
|
|
421.60
|
|
|
500.51
|
|
|
770.13
|
|
|
883.59
|
|
S&P 500 Retailing Index
|
|
100.00
|
|
|
154.37
|
|
|
197.92
|
|
|
211.12
|
|
|
270.86
|
|
|
397.30
|
|
Russell 2000 Index
|
|
100.00
|
|
|
127.17
|
|
|
161.32
|
|
|
154.59
|
|
|
179.86
|
|
|
249.69
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
3,403,983
|
|
|
$
|
3,266,739
|
|
|
$
|
3,069,356
|
|
|
$
|
2,884,308
|
|
|
$
|
2,635,959
|
|
Operating income
|
|
282,654
|
|
|
258,744
|
|
|
239,042
|
|
|
198,803
|
|
|
163,540
|
|
|||||
Income from continuing operations
|
|
178,449
|
|
|
136,497
|
|
|
127,652
|
|
|
100,441
|
|
|
77,309
|
|
|||||
Net income (1)
|
|
178,449
|
|
|
130,675
|
|
|
123,070
|
|
|
98,523
|
|
|
72,488
|
|
|||||
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
3.33
|
|
|
$
|
2.42
|
|
|
$
|
2.18
|
|
|
$
|
1.75
|
|
|
$
|
1.37
|
|
Diluted
|
|
$
|
3.25
|
|
|
$
|
2.36
|
|
|
$
|
2.10
|
|
|
$
|
1.69
|
|
|
$
|
1.35
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
3.33
|
|
|
$
|
2.32
|
|
|
$
|
2.10
|
|
|
$
|
1.72
|
|
|
$
|
1.29
|
|
Diluted
|
|
$
|
3.25
|
|
|
$
|
2.25
|
|
|
$
|
2.03
|
|
|
$
|
1.65
|
|
|
$
|
1.26
|
|
Shares used in computing earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
53,640
|
|
|
56,314
|
|
|
58,636
|
|
|
57,414
|
|
|
56,383
|
|
|||||
Diluted
|
|
54,857
|
|
|
57,956
|
|
|
60,689
|
|
|
59,546
|
|
|
57,330
|
|
|||||
Dividends declared per common share
|
|
$
|
0.79
|
|
|
$
|
0.555
|
|
|
$
|
0.125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (end of period):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
|
$
|
391,147
|
|
|
$
|
384,868
|
|
|
$
|
505,901
|
|
|
$
|
451,406
|
|
|
$
|
332,964
|
|
Total assets
|
|
1,337,923
|
|
|
1,331,952
|
|
|
1,394,973
|
|
|
1,345,743
|
|
|
1,218,650
|
|
|||||
Total debt, including current maturities
|
|
240,625
|
|
|
250,000
|
|
|
239,111
|
|
|
308,758
|
|
|
338,722
|
|
|||||
Other long-term liabilities, including deferred income taxes
|
|
104,606
|
|
|
94,988
|
|
|
101,947
|
|
|
100,107
|
|
|
90,372
|
|
(1)
|
Loss from discontinued operations for the periods presented includes the income and losses for The Territory Ahead and Smith+Noble, two brands sold by Cornerstone in 2012.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
HSN
|
|
$
|
2,312,382
|
|
|
2%
|
|
$
|
2,265,026
|
|
|
5%
|
|
$
|
2,160,341
|
|
Cornerstone
|
|
1,091,601
|
|
|
9%
|
|
1,001,713
|
|
|
10%
|
|
909,015
|
|
|||
Total HSNi net sales
|
|
$
|
3,403,983
|
|
|
4%
|
|
$
|
3,266,739
|
|
|
6%
|
|
$
|
3,069,356
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Jewelry
|
|
11.1
|
%
|
|
13.1
|
%
|
|
14.0
|
%
|
Fashion (apparel & accessories)
|
|
13.9
|
%
|
|
13.1
|
%
|
|
13.3
|
%
|
Beauty & Health
|
|
24.5
|
%
|
|
22.7
|
%
|
|
22.9
|
%
|
Home & Other (including household, home design, electronics, culinary and other)
|
|
50.5
|
%
|
|
51.1
|
%
|
|
49.8
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
Year Ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Home brands (Ballard Designs, Frontgate, Grandin Road and Improvements)
|
|
73.9
|
%
|
|
71.8
|
%
|
|
71.5
|
%
|
Apparel brands (Chasing Fireflies, Garnet Hill and TravelSmith) (a)
|
|
26.1
|
%
|
|
28.2
|
%
|
|
28.5
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(a) Chasing Fireflies was acquired in April 2012.
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Gross profit:
|
|
|
||||||||||||||
HSN
|
|
$
|
796,705
|
|
|
1%
|
|
$
|
786,650
|
|
|
6%
|
|
$
|
741,308
|
|
HSN gross margin
|
|
34.5
|
%
|
|
(20 bp)
|
|
34.7
|
%
|
|
40 bp
|
|
34.3
|
%
|
|||
Cornerstone
|
|
$
|
433,110
|
|
|
9%
|
|
$
|
397,074
|
|
|
11%
|
|
$
|
358,954
|
|
Cornerstone gross margin
|
|
39.7
|
%
|
|
10 bp
|
|
39.6
|
%
|
|
10 bp
|
|
39.5
|
%
|
|||
HSNi
|
|
$
|
1,229,815
|
|
|
4%
|
|
$
|
1,183,724
|
|
|
8%
|
|
$
|
1,100,262
|
|
HSNi gross margin
|
|
36.1
|
%
|
|
(10 bp)
|
|
36.2
|
%
|
|
40 bp
|
|
35.8
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
HSN
|
|
$
|
392,715
|
|
|
2%
|
|
$
|
385,243
|
|
|
4%
|
|
$
|
368,915
|
|
As a percentage of HSN net sales
|
|
17.0
|
%
|
|
0 bp
|
|
17.0
|
%
|
|
(10 bp)
|
|
17.1
|
%
|
|||
Cornerstone
|
|
$
|
303,079
|
|
|
9%
|
|
$
|
277,079
|
|
|
12%
|
|
$
|
247,501
|
|
As a percentage of Cornerstone net sales
|
|
27.8
|
%
|
|
10 bp
|
|
27.7
|
%
|
|
50 bp
|
|
27.2
|
%
|
|||
HSNi
|
|
$
|
695,794
|
|
|
5%
|
|
$
|
662,322
|
|
|
7%
|
|
$
|
616,416
|
|
As a percentage of HSNi net sales
|
|
20.4
|
%
|
|
10 bp
|
|
20.3
|
%
|
|
20 bp
|
|
20.1
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
HSN
|
|
$
|
154,434
|
|
|
(5)%
|
|
$
|
162,417
|
|
|
7%
|
|
$
|
151,813
|
|
As a percentage of HSN net sales
|
|
6.7
|
%
|
|
(50 bp)
|
|
7.2
|
%
|
|
20 bp
|
|
7.0
|
%
|
|||
Cornerstone
|
|
$
|
56,344
|
|
|
(9)%
|
|
$
|
62,236
|
|
|
9%
|
|
$
|
57,169
|
|
As a percentage of Cornerstone net sales
|
|
5.2
|
%
|
|
(100 bp)
|
|
6.2
|
%
|
|
(10 bp)
|
|
6.3
|
%
|
|||
HSNi
|
|
$
|
210,778
|
|
|
(6)%
|
|
$
|
224,653
|
|
|
7%
|
|
$
|
208,982
|
|
As a percentage of HSNi net sales
|
|
6.2
|
%
|
|
(70 bp)
|
|
6.9
|
%
|
|
10 bp
|
|
6.8
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
HSN
|
|
$
|
28,372
|
|
|
7%
|
|
$
|
26,486
|
|
|
(4)%
|
|
$
|
27,652
|
|
Cornerstone
|
|
12,217
|
|
|
6%
|
|
11,519
|
|
|
41%
|
|
8,170
|
|
|||
HSNi
|
|
$
|
40,589
|
|
|
7%
|
|
$
|
38,005
|
|
|
6%
|
|
$
|
35,822
|
|
As a percentage of HSNi net sales
|
|
1.2
|
%
|
|
0 bp
|
|
1.2
|
%
|
|
0 bp
|
|
1.2
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
HSN
|
|
$
|
261,292
|
|
|
4%
|
|
$
|
250,836
|
|
|
7%
|
|
$
|
235,164
|
|
As a percentage of HSN net sales
|
|
11.3
|
%
|
|
20 bp
|
|
11.1
|
%
|
|
20 bp
|
|
10.9
|
%
|
|||
Cornerstone
|
|
$
|
76,574
|
|
|
4%
|
|
$
|
73,441
|
|
|
9%
|
|
$
|
67,595
|
|
As a percentage of Cornerstone net sales
|
|
7.0
|
%
|
|
(30 bp)
|
|
7.3
|
%
|
|
(10 bp)
|
|
7.4
|
%
|
|||
HSNi
|
|
$
|
337,866
|
|
|
4%
|
|
$
|
324,277
|
|
|
7%
|
|
$
|
302,759
|
|
As a percentage of HSNi net sales
|
|
9.9
|
%
|
|
0 bp
|
|
9.9
|
%
|
|
0 bp
|
|
9.9
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
HSN
|
|
$
|
221,184
|
|
|
4%
|
|
$
|
212,503
|
|
|
10%
|
|
$
|
192,928
|
|
As a percentage of HSN net sales
|
|
9.6
|
%
|
|
20 bp
|
|
9.4
|
%
|
|
50 bp
|
|
8.9
|
%
|
|||
Cornerstone
|
|
$
|
61,470
|
|
|
33%
|
|
$
|
46,241
|
|
|
—%
|
|
$
|
46,114
|
|
As a percentage of Cornerstone net sales
|
|
5.6
|
%
|
|
100 bp
|
|
4.6
|
%
|
|
(50 bp)
|
|
5.1
|
%
|
|||
HSNi
|
|
$
|
282,654
|
|
|
9%
|
|
$
|
258,744
|
|
|
8%
|
|
$
|
239,042
|
|
As a percentage of HSNi net sales
|
|
8.3
|
%
|
|
40 bp
|
|
7.9
|
%
|
|
10 bp
|
|
7.8
|
%
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2013
|
|
Change
|
|
2012
|
|
Change
|
|
2011
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Interest income
|
|
$
|
205
|
|
|
(64)%
|
|
$
|
564
|
|
|
(17)%
|
|
$
|
679
|
|
Interest expense
|
|
(6,718
|
)
|
|
(68)%
|
|
(20,811
|
)
|
|
(35)%
|
|
(31,963
|
)
|
|||
Loss on debt extinguishment
|
|
—
|
|
|
NA
|
|
(18,627
|
)
|
|
NA
|
|
—
|
|
|||
Total other expense, net
|
|
$
|
(6,513
|
)
|
|
(83)%
|
|
$
|
(38,874
|
)
|
|
24%
|
|
$
|
(31,284
|
)
|
As a percentage of HSNi net sales
|
|
0.2
|
%
|
|
(100 bp)
|
|
1.2
|
%
|
|
20 bp
|
|
1.0
|
%
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
Amounts
Committed
|
|
Less Than
1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More Than
5 Years
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Long-term debt, including current maturities
|
|
$
|
240,625
|
|
|
$
|
12,500
|
|
|
$
|
35,938
|
|
|
$
|
192,187
|
|
|
$
|
—
|
|
Interest on debt (a)
|
|
16,422
|
|
|
5,187
|
|
|
9,828
|
|
|
1,407
|
|
|
—
|
|
|||||
Operating leases
|
|
103,407
|
|
|
24,756
|
|
|
38,285
|
|
|
26,666
|
|
|
13,700
|
|
|||||
Purchase obligations (b)
|
|
141,678
|
|
|
73,610
|
|
|
68,016
|
|
|
52
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
502,132
|
|
|
$
|
116,053
|
|
|
$
|
152,067
|
|
|
$
|
220,312
|
|
|
$
|
13,700
|
|
(a)
|
Includes interest on variable rate debt estimated using the rate in effect as of December 31, 2013 through January 31, 2014, at which time the forward-starting interest rate swap goes into effect. An all-in fixed rate of 2.3525% based on HSNi's leverage ratio as of December 31, 2013 is then assumed from February 1, 2014 through April 2017, the date of expiration of the variable rate debt.
|
(b)
|
The purchase obligations primarily relate to contracts with pay television operators and include obligations for future cable distribution and commission guarantees.
|
|
|
Amount of Commitments Expiration Per Period
|
||||||||||||||||||
Commercial Commitments
|
|
Total
Amounts
Committed
|
|
Less Than
1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More Than
5 Years
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Letters of credit and surety bonds (c)
|
|
$
|
35,711
|
|
|
$
|
35,561
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(c)
|
The letters of credit (“LOCs”) primarily consist of trade LOCs which are used for inventory purchases. Trade LOCs are guarantees of payment based upon the delivery of goods. The surety bonds primarily consist of custom bonds which relate to the import of merchandise into the United States.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
|
|
Years Ended
December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
|
$
|
3,403,983
|
|
|
$
|
3,266,739
|
|
|
$
|
3,069,356
|
|
Cost of sales
|
|
2,174,168
|
|
|
2,083,015
|
|
|
1,969,094
|
|
|||
Gross profit
|
|
1,229,815
|
|
|
1,183,724
|
|
|
1,100,262
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Selling and marketing
|
|
695,794
|
|
|
662,322
|
|
|
616,416
|
|
|||
General and administrative
|
|
210,778
|
|
|
224,653
|
|
|
208,982
|
|
|||
Depreciation and amortization
|
|
40,589
|
|
|
38,005
|
|
|
35,822
|
|
|||
Total operating expenses
|
|
947,161
|
|
|
924,980
|
|
|
861,220
|
|
|||
Operating income
|
|
282,654
|
|
|
258,744
|
|
|
239,042
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Interest income
|
|
205
|
|
|
564
|
|
|
679
|
|
|||
Interest expense
|
|
(6,718
|
)
|
|
(20,811
|
)
|
|
(31,963
|
)
|
|||
Loss on debt extinguishment
|
|
—
|
|
|
(18,627
|
)
|
|
—
|
|
|||
Total other expense, net
|
|
(6,513
|
)
|
|
(38,874
|
)
|
|
(31,284
|
)
|
|||
Income from continuing operations before income taxes
|
|
276,141
|
|
|
219,870
|
|
|
207,758
|
|
|||
Income tax provision
|
|
(97,692
|
)
|
|
(83,373
|
)
|
|
(80,106
|
)
|
|||
Income from continuing operations
|
|
178,449
|
|
|
136,497
|
|
|
127,652
|
|
|||
Loss from discontinued operations, net of tax
|
|
—
|
|
|
(5,822
|
)
|
|
(4,582
|
)
|
|||
Net income
|
|
$
|
178,449
|
|
|
$
|
130,675
|
|
|
$
|
123,070
|
|
|
|
|
|
|
|
|
||||||
Income from continuing operations per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
3.33
|
|
|
$
|
2.42
|
|
|
$
|
2.18
|
|
Diluted
|
|
$
|
3.25
|
|
|
$
|
2.36
|
|
|
$
|
2.10
|
|
Net income per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
3.33
|
|
|
$
|
2.32
|
|
|
$
|
2.10
|
|
Diluted
|
|
$
|
3.25
|
|
|
$
|
2.25
|
|
|
$
|
2.03
|
|
Shares used in computing earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
53,640
|
|
|
56,314
|
|
|
58,636
|
|
|||
Diluted
|
|
54,857
|
|
|
57,956
|
|
|
60,689
|
|
|||
Dividends declared per common share
|
|
$
|
0.79
|
|
|
$
|
0.555
|
|
|
$
|
0.125
|
|
|
|
Years Ended
December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
|
$
|
178,449
|
|
|
$
|
130,675
|
|
|
$
|
123,070
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Change in fair value of derivative instrument
|
|
825
|
|
|
(471
|
)
|
|
—
|
|
|||
Other comprehensive income (loss), net of tax
|
|
825
|
|
|
(471
|
)
|
|
—
|
|
|||
Comprehensive income
|
|
$
|
179,274
|
|
|
$
|
130,204
|
|
|
$
|
123,070
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
196,433
|
|
|
$
|
222,092
|
|
Accounts receivable, net of allowance of $16,863 and $14,537, respectively
|
|
265,115
|
|
|
249,890
|
|
||
Inventories
|
|
327,319
|
|
|
330,936
|
|
||
Deferred income taxes
|
|
29,761
|
|
|
27,603
|
|
||
Prepaid expenses and other current assets
|
|
48,630
|
|
|
46,172
|
|
||
Total current assets
|
|
867,258
|
|
|
876,693
|
|
||
Property and equipment, net
|
|
178,720
|
|
|
171,303
|
|
||
Intangible assets, net
|
|
262,460
|
|
|
266,876
|
|
||
Goodwill
|
|
9,858
|
|
|
9,858
|
|
||
Other non-current assets
|
|
19,627
|
|
|
7,222
|
|
||
TOTAL ASSET
S
|
|
$
|
1,337,923
|
|
|
$
|
1,331,952
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable, trade
|
|
$
|
255,627
|
|
|
$
|
267,061
|
|
Current maturities of long-term debt
|
|
12,500
|
|
|
9,375
|
|
||
Accrued expenses and other current liabilities
|
|
207,984
|
|
|
215,389
|
|
||
Total current liabilities
|
|
476,111
|
|
|
491,825
|
|
||
Long-term debt, less current maturities
|
|
228,125
|
|
|
240,625
|
|
||
Deferred income taxes
|
|
88,034
|
|
|
79,002
|
|
||
Other long-term liabilities
|
|
16,572
|
|
|
15,986
|
|
||
Total liabilities
|
|
808,842
|
|
|
827,438
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
||||
SHAREHOLDERS’ EQUITY:
|
|
|
|
|
||||
Preferred stock $0.01 par value; 25,000,000 authorized shares; no issued shares
|
|
—
|
|
|
—
|
|
||
Common stock $0.01 par value; 300,000,000 authorized shares; 53,002,368 and 54,853,684 issued shares as of December 31, 2013 and 2012, respectively
|
|
530
|
|
|
549
|
|
||
Additional paid-in capital
|
|
1,810,072
|
|
|
1,964,760
|
|
||
Accumulated deficit
|
|
(1,281,875
|
)
|
|
(1,460,324
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
354
|
|
|
(471
|
)
|
||
Total shareholders’ equity
|
|
529,081
|
|
|
504,514
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
1,337,923
|
|
|
$
|
1,331,952
|
|
|
|
Preferred
Stock
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Total
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance as of December 31, 2010
|
|
—
|
|
|
$
|
—
|
|
|
57,967
|
|
|
$
|
580
|
|
|
$
|
2,189,952
|
|
|
$
|
(1,714,069
|
)
|
|
$
|
—
|
|
|
$
|
476,463
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123,070
|
|
|
—
|
|
|
123,070
|
|
||||||
Stock-based compensation expense for equity awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,908
|
|
|
—
|
|
|
—
|
|
|
18,908
|
|
||||||
Cash dividend declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,384
|
)
|
|
—
|
|
|
|
|
|
(7,384
|
)
|
||||||
Issuance of common stock from stock-based compensation awards, including tax benefit of $9,330
|
|
—
|
|
|
—
|
|
|
1,238
|
|
|
12
|
|
|
6,689
|
|
|
—
|
|
|
—
|
|
|
6,701
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(791
|
)
|
|
(8
|
)
|
|
(28,053
|
)
|
|
|
|
|
|
(28,061
|
)
|
||||||||
Balance as of December 31, 2011
|
|
—
|
|
|
—
|
|
|
58,414
|
|
|
584
|
|
|
2,180,112
|
|
|
(1,590,999
|
)
|
|
—
|
|
|
589,697
|
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130,675
|
|
|
—
|
|
|
130,675
|
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(471
|
)
|
|
(471
|
)
|
||||||
Stock-based compensation expense for equity awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,440
|
|
|
—
|
|
|
—
|
|
|
14,440
|
|
||||||
Cash dividend declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,049
|
)
|
|
—
|
|
|
—
|
|
|
(31,049
|
)
|
||||||
Issuance of common stock from stock-based compensation awards, including tax benefit of $18,900
|
|
—
|
|
|
—
|
|
|
1,901
|
|
|
19
|
|
|
21,797
|
|
|
—
|
|
|
—
|
|
|
21,816
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(5,461
|
)
|
|
(54
|
)
|
|
(220,540
|
)
|
|
—
|
|
|
—
|
|
|
(220,594
|
)
|
||||||
Balance as of December 31, 2012
|
|
—
|
|
|
—
|
|
|
54,854
|
|
|
549
|
|
|
1,964,760
|
|
|
(1,460,324
|
)
|
|
(471
|
)
|
|
504,514
|
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
178,449
|
|
|
—
|
|
|
178,449
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
825
|
|
|
825
|
|
||||||
Stock-based compensation expense for equity awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,043
|
|
|
—
|
|
|
—
|
|
|
14,043
|
|
||||||
Cash dividend declared on common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,281
|
)
|
|
—
|
|
|
—
|
|
|
(42,281
|
)
|
||||||
Issuance of common stock from stock-based compensation awards, including tax benefit of $9,788
|
|
—
|
|
|
—
|
|
|
885
|
|
|
9
|
|
|
20,416
|
|
|
—
|
|
|
—
|
|
|
20,425
|
|
||||||
Repurchases of common stock
|
|
—
|
|
|
—
|
|
|
(2,737
|
)
|
|
(28
|
)
|
|
(146,866
|
)
|
|
—
|
|
|
—
|
|
|
(146,894
|
)
|
||||||
Balance as of December 31, 2013
|
|
—
|
|
|
$
|
—
|
|
|
53,002
|
|
|
$
|
530
|
|
|
$
|
1,810,072
|
|
|
$
|
(1,281,875
|
)
|
|
$
|
354
|
|
|
$
|
529,081
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities attributable to continuing operations:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
178,449
|
|
|
$
|
130,675
|
|
|
$
|
123,070
|
|
Loss from discontinued operations, net of tax
|
|
—
|
|
|
(5,822
|
)
|
|
(4,582
|
)
|
|||
Income from continuing operations
|
|
178,449
|
|
|
136,497
|
|
|
127,652
|
|
|||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
40,589
|
|
|
38,005
|
|
|
35,822
|
|
|||
Stock-based compensation expense
|
|
14,043
|
|
|
19,056
|
|
|
26,401
|
|
|||
Loss on debt extinguishment
|
|
—
|
|
|
18,627
|
|
|
—
|
|
|||
Amortization of debt issuance costs
|
|
1,130
|
|
|
1,777
|
|
|
2,941
|
|
|||
Deferred income taxes
|
|
6,370
|
|
|
(2,146
|
)
|
|
2,238
|
|
|||
Bad debt expense
|
|
22,773
|
|
|
24,186
|
|
|
19,758
|
|
|||
Excess tax benefits from stock-based awards
|
|
(10,360
|
)
|
|
(19,004
|
)
|
|
(9,835
|
)
|
|||
Fair value adjustment to contingent consideration obligation
|
|
(3,600
|
)
|
|
—
|
|
|
—
|
|
|||
Asset impairment
|
|
3,040
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
1,140
|
|
|
764
|
|
|
2,343
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(38,211
|
)
|
|
(51,995
|
)
|
|
(46,201
|
)
|
|||
Inventories
|
|
3,617
|
|
|
(36,117
|
)
|
|
(1,385
|
)
|
|||
Prepaid expenses and other assets
|
|
(6,318
|
)
|
|
(3,724
|
)
|
|
(3,213
|
)
|
|||
Accounts payable, accrued expenses and other current liabilities
|
|
19,245
|
|
|
21,487
|
|
|
8,834
|
|
|||
Net cash provided by operating activities attributable to continuing operations
|
|
231,907
|
|
|
147,413
|
|
|
165,355
|
|
|||
Cash flows from investing activities attributable to continuing operations:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(51,952
|
)
|
|
(45,803
|
)
|
|
(42,069
|
)
|
|||
Acquisition of business, net of cash received
|
|
—
|
|
|
(22,875
|
)
|
|
—
|
|
|||
Advance payment of capital expenditure
|
|
(9,100
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of discontinued operations
|
|
—
|
|
|
6,580
|
|
|
—
|
|
|||
Net cash used in investing activities attributable to continuing operations
|
|
(61,052
|
)
|
|
(62,098
|
)
|
|
(42,069
|
)
|
|||
Cash flows from financing activities attributable to continuing operations:
|
|
|
|
|
|
|
||||||
Redemption of Senior Notes
|
|
—
|
|
|
(253,500
|
)
|
|
(69,841
|
)
|
|||
Borrowing under term loan
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|||
Repayments of long-term debt
|
|
(9,375
|
)
|
|
—
|
|
|
—
|
|
|||
Payments of debt issuance costs
|
|
—
|
|
|
(4,607
|
)
|
|
—
|
|
|||
Repurchase of common stock
|
|
(146,894
|
)
|
|
(221,835
|
)
|
|
(26,821
|
)
|
|||
Cash dividends paid
|
|
(42,281
|
)
|
|
(31,049
|
)
|
|
(7,384
|
)
|
|||
Proceeds from issuance of common stock
|
|
8,396
|
|
|
20,688
|
|
|
8,845
|
|
|||
Tax withholdings related to stock-based awards
|
|
(14,395
|
)
|
|
(18,209
|
)
|
|
(11,430
|
)
|
|||
Excess tax benefits from stock-based awards
|
|
10,360
|
|
|
19,004
|
|
|
9,835
|
|
|||
Payment of contingent consideration obligation
|
|
(2,172
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in financing activities attributable to continuing operations
|
|
(196,361
|
)
|
|
(239,508
|
)
|
|
(96,796
|
)
|
|||
Total cash (used in) provided by continuing operations
|
|
(25,506
|
)
|
|
(154,193
|
)
|
|
26,490
|
|
|||
Cash flows from discontinued operations:
|
|
|
|
|
|
|
||||||
Net cash (used in) provided by operating activities attributable to discontinued operations
|
|
(153
|
)
|
|
(5,361
|
)
|
|
1,309
|
|
|||
Net cash used in investing activities attributable to discontinued operations
|
|
—
|
|
|
(162
|
)
|
|
(250
|
)
|
|||
Total cash (used in) provided by discontinued operations
|
|
(153
|
)
|
|
(5,523
|
)
|
|
1,059
|
|
|||
Net (decrease) increase in cash and cash equivalents
|
|
(25,659
|
)
|
|
(159,716
|
)
|
|
27,549
|
|
|||
Cash and cash equivalents at beginning of period
|
|
222,092
|
|
|
381,808
|
|
|
354,259
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
196,433
|
|
|
$
|
222,092
|
|
|
$
|
381,808
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Flexpay and other customer-related
|
|
$
|
222,983
|
|
|
$
|
200,989
|
|
Credit card companies
|
|
21,447
|
|
|
29,393
|
|
||
Other
|
|
20,685
|
|
|
19,508
|
|
||
Accounts receivable, net
|
|
$
|
265,115
|
|
|
$
|
249,890
|
|
|
|
|
|
|
Asset Category
|
Depreciation Period
|
Computer and broadcast equipment and capitalized software
|
3 to 6 Years
|
Buildings, leasehold improvements and land improvements
|
3 to 40 Years
|
Furniture and other equipment
|
2 to 10 Years
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Intangible assets with indefinite lives
|
|
$
|
261,809
|
|
|
$
|
264,849
|
|
Intangible assets with definite lives, net
|
|
651
|
|
|
2,027
|
|
||
Total intangible assets, net
|
|
$
|
262,460
|
|
|
$
|
266,876
|
|
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
|
Weighted
Average
Amortization
Life (Years)
|
||||||
As of December 31, 2013
|
|
$
|
3,800
|
|
|
$
|
(3,149
|
)
|
|
$
|
651
|
|
|
1.1
|
As of December 31, 2012
|
|
$
|
3,800
|
|
|
$
|
(1,773
|
)
|
|
$
|
2,027
|
|
|
1.4
|
|
|
Gross Balance as of January 1, 2013
|
|
Accumulated Impairment
|
|
Net Balance as of January 1, 2013
|
|
Additions
|
|
Impairment
|
|
Net Balance as of December 31, 2013
|
||||||||||||
HSN
|
|
$
|
2,391,594
|
|
|
$
|
(2,391,594
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cornerstone
|
|
502,464
|
|
|
(492,606
|
)
|
|
9,858
|
|
|
—
|
|
|
—
|
|
|
9,858
|
|
||||||
Total
|
|
$
|
2,894,058
|
|
|
$
|
(2,884,200
|
)
|
|
$
|
9,858
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Gross Balance as of January 1, 2012
|
|
Accumulated Impairment
|
|
Net Balance as of January 1, 2012
|
|
Additions
|
|
Impairment
|
|
Net Balance as of December 31, 2012
|
||||||||||||
HSN
|
|
$
|
2,391,594
|
|
|
$
|
(2,391,594
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cornerstone
|
|
492,606
|
|
|
(492,606
|
)
|
|
—
|
|
|
9,858
|
|
|
—
|
|
|
9,858
|
|
||||||
Total
|
|
$
|
2,884,200
|
|
|
$
|
(2,884,200
|
)
|
|
$
|
—
|
|
|
$
|
9,858
|
|
|
$
|
—
|
|
|
$
|
9,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Capitalized software
|
|
$
|
215,893
|
|
|
$
|
196,529
|
|
Computer and broadcast equipment
|
|
85,521
|
|
|
83,038
|
|
||
Buildings and leasehold improvements
|
|
102,437
|
|
|
98,241
|
|
||
Furniture and other equipment
|
|
83,779
|
|
|
79,748
|
|
||
Projects in progress
|
|
12,528
|
|
|
18,494
|
|
||
Land and land improvements
|
|
10,460
|
|
|
10,734
|
|
||
|
|
510,618
|
|
|
486,784
|
|
||
Less: accumulated depreciation and amortization
|
|
(331,898
|
)
|
|
(315,481
|
)
|
||
Total property and equipment, net
|
|
$
|
178,720
|
|
|
$
|
171,303
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Accrued sales returns
|
|
$
|
40,072
|
|
|
$
|
40,554
|
|
Accrued cable and satellite distribution fees
|
|
30,452
|
|
|
23,874
|
|
||
Accrued freight and fulfillment expenses
|
|
32,646
|
|
|
23,979
|
|
||
Accrued compensation and benefits
|
|
36,567
|
|
|
53,635
|
|
||
Other accrued expenses and current liabilities
|
|
68,247
|
|
|
73,347
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
207,984
|
|
|
$
|
215,389
|
|
|
|
Year Ended December 31, 2013
|
||||||||||
|
|
HSN
|
|
Cornerstone
|
|
Total
|
||||||
Adjusted EBITDA
|
|
$
|
261,292
|
|
|
$
|
76,574
|
|
|
$
|
337,866
|
|
Stock-based compensation expense
|
|
(10,657
|
)
|
|
(3,386
|
)
|
|
(14,043
|
)
|
|||
Depreciation and amortization
|
|
(28,372
|
)
|
|
(12,217
|
)
|
|
(40,589
|
)
|
|||
Assets impairment
|
|
—
|
|
|
(3,040
|
)
|
|
(3,040
|
)
|
|||
Fair value adjustment to contingent consideration obligation
|
|
—
|
|
|
3,600
|
|
|
3,600
|
|
|||
Loss on disposition of fixed assets
|
|
(1,079
|
)
|
|
(61
|
)
|
|
(1,140
|
)
|
|||
Operating income
|
|
$
|
221,184
|
|
|
$
|
61,470
|
|
|
282,654
|
|
|
Total other expense, net
|
|
|
|
|
|
(6,513
|
)
|
|||||
Income from continuing operations before income taxes
|
|
|
|
|
|
276,141
|
|
|||||
Income tax provision
|
|
|
|
|
|
(97,692
|
)
|
|||||
Income from continuing operations
|
|
|
|
|
|
178,449
|
|
|||||
Loss from discontinued operations, net of tax
|
|
|
|
|
|
—
|
|
|||||
Net income
|
|
|
|
|
|
$
|
178,449
|
|
|
|
Year Ended December 31, 2012
|
||||||||||
|
|
HSN
|
|
Cornerstone
|
|
Total
|
||||||
Adjusted EBITDA
|
|
$
|
250,836
|
|
|
$
|
73,441
|
|
|
$
|
324,277
|
|
Stock-based compensation expense
|
|
(11,167
|
)
|
|
(7,889
|
)
|
|
(19,056
|
)
|
|||
Depreciation and amortization
|
|
(26,486
|
)
|
|
(11,519
|
)
|
|
(38,005
|
)
|
|||
Sales tax settlement
|
|
—
|
|
|
(7,750
|
)
|
|
(7,750
|
)
|
|||
Loss on disposition of fixed assets
|
|
(680
|
)
|
|
(42
|
)
|
|
(722
|
)
|
|||
Operating income
|
|
$
|
212,503
|
|
|
$
|
46,241
|
|
|
258,744
|
|
|
Total other expense, net
|
|
|
|
|
|
(38,874
|
)
|
|||||
Income from continuing operations before income taxes
|
|
|
|
|
|
219,870
|
|
|||||
Income tax provision
|
|
|
|
|
|
(83,373
|
)
|
|||||
Income from continuing operations
|
|
|
|
|
|
136,497
|
|
|||||
Loss from discontinued operations, net of tax
|
|
|
|
|
|
(5,822
|
)
|
|||||
Net income
|
|
|
|
|
|
$
|
130,675
|
|
|
|
Year Ended December 31, 2011
|
||||||||||
|
|
HSN
|
|
Cornerstone
|
|
Total
|
||||||
Adjusted EBITDA
|
|
$
|
235,163
|
|
|
$
|
67,595
|
|
|
$
|
302,758
|
|
Stock-based compensation expense
|
|
(13,101
|
)
|
|
(13,300
|
)
|
|
(26,401
|
)
|
|||
Depreciation and amortization
|
|
(27,652
|
)
|
|
(8,170
|
)
|
|
(35,822
|
)
|
|||
Loss on disposition of fixed assets
|
|
(1,482
|
)
|
|
(11
|
)
|
|
(1,493
|
)
|
|||
Operating income
|
|
$
|
192,928
|
|
|
$
|
46,114
|
|
|
239,042
|
|
|
Total other expense, net
|
|
|
|
|
|
(31,284
|
)
|
|||||
Income from continuing operations before income taxes
|
|
|
|
|
|
207,758
|
|
|||||
Income tax provision
|
|
|
|
|
|
(80,106
|
)
|
|||||
Income from continuing operations
|
|
|
|
|
|
127,652
|
|
|||||
Loss from discontinued operations, net of tax
|
|
|
|
|
|
(4,582
|
)
|
|||||
Net income
|
|
|
|
|
|
$
|
123,070
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales:
|
|
|
|
|
|
|
||||||
HSN
|
|
$
|
2,312,382
|
|
|
$
|
2,265,026
|
|
|
$
|
2,160,341
|
|
Cornerstone
|
|
1,091,601
|
|
|
1,001,713
|
|
|
909,015
|
|
|||
Total
|
|
$
|
3,403,983
|
|
|
$
|
3,266,739
|
|
|
$
|
3,069,356
|
|
Identifiable assets:
|
|
|
|
|
|
|
||||||
HSN
|
|
$
|
1,058,573
|
|
|
$
|
1,083,714
|
|
|
$
|
1,178,565
|
|
Cornerstone
|
|
279,350
|
|
|
248,238
|
|
|
216,408
|
|
|||
Total
|
|
1,337,923
|
|
|
1,331,952
|
|
|
1,394,973
|
|
|||
Capital expenditures:
|
|
|
|
|
|
|
||||||
HSN
|
|
$
|
36,156
|
|
|
$
|
33,566
|
|
|
$
|
30,155
|
|
Cornerstone
|
|
15,796
|
|
|
12,237
|
|
|
11,914
|
|
|||
Total
|
|
$
|
51,952
|
|
|
$
|
45,803
|
|
|
$
|
42,069
|
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Secured credit agreement expiring April 24, 2017:
|
|
|
|
|
||||
Term loan
|
|
$
|
240,625
|
|
|
$
|
250,000
|
|
Revolving credit facility
|
|
—
|
|
|
—
|
|
||
Total long-term debt
|
|
240,625
|
|
|
250,000
|
|
||
Less: current maturities
|
|
(12,500
|
)
|
|
(9,375
|
)
|
||
Long-term debt, less current maturities
|
|
$
|
228,125
|
|
|
$
|
240,625
|
|
|
December 31, 2013
|
|||||||||||||||
|
|
Total Fair Value and Carrying Value on Balance Sheet
|
|
Fair Value Measurement Category
|
||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
|
$
|
574
|
|
|
$
|
—
|
|
|
$
|
574
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
1,032
|
|
|
—
|
|
|
—
|
|
|
1,032
|
|
|
December 31, 2012
|
|||||||||||||||
|
|
Total Fair Value and Carrying Value on Balance Sheet
|
|
Fair Value Measurement Category
|
||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap
|
|
$
|
755
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
—
|
|
Contingent consideration
|
|
6,832
|
|
|
—
|
|
|
—
|
|
|
6,832
|
|
|
2013
|
|
2012
|
||||
Beginning of the year
|
$
|
6,832
|
|
|
$
|
—
|
|
Fair value of contingent consideration issued
|
—
|
|
|
6,500
|
|
||
Accretion
|
383
|
|
|
332
|
|
||
Payments
|
(2,583
|
)
|
|
—
|
|
||
Fair value adjustments
|
(3,600
|
)
|
|
—
|
|
||
End of the year
|
$
|
1,032
|
|
|
$
|
6,832
|
|
|
|
|
|
|
|
December 31, 2013
|
||||||||||||||||||
|
|
Carrying
Value
|
|
Fair Value
|
|
Fair Value Measurement Category
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Term Loan
|
|
$
|
240,625
|
|
|
$
|
240,625
|
|
|
$
|
—
|
|
|
$
|
240,625
|
|
|
$
|
—
|
|
|
|
December 31, 2012
|
||||||||||||||||||
|
|
Carrying
Value
|
|
Fair Value
|
|
Fair Value Measurement Category
|
||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Term Loan
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
178,449
|
|
|
$
|
136,497
|
|
|
$
|
127,652
|
|
Discontinued operations
|
|
—
|
|
|
(5,822
|
)
|
|
(4,582
|
)
|
|||
Net income
|
|
$
|
178,449
|
|
|
$
|
130,675
|
|
|
$
|
123,070
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
53,640
|
|
|
56,314
|
|
|
58,636
|
|
|||
Dilutive effect of stock-based compensation awards
|
|
1,217
|
|
|
1,642
|
|
|
2,053
|
|
|||
Diluted
|
|
54,857
|
|
|
57,956
|
|
|
60,689
|
|
|||
|
|
|
|
|
|
|
||||||
Net income (loss) per share - basic:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
3.33
|
|
|
$
|
2.42
|
|
|
$
|
2.18
|
|
Discontinued operations
|
|
—
|
|
|
(0.10
|
)
|
|
(0.08
|
)
|
|||
Net income
|
|
$
|
3.33
|
|
|
$
|
2.32
|
|
|
$
|
2.10
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) per share - diluted:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
3.25
|
|
|
$
|
2.36
|
|
|
$
|
2.10
|
|
Discontinued operations
|
|
—
|
|
|
(0.11
|
)
|
|
(0.07
|
)
|
|||
Net income
|
|
$
|
3.25
|
|
|
$
|
2.25
|
|
|
$
|
2.03
|
|
|
|
|
|
|
|
|
||||||
Unexercised employee stock options and stock appreciation rights and unvested restricted stock units excluded from the diluted EPS calculation because their effect would have been antidilutive
|
|
432
|
|
|
1,276
|
|
|
911
|
|
|
|
Year Ended December 31,
|
||||||||||
2013
|
|
2012
|
|
2011
|
||||||||
Selling and marketing
|
|
$
|
3,793
|
|
|
$
|
3,515
|
|
|
$
|
4,722
|
|
General and administrative
|
|
10,250
|
|
|
15,541
|
|
|
21,679
|
|
|||
Stock-based compensation expense before income taxes
|
|
14,043
|
|
|
19,056
|
|
|
26,401
|
|
|||
Income tax benefit
|
|
(4,835
|
)
|
|
(6,494
|
)
|
|
(8,792
|
)
|
|||
Stock-based compensation expense after income taxes
|
|
$
|
9,208
|
|
|
$
|
12,562
|
|
|
$
|
17,609
|
|
|
|
|
|
|
|
|
|
|
Number of
RSUs
|
|
Weighted
Average Grant
Date Fair Value
|
|||
Nonvested at January 1, 2013
|
|
872,109
|
|
|
$
|
28.02
|
|
Granted
|
|
495,881
|
|
|
58.83
|
|
|
Vested
|
|
(634,512
|
)
|
|
38.23
|
|
|
Forfeited
|
|
(109,769
|
)
|
|
38.56
|
|
|
Nonvested at December 31, 2013
|
|
623,709
|
|
|
40.25
|
|
|
|
Number of
options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Term (in years)
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding at January 1, 2013
|
|
2,776,693
|
|
|
$
|
28.28
|
|
|
|
|
|
||
Granted
|
|
346,301
|
|
|
59.18
|
|
|
|
|
|
|||
Exercised
|
|
(474,855
|
)
|
|
16.07
|
|
|
|
|
|
|||
Forfeited
|
|
(58,936
|
)
|
|
53.73
|
|
|
|
|
|
|||
Expired
|
|
(8,314
|
)
|
|
10.74
|
|
|
|
|
|
|||
Outstanding at December 31, 2013 (1)
|
|
2,580,889
|
|
|
34.15
|
|
|
5.7
|
|
$
|
72,660,432
|
|
|
Vested and expected to vest at December 31, 2013
|
|
2,518,015
|
|
|
33.73
|
|
|
5.7
|
|
$
|
71,932,319
|
|
|
Exercisable at December 31, 2013
|
|
1,944,153
|
|
|
30.35
|
|
|
4.9
|
|
$
|
62,119,059
|
|
(1)
|
Approximately
0.3 million
stock options outstanding as of December 31, 2013 were held by employees of the other Spincos.
|
|
|
Year Ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|||
Volatility factor
|
|
49.1
|
%
|
|
46.5
|
%
|
|
46.5
|
%
|
Risk-free interest rate
|
|
0.85
|
%
|
|
0.91
|
%
|
|
2.33
|
%
|
Expected term
|
|
4.8
|
|
|
5.0
|
|
|
5.0
|
|
Dividend yield
|
|
1.2
|
%
|
|
1.4
|
%
|
|
0.0
|
%
|
|
|
Outstanding
|
|
Exercisable
|
||||||||||||
|
|
Number
Outstanding at
December 31,
2013
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Term in Years
|
|
Number
Exercisable at
December 31,
2013
|
|
Weighted
Average
Exercise Price
|
||||||
$0.00 to $9.99
|
|
116,787
|
|
|
$
|
5.50
|
|
|
4.7
|
|
116,787
|
|
|
$
|
5.50
|
|
$10.00 to $19.99
|
|
161,745
|
|
|
17.60
|
|
|
4.5
|
|
161,745
|
|
|
17.60
|
|
||
$20.00 to $29.99
|
|
658,778
|
|
|
24.80
|
|
|
6.5
|
|
551,814
|
|
|
23.84
|
|
||
$30.00 to $39.99
|
|
973,046
|
|
|
34.93
|
|
|
5.0
|
|
743,252
|
|
|
34.69
|
|
||
$40.00 to $49.99
|
|
370,555
|
|
|
44.71
|
|
|
4.6
|
|
370,555
|
|
|
44.71
|
|
||
$50.00 to $59.99
|
|
299,978
|
|
|
59.16
|
|
|
9.1
|
|
—
|
|
|
—
|
|
||
|
|
2,580,889
|
|
|
|
|
|
|
1,944,153
|
|
|
|
|
|
Year Ended December 31,
|
||||
|
|
2013
|
|
2012
|
||
Volatility factor
|
|
23.3
|
%
|
|
41.7
|
%
|
Risk-free interest rate
|
|
0.10
|
%
|
|
0.09
|
%
|
Expected term
|
|
0.5
|
|
|
0.5
|
|
Dividend yield
|
|
1.3
|
%
|
|
1.3
|
%
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current income tax provision:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(81,521
|
)
|
|
$
|
(76,992
|
)
|
|
$
|
(68,593
|
)
|
State
|
|
(9,990
|
)
|
|
(8,904
|
)
|
|
(9,217
|
)
|
|||
Current income tax provision
|
|
(91,511
|
)
|
|
(85,896
|
)
|
|
(77,810
|
)
|
|||
Deferred income tax (provision) benefit:
|
|
|
|
|
|
|
||||||
Federal
|
|
(6,489
|
)
|
|
1,814
|
|
|
(1,900
|
)
|
|||
State
|
|
308
|
|
|
709
|
|
|
(396
|
)
|
|||
Deferred income tax (provision) benefit
|
|
(6,181
|
)
|
|
2,523
|
|
|
(2,296
|
)
|
|||
Income tax provision
|
|
$
|
(97,692
|
)
|
|
$
|
(83,373
|
)
|
|
$
|
(80,106
|
)
|
|
|
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Provision for accrued expenses
|
|
$
|
33,647
|
|
|
$
|
38,548
|
|
Inventories
|
|
13,125
|
|
|
11,927
|
|
||
Stock-based compensation
|
|
10,888
|
|
|
16,036
|
|
||
Net operating losses
|
|
1,531
|
|
|
1,369
|
|
||
Other
|
|
4,078
|
|
|
2,024
|
|
||
Total deferred tax assets
|
|
63,269
|
|
|
69,904
|
|
||
Less valuation allowance
|
|
(1,495
|
)
|
|
(5,293
|
)
|
||
Net deferred tax assets
|
|
61,774
|
|
|
64,611
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Intangible and other assets
|
|
(91,018
|
)
|
|
(91,783
|
)
|
||
Prepaid expenses
|
|
(13,574
|
)
|
|
(11,692
|
)
|
||
Property and equipment
|
|
(15,455
|
)
|
|
(12,535
|
)
|
||
Total deferred tax liabilities
|
|
(120,047
|
)
|
|
(116,010
|
)
|
||
Net deferred tax liability
|
|
$
|
(58,273
|
)
|
|
$
|
(51,399
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Income tax provision at the federal statutory rate of 35%
|
|
$
|
(96,649
|
)
|
|
$
|
(76,955
|
)
|
|
$
|
(72,715
|
)
|
State income taxes, net of effect of federal tax benefit
|
|
(6,293
|
)
|
|
(5,327
|
)
|
|
(6,386
|
)
|
|||
Other, net
|
|
5,250
|
|
|
(1,091
|
)
|
|
(1,005
|
)
|
|||
Income tax provision
|
|
$
|
(97,692
|
)
|
|
$
|
(83,373
|
)
|
|
$
|
(80,106
|
)
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Balance at beginning of year
|
|
$
|
682
|
|
|
$
|
664
|
|
|
$
|
630
|
|
Additions based on tax positions related to the current year
|
|
417
|
|
|
—
|
|
|
225
|
|
|||
Additions for tax positions of prior years
|
|
—
|
|
|
18
|
|
|
—
|
|
|||
Reductions for tax positions of prior years
|
|
(189
|
)
|
|
—
|
|
|
(191
|
)
|
|||
Balance at end of year
|
|
$
|
910
|
|
|
$
|
682
|
|
|
$
|
664
|
|
|
|
Amount of Commitments Expiration Per Period
|
||||||||||||||||||
|
|
Total Amounts
Committed
|
|
Less Than
1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More Than
5 Years
|
||||||||||
Letters of credit and surety bonds
|
|
$
|
35,711
|
|
|
$
|
35,561
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchase obligations
|
|
141,678
|
|
|
73,610
|
|
|
68,016
|
|
|
52
|
|
|
—
|
|
|||||
Total commercial commitments
|
|
$
|
177,389
|
|
|
$
|
109,171
|
|
|
$
|
68,166
|
|
|
$
|
52
|
|
|
$
|
—
|
|
•
|
the acquisition was approved by a majority of the Qualified Directors;
|
•
|
the acquisition is permitted under the provisions described in “Competing Offers” below; or
|
•
|
after giving effect to the acquisition, Liberty’s ownership percentage of the equity securities of HSNi, based on voting power, would not exceed the Applicable Percentage.
|
•
|
transfers pursuant to a third party tender or exchange offer or in connection with any merger or other business combination, which merger or business combination has been approved by HSNi;
|
•
|
transfers in a public offering in a manner designed to result in a wide distribution, provided that no such transfer is made, to the knowledge of the Liberty Parties, to any person whose ownership percentage (based on voting power) of HSNi’s equity securities, giving effect to the transfer, would exceed
15%
;
|
•
|
a transfer of all of the equity securities of HSNi beneficially owned by the Liberty Parties and their affiliates in a single transaction if the transferee’s ownership percentage (based on voting power), after giving effect to the transfer, would not exceed the Applicable Percentage and only if the transferee assumes all of the rights and obligations (subject to limited exceptions) of the Liberty Parties under the Spinco Agreement;
|
•
|
specified transfers in connection with changes in the beneficial ownership of the ultimate parent company of a Liberty Party or a distribution of the equity interests of a Liberty Party or certain similar events; and
|
•
|
specified transfers relating to certain hedging transactions or stock lending transactions in respect of the Liberty Parties’ equity securities in HSNi, subject to specified restrictions.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
|
(in thousands)
|
||||||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Income tax payments
|
|
$
|
92,502
|
|
|
$
|
52,709
|
|
|
$
|
73,847
|
|
Income tax refunds
|
|
(2,061
|
)
|
|
(10
|
)
|
|
(1,806
|
)
|
|||
Interest payments
|
|
5,230
|
|
|
29,985
|
|
|
29,198
|
|
|||
Non-cash financing activities:
|
|
|
|
|
|
|
||||||
Effective portion of change in interest rate swap
|
|
1,296
|
|
|
755
|
|
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
$
|
—
|
|
|
$
|
40,154
|
|
|
$
|
107,798
|
|
Loss from discontinued operations (including loss on sale of $6.0 million recognized in the second quarter of 2012)
|
$
|
—
|
|
|
$
|
(9,370
|
)
|
|
$
|
(7,353
|
)
|
Income tax benefit
|
—
|
|
|
3,548
|
|
|
2,771
|
|
|||
Loss from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
(5,822
|
)
|
|
$
|
(4,582
|
)
|
|
|
Quarter Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
|
|
|
(a)
|
|
(b)(c)
|
|
(d)
|
||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
772,651
|
|
|
$
|
812,606
|
|
|
$
|
798,890
|
|
|
$
|
1,019,835
|
|
Gross profit
|
|
280,147
|
|
|
308,777
|
|
|
288,590
|
|
|
352,300
|
|
||||
Operating income
|
|
52,518
|
|
|
71,299
|
|
|
61,085
|
|
|
97,752
|
|
||||
Income from continuing operations
|
|
31,553
|
|
|
43,271
|
|
|
42,052
|
|
|
61,573
|
|
||||
(Loss) income from discontinued operations, net of tax
|
|
(9
|
)
|
|
9
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
31,544
|
|
|
43,280
|
|
|
42,052
|
|
|
61,573
|
|
||||
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.58
|
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
1.16
|
|
Diluted
|
|
$
|
0.56
|
|
|
$
|
0.79
|
|
|
$
|
0.77
|
|
|
$
|
1.14
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.58
|
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
$
|
1.16
|
|
Diluted
|
|
$
|
0.56
|
|
|
$
|
0.79
|
|
|
$
|
0.77
|
|
|
$
|
1.14
|
|
Dividends declared per common share
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
737,908
|
|
|
$
|
767,187
|
|
|
$
|
778,769
|
|
|
$
|
982,875
|
|
Gross profit
|
|
266,914
|
|
|
293,448
|
|
|
285,516
|
|
|
337,846
|
|
||||
Operating income
|
|
51,259
|
|
|
65,342
|
|
|
49,312
|
|
|
92,832
|
|
||||
Income from continuing operations
|
|
27,288
|
|
|
35,611
|
|
|
17,558
|
|
|
56,041
|
|
||||
(Loss) income from discontinued operations, net of tax
|
|
(1,118
|
)
|
|
(4,864
|
)
|
|
128
|
|
|
32
|
|
||||
Net income
|
|
26,170
|
|
|
30,747
|
|
|
17,686
|
|
|
56,073
|
|
||||
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.47
|
|
|
$
|
0.63
|
|
|
$
|
0.32
|
|
|
$
|
1.03
|
|
Diluted
|
|
$
|
0.45
|
|
|
$
|
0.61
|
|
|
$
|
0.31
|
|
|
$
|
1.00
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.45
|
|
|
$
|
0.54
|
|
|
$
|
0.32
|
|
|
$
|
1.03
|
|
Diluted
|
|
$
|
0.44
|
|
|
$
|
0.53
|
|
|
$
|
0.31
|
|
|
$
|
1.00
|
|
Dividends declared per common share
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
|
$
|
0.125
|
|
|
$
|
0.18
|
|
(a)
|
The second quarter of 2012 includes a loss of
$6.0 million
, or
$3.8 million
net of taxes, related to the sales of Smith+Noble and The Territory Ahead, two brands formerly included in the Cornerstone portfolio, and is included in the line item "(Loss) income from discontinued operations, net of tax." This loss decreased diluted earnings per share by
$0.06
.
|
(b)
|
The third quarter of 2013 includes discrete tax benefits of
$3.7 million
which increased diluted earnings per share by
$0.07
.
|
(c)
|
The third quarter of 2012 includes a sales tax settlement of
$7.8 million
, or
$4.8 million
net of taxes, and costs associated with the redemption of Senior Notes of
$18.3 million
, or
$11.4 million
net of taxes. These charges decreased diluted earnings per share by
$0.28
.
|
(d)
|
The fourth quarter of 2013 includes a
$3.6 million
reduction to a previously recorded contingent consideration obligation and a
$3.0 million
impairment charge of intangible assets related to a 2012 acquisition resulting in a net expense reduction of
$0.6 million
, or
$1.7 million
net of taxes. These fair value adjustments increased diluted earnings per share by
$0.03
.
|
Description
|
|
Balance at
Beginning
of Period
|
|
Charges to
Earnings
|
|
Charges to
Other
Accounts
|
|
Deductions
|
|
|
|
Balance at
End of
Period
|
||||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
14,537
|
|
|
$
|
23,414
|
|
|
$
|
13
|
|
|
$
|
(21,101
|
)
|
|
(1)
|
|
$
|
16,863
|
|
Sales return accrual
|
|
40,554
|
|
|
648,381
|
|
|
—
|
|
|
(648,863
|
)
|
|
|
|
40,072
|
|
|||||
Deferred tax valuation allowance
|
|
5,293
|
|
|
262
|
|
|
(4,060
|
)
|
|
—
|
|
|
|
|
1,495
|
|
|||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
13,127
|
|
|
$
|
24,186
|
|
|
$
|
(137
|
)
|
|
$
|
(22,639
|
)
|
|
(1)
|
|
$
|
14,537
|
|
Sales return accrual
|
|
39,563
|
|
|
658,394
|
|
|
205
|
|
|
(657,608
|
)
|
|
|
|
40,554
|
|
|||||
Deferred tax valuation allowance
|
|
14,274
|
|
|
23
|
|
|
(9,004
|
)
|
|
—
|
|
|
|
|
5,293
|
|
|||||
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
13,026
|
|
|
$
|
19,758
|
|
|
$
|
384
|
|
|
$
|
(20,041
|
)
|
|
(1)
|
|
$
|
13,127
|
|
Sales return accrual
|
|
37,354
|
|
|
652,842
|
|
|
—
|
|
|
(650,633
|
)
|
|
|
|
39,563
|
|
|||||
Deferred tax valuation allowance
|
|
17,242
|
|
|
(26
|
)
|
|
(2,942
|
)
|
|
—
|
|
|
|
|
14,274
|
|
(1)
|
Write-off of uncollectible accounts receivable
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as part of this report:
|
1.
|
Financial Statements.
|
2.
|
Financial Statement Schedules.
|
3.
|
Exhibits.
|
Exhibit No.
|
|
Description of Document
|
|
Method of Filing
|
3.1
|
|
Amended and Restated Certificate of Incorporation of HSN, Inc.
|
|
Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 25, 2008
|
|
|
|
||
3.2
|
|
Amended and Restated By-laws of HSN, Inc.
|
|
Exhibit 3.2 to the Company’s Current Report on Form 8-K filed August 25, 2008
|
|
|
|
||
3.3
|
|
Certificate of Designations, Preferences and Rights to Series A Junior Participating Preferred Stock
|
|
Exhibit 3.3 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
|
|
|
||
4.1
|
|
Rights Agreement, dated as of December 23, 2008, between HSN, Inc. and The Bank of New York Mellon, as Rights Agent.
|
|
Exhibit 4.1 to the Company’s Current Report on Form 8-K filed December 29, 2008
|
|
|
|
||
4.2
|
|
Indenture, dated as of July 28, 2008, between HSN, Inc., as Issuer, and the Bank of New York Mellon, as Trustee
|
|
Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (Registration No. 333-152697) filed August 1, 2008
|
|
|
|
||
4.3
|
|
First Supplemental Indenture, dated as of August 20, 2008, between HSN, Inc., as Issuer, and The Bank of New York Mellon, as Trustee
|
|
Exhibit 4.1 to the Company’s Current Report on Form 8-K filed August 25, 2008
|
|
|
|
||
4.4
|
|
Second Supplemental Indenture dated as of January 1, 2010 between HSN, Inc., as Issuer, and The Bank of New York Mellon, as Trustee
|
|
Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed August 4, 2010
|
|
|
|
|
|
4.5
|
|
Third Supplemental Indenture, dated as of April 19, 2012, among HSN, Inc., as Issuer, the Guarantors listed on Appendix I and Appendix II, and The Bank of New York Mellon Trust Company, N.A., as Trustee
|
|
Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed May 2, 2012
|
|
|
|
||
10.1
|
|
Separation and Distribution Agreement, dated August 20, 2008, by and among HSN, Inc., Interval Leisure Group, Inc., Ticketmaster, Tree.com, Inc. and IAC/InterActiveCorp
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 25, 2008
|
|
|
|
||
10.2
|
|
Tax Sharing Agreement, dated August 20, 2008, among HSN, Inc., Interval Leisure Group, Inc., Ticketmaster, Inc., Tree.com and IAC/InterActive Corp
|
|
Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 25, 2008
|
|
|
|
|
|
10.3
|
|
Employee Matters Agreement, dated August 20, 2008, among HSN, Inc., Interval Leisure Group, Inc., Ticketmaster, Tree.com, Inc. and IAC/InterActiveCorp
|
|
Exhibit 10.3 to the Company’s Current Report on Form 8-K filed August 25, 2008
|
|
|
|
|
|
Exhibit No.
|
|
Description of Document
|
|
Method of Filing
|
10.4
|
|
Registration Rights Agreement, dated as of August 20, 2008, among Liberty Media Corporation, the Liberty Parties (as defined in the Agreement) and HSN, Inc.
|
|
Exhibit 10.5 to the Company’s Current Report on Form 8-K filed December 29, 2008
|
|
|
|
||
10.5
|
|
Spinco Assignment and Assumption Agreement, dated as of August 20, 2008, by and among IAC/InterActive Corp, HSN, Inc., Liberty Media Corporation and Liberty USA Holdings, LLC
|
|
Exhibit 10.6 to the Company’s Current Report on Form 8-K filed August 25, 2008
|
|
|
|
||
10.6
|
|
Spinco Agreement, dated as of May 13, 2008, between IAC/InterActiveCorp, Liberty Media Corp., LMC Silver King, Inc., Liberty HSN II, Inc., LMC USA VIII, Inc., LMC USA IX, Inc., LMC USA XI, Inc., LMC USA XII, Inc., LMC USA XIII, Inc., LMC USA XIV, Inc., LMC USA XV, Inc., Liberty Tweety, Inc., BDTV Inc., BDTV II Inc., BDTV III Inc., BDTV IV Inc. and Barry Diller
|
|
Exhibit 10.1 to IAC/InterActiveCorp’s Current Report on Form 8-K (SEC File No. 0-20570) dated May 16, 2008 and incorporated herein by reference
|
|
|
|
||
10.7
|
|
Credit Agreement dated as of April 24, 2012, among HSN, Inc., as Borrower; Bank of America, N.A., as Administrative Agent and Collateral Agent; JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, and Barclays Bank PLC, each as a Syndication Agent; Branch Banking & Trust, Regions Bank, and Union Bank, each as a Documentation Agent; and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Wells Fargo Securities, LLC and Barclays Bank PLC, as Joint Lead Arrangers and Joint Book Managers
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 25, 2012
|
|
|
|
|
|
10.8
|
|
Pledge Agreement dated as of April 24, 2012, by the Credit Parties (as defined in the New Credit Agreement) and Bank of America, N.A., as Collateral Agent
|
|
Exhibit 10.2 to the Company’s Current Report on Form 8-K filed April 25, 2012
|
|
|
|
|
|
10.9
|
|
Credit Agreement among HSN, Inc., as Borrower, Certain Subsidiaries of the Borrower, as Guarantors, The Lenders Party thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent, dated as of July 25, 2008
|
|
Exhibit 10.12 to the Company’s Registration Statement on Form S-1 (Registration No. 333-152697) filed August 1, 2008
|
|
|
|
|
|
10.10
|
|
Employment Agreement between Mindy Grossman and HSN, Inc., dated as of July 29, 2008*
|
|
Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (Registration No. 333-152697) filed August 1, 2008
|
|
|
|
|
|
10.11
|
|
First Amendment to Employment Agreement between Mindy Grossman and HSN, Inc., dated as of August 5, 2010*
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 9, 2010
|
|
|
|
|
|
10.12
|
|
HSN, Inc. Amended and Restated 2008 Stock and Annual Incentive Plan*
|
|
Exhibit 10.13 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
|
|
|
||
10.13
|
|
HSN, Inc. Second Amended and Restated 2008 Stock and Annual Incentive Plan*
|
|
Filed herewith
|
|
|
|
||
10.14
|
|
Amended and Restated Deferred Compensation Plan for Non-Employee Directors*
|
|
Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
|
|
|
||
10.15
|
|
Form of Stock Appreciation Rights Agreement*
|
|
Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
*
|
Reflects management contracts and management and director compensation plans.
|
|
|
Exhibit No.
|
|
Description of Document
|
|
Method of Filing
|
10.16
|
|
Form of Stock Option Agreement*
|
|
Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
|
|
|
||
10.17
|
|
Form of Restricted Stock Units Agreement*
|
|
Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
|
|
|
||
10.18
|
|
Form of Restricted Stock Units Agreement (for Non-Employee Directors)*
|
|
Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
|
|
|
||
10.19
|
|
Form of Deferred Restricted Stock Unit Agreement*
|
|
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed November 6, 2013
|
|
|
|
||
10.20
|
|
Named Executive Officer and EVP Severance Plan*
|
|
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 24, 2009
|
|
|
|
||
10.21
|
|
Executive Severance Plan*
|
|
Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed March 4, 2010
|
|
|
|
||
10.22
|
|
Form of Performance Cash Award Agreement*
|
|
Exhibit 10.21 to the Company's Annual Report on Form 10-K filed February 21, 2013
|
|
|
|
||
10.23
|
|
Employee Stock Purchase Plan
|
|
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed August 4, 2010
|
|
|
|
||
10.24
|
|
Form of Deferred Share Unit Agreement*
|
|
Exhibit 10.23 to the Company's Annual Report on Form 10-K filed February 23, 2012
|
|
|
|
||
10.25
|
|
Form of Performance Award Agreement*
|
|
Exhibit 10.24 to the Company's Annual Report on Form 10-K filed February 21, 2013
|
|
|
|
|
|
10.26
|
|
Form of Market Stock Unit Agreement*
|
|
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed November 6, 2013
|
|
|
|
|
|
10.27
|
|
HSN, Inc. Nonqualified Deferred Compensation Plan
|
|
Filed herewith
|
|
|
|
|
|
12.1
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
Filed herewith
|
|
|
|
||
14.1
|
|
Code of Ethics and Business Conduct
|
|
Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed March 31, 2009
|
|
|
|
||
21.1
|
|
Subsidiaries of HSN, Inc.
|
|
Filed herewith
|
|
|
|
||
23.1
|
|
Consent of Independent Registered Certified Public Accounting Firm
|
|
Filed herewith
|
|
|
|
||
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
Filed herewith
|
|
|
|
||
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
Filed herewith
|
|
|
|
||
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
|
|
Filed herewith
|
|
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
|
|
Filed herewith
|
*
|
Reflects management contracts and management and director compensation plans.
|
Exhibit No.
|
|
Description of Document
|
|
Method of Filing
|
101
|
|
The following financial information from HSNi’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Consolidated Statements of Operations for the Years Ended December 31, 2013, 2012, and 2011, (ii) Consolidated Balance Sheets as of December 31, 2013 and 2012, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012, and 2011, (v) Notes to the Consolidated Financial Statements, and (vi) financial statement schedule.
|
|
|
|
|
|
|
HSN, INC.
|
||
|
|
|
|
|
|
|
Date: February 20, 2014
|
|
|
|
By:
|
|
/S/ Mindy Grossman
|
|
|
|
|
|
|
Mindy Grossman,
Chief Executive Officer
(Principal Executive Officer)
|
Date: February 20, 2014
|
|
|
|
By:
|
|
/S/ Judy A. Schmeling
|
|
|
|
|
|
|
Judy A. Schmeling,
Chief Financial Officer and Chief Operating Officer
(Principal Financial and Accounting Officer)
|
/S/ Mindy Grossman
|
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
Mindy Grossman
|
|
|
|
|
|
|
|
|
|
/S/ Judy A. Schmeling
|
|
|
Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer)
|
|
Judy A. Schmeling
|
|
|
|
|
|
|
|
|
|
/S/ William Costello
|
|
|
||
William Costello
|
|
|
|
Director
|
|
|
|
|
|
/S/ James Follo
|
|
|
||
James Follo
|
|
|
|
Director
|
|
|
|
|
|
/S/ Stephanie Kugelman
|
|
|
||
Stephanie Kugelman
|
|
|
|
Director
|
|
|
|
|
|
/S/ Arthur Martinez
|
|
|
||
Arthur Martinez
|
|
|
|
Chairman of the Board of Directors
|
|
|
|
|
|
/S/ Thomas McInerney
|
|
|
||
Thomas McInerney
|
|
|
|
Director
|
|
|
|
|
|
/S/ John B. Morse, Jr.
|
|
|
||
John B. Morse, Jr.
|
|
|
|
Director
|
|
|
|
|
|
/S/ Matthew Rubel
|
|
|
||
Matthew Rubel
|
|
|
|
Director
|
|
|
|
|
|
/S/ Ann Sarnoff
|
|
|
||
Ann Sarnoff
|
|
|
|
Director
|
|
|
|
|
|
/S/ Courtnee Ulrich
|
|
|
||
Courtnee Ulrich
|
|
|
|
Director
|
Exhibit No.
|
|
Description of Document
|
|
10.13
|
|
|
HSN, Inc. Second Amended and Restated 2008 Stock and Annual Incentive Plan
|
|
|
||
10.27
|
|
|
HSN, Inc. Nonqualified Deferred Compensation Plan
|
|
|
||
12.1
|
|
|
Computation of Ratio of Earnings to Fixed Charges
|
|
|
||
21.1
|
|
|
Subsidiaries of HSN, Inc.
|
|
|
||
23.1
|
|
|
Consent of Independent Registered Certified Public Accounting Firm
|
|
|
||
31.1
|
|
|
Chief Executive Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
||
31.2
|
|
|
Chief Financial Officer Certification Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
||
32.1
|
|
|
Certification of Chief Executive Officer pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
||
32.2
|
|
|
Certification of Chief Financial Officer pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
||
101
|
|
|
The following financial information from HSNi’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language) and filed electronically herewith: (i) Consolidated Statements of Operations for the Years Ended December 31, 2013, 2012, and 2011, (ii) Consolidated Balance Sheets as of December 31, 2013 and 2012, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012, and 2011, (v) Notes to the Consolidated Financial Statements, and (vi) financial statement schedule.
|
ARTICLE
I GENERAL PROVISIONS
|
1
|
1.1
|
Purpose. 1
|
1.2
|
Effective Date. 1
|
1.3
|
Company and Employers. 1
|
1.4
|
Plan Year. 1
|
1.5
|
Definitions and Rules of Construction. 1
|
ARTICLE II ELIGIBILITY AND BENEFITS
|
6
|
2.1
|
Eligibility 6
|
2.2
|
Elective Deferrals. 6
|
2.3
|
Employer Contributions. 9
|
2.4
|
Earnings. 9
|
2.5
|
Vesting. 10
|
ARTICLE III PAYMENT OF BENEFITS
|
11
|
3.1
|
Time and Form of Payment. 11
|
3.2
|
Specified Date Distributions. 12
|
3.3
|
Change in Control. 13
|
3.4
|
Withdrawals for Unforeseeable Emergencies. 13
|
3.5
|
Distribution upon Death.. 13
|
3.6
|
Source of Payment. 13
|
3.7
|
Establishment of Trust. 13
|
3.8
|
Withholding and Payroll Taxes. 14
|
3.9
|
Payment on Behalf of Disabled or Incompetent Persons. 14
|
3.10
|
Missing Participants or Beneficiaries. 14
|
ARTICLE IV ADMINISTRATION
|
15
|
4.1
|
Plan Administrator. 15
|
4.2
|
Administrator’s Powers. 15
|
4.3
|
Binding Effect of Rulings.. 16
|
4.4
|
Claims Procedure. 16
|
4.5
|
Payment of Expenses. 18
|
4.6
|
Indemnity.. 18
|
ARTICLE V AMENDMENT AND TERMINATION OF PLAN
|
19
|
5.1
|
Amendment. 19
|
5.2
|
Termination. 19
|
ARTICLE VI MISCELLANEOUS
|
20
|
6.1
|
Status of Plan. 20
|
6.2
|
Nonassignability. 20
|
6.3
|
No Contract of Employment. 20
|
6.4
|
Participant Litigation.. 20
|
6.5
|
Participant and Beneficiary Duties. 21
|
6.6
|
Governing Law.. 21
|
6.7
|
Validity. 21
|
6.8
|
Notices. 21
|
6.9
|
Successors.
21
|
ARTICLE I
|
|
(i)
|
The Deferred Account shall include the amounts deferred by the Participant pursuant to Section 2.2 and the income attributable thereto.
|
(ii)
|
The Employer Account shall include any amounts credited to the Participant pursuant to Section 2.3 and the income attributable thereto.
|
(iii)
|
The Specified Date Distribution Account shall include any amount with respect to which the Participant makes a specified date distribution election pursuant to Section 3.2 and the income attributable thereto.
|
(i)
|
The acquisition by any individual, entity or Group (a “Person”), other than the Company, of Beneficial Ownership of equity securities of the Company representing more than 50% of the voting power of the then outstanding equity securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that any acquisition that would constitute a Change in Control under this subsection (i) that is also a Business Combination shall be determined exclusively under subsection (iii) below; or
|
(ii)
|
Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the Incumbent Directors at such time shall become an Incumbent Director, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
|
(iii)
|
Consummation of a reorganization, merger, consolidation, sale or other disposition of all or substantially all of the assets of the Company, the purchase of assets or stock of another entity, or other similar corporate transaction (a “Business Combination”), in each case, unless immediately following such Business Combination, (A) more than 50% of the Resulting Voting Power shall reside in Outstanding Company Voting Securities retained by the Company’s stockholders in the Business Combination and/or voting securities received by such stockholders in the Business Combination on account of Outstanding Company Voting Securities, and (B) at least a majority of the members of the board of directors (or equivalent governing body, if applicable) of the entity resulting from such Business Combination were Incumbent Directors at the time of the initial agreement, or action of the Board, providing for such Business Combination; or
|
(iv)
|
Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company
|
(i)
|
An Employee who is on an approved leave of absence shall not incur a Separation from Service unless he/she fails to return to employment at the end of such leave of absence; provided that either (i) the leave of absence is of not more than six months in duration, or (ii) the Participant has a legal or contractual right to reemployment at the end of the leave of absence. The Separation from Service of such an Employee will occur when he/she fails to return.
|
(ii)
|
Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Employer or Affiliate and Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Employee will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Employer or Affiliate if the Employee has been providing services to the Employer or Affiliate less than 36 months).
|
(iii)
|
An Employee who is transferred to the employ of an Affiliate, shall no longer be an Active Participant but shall not have incurred a Separation from Service for purposes of distribution of his/her Account until his/her employment is terminated by all Employers and Affiliates.
|
(iv)
|
An Employee who terminates his/her employment with all Employers and Affiliates, but continues to render services to any Employer or Affiliate in a capacity other than as an Employee (other than solely as a member of a board of directors), will incur a Separation from Service only when all arrangements for the provision of services to all Employers and Affiliates have been terminated.
|
(i)
|
An Active Participant may elect to defer any whole percentage of each payment of his/her Base Salary during the Plan Year up to a maximum of 75 percent, provided that the maximum amount deferred from each payment shall not exceed the net amount of such payment after all legally required withholding and the minimum total amount deferred for each Plan Year shall not be less than $2,000.
|
(ii)
|
An Active Participant may elect to defer any whole percentage, or a whole percentage of the excess over a specified dollar amount, of his/her Annual Bonus for the Plan Year up to a maximum of 100 percent, provided that the maximum amount deferred from shall not exceed the net amount of such payment after all legally required withholding and the minimum total amount deferred for each Plan Year shall not be less than $2,000.
|
(iii)
|
The Administrator may permit Active Participants to make Deferral Elections that will apply only to the extent that the Active Participant’s deferral contributions to the 401(k) Plan are limited by one or more provisions of the Code, subject to Section 2.2(f).
|
(i)
|
Except as otherwise provided below, all Deferral Elections must be made not later than the last day of the Plan Year immediately preceding the Plan Year in which the Base Salary or Annual Bonus begins to be earned. For this purpose, a Participant’s Annual Bonus begins to be earned on the first day of the applicable performance period.
|
(ii)
|
If the Administrator determines that an Active Participant’s Annual Bonus constitutes “performance based compensation” as defined in §409A, the Administrator may permit the Active Participant to make a Deferral Election with respect to the Annual Bonus not later than six months prior to the last day of the performance period. An Active Participant’s Annual Bonus shall not fail to qualify as performance based compensation solely by reason of the fact that the Active Participant may be entitled, under the terms of an employment agreement or otherwise, to receive a portion of his/her Annual Bonus without regard to whether the performance criteria are satisfied by reason of death, disability, or change in control event as defined in §409A, provided that if the Active Participant becomes entitled to a portion of his/her Annual Bonus by reason of such circumstances his/her Deferral Election shall be void.
|
(iii)
|
An Employee who first becomes eligible to participate in the Plan (or any other Aggregated Plan) during a Plan Year, may make a Deferral Election not more than thirty (30) days after becoming eligible, which election shall apply prospectively only. If the Active Participant is eligible to receive an Annual Bonus for such Plan Year, such Deferral Election shall apply only to the portion of his/her Annual Bonus attributable to the period after the election is made, determined by daily proration. For this purpose, an Employee who has previously participated in the Plan, or an Aggregated Plan, shall be treated as being eligible for the first time if either all benefits under the Plan or Aggregated Plan were previously distributed to him/her and he/she was not eligible to participate immediately following such distribution, or if he/she ceased to be eligible to participate in the Plan or such Aggregated Plan other than through accrual of earnings at least 24 months prior to the date on which he/she again becomes eligible.
|
|
HSN, INC.
By:__________________________________
Lisa A. Letizio
Chief Human Resources Officer
|
|
|
HSN, Inc.
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Computation of Ratio of Earnings to Fixed Charges
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
|
|
|
(unaudited)
|
||||||||||||||||||
|
|
|
|
(In thousands, except ratios)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
|
$
|
276,141
|
|
|
$
|
219,870
|
|
|
$
|
207,758
|
|
|
$
|
166,618
|
|
|
$
|
128,512
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense (a)
|
|
6,718
|
|
|
20,811
|
|
|
31,963
|
|
|
33,124
|
|
|
35,373
|
|
|||||||
Estimated interest portion of rental expense
|
|
7,614
|
|
|
7,301
|
|
|
6,860
|
|
|
6,788
|
|
|
6,791
|
|
|||||||
|
|
Total fixed charges
|
|
14,332
|
|
|
28,112
|
|
|
38,823
|
|
|
39,912
|
|
|
42,164
|
|
|||||
|
|
Income from continuing operations before income taxes and fixed charges
|
|
$
|
290,473
|
|
|
$
|
247,982
|
|
|
$
|
246,581
|
|
|
$
|
206,530
|
|
|
$
|
170,676
|
|
Ratio of earnings to fixed charges
|
|
20.3
|
|
|
8.8
|
|
|
6.4
|
|
|
5.2
|
|
|
4.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Note:
|
The Ratio of Earnings to Fixed Charges should be read in conjunction with the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K.
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(a)
|
|
Includes interest on debt and amortization of debt issuance costs. Excludes interest income and interest associated with unrecognized tax benefits, which is recorded within income tax expense.
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Name
|
|
Jurisdiction of Organization
|
AST Sub, Inc.
|
|
DE
|
Ballard Designs, Inc.
|
|
GA
|
Chasing Fireflies, LLC
|
|
DE
|
Cinmar, LLC
|
|
DE
|
Contract Décor, Inc.
|
|
DE
|
Cornerstone Brands, Inc.
|
|
DE
|
Cornerstone Services, Inc.
|
|
DE
|
Frontgate Marketing, Inc.
|
|
DE
|
Garnet Hill, Inc.
|
|
NH
|
H.O.T. Networks Holdings (Delaware) LLC
|
|
DE
|
Home Shopping Network En Espanol, L.P.
|
|
DE
|
Home Shopping Network En Espanol, L.L.C.
|
|
DE
|
HSN Catalog Services, Inc.
|
|
DE
|
HSN Fulfillment LLC
|
|
DE
|
HSN Holding LLC
|
|
DE
|
HSN Improvements LLC
|
|
DE
|
HSN Interactive LLC
|
|
DE
|
HSNi, LLC
|
|
DE
|
HSN of Nevada LLC
|
|
DE
|
HSN Realty LLC
|
|
DE
|
Ingenious Designs LLC
|
|
DE
|
NLG Merger Corp.
|
|
DE
|
S&N Operations, LLC
|
|
DE
|
The Cornertone Brands Group, Inc.
|
|
DE
|
The Cornerstone Holdings Group, Inc.
|
|
DE
|
TTA Operations, Inc.
|
|
DE
|
TravelSmith Outfitters, Inc.
|
|
CA
|
Ventana Television Holdings, Inc.
|
|
DE
|
Ventana Television, Inc.
|
|
DE
|
H.O.T. Home Order Television Belgium S.A.
|
|
Belgium
|
Home Shopping Espanol (Mexico) S. De. R.L. De. CV
|
|
Mexico
|
Home Shopping Espanol Servicios (Mexico) S. De. R.L. De. CV
|
|
Mexico
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of HSN, Inc.;
|
2.
|
Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
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Date: February 20, 2014
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By:
/s/ Mindy Grossman
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Date: February 20, 2014
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By:
/s/ Mindy Grossman
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1.
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I have reviewed this Annual Report on Form 10-K of HSN, Inc.;
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2.
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Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
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Date: February 20, 2014
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By:
/s/ Judy A. Schmeling
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Date: February 20, 2014
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By:
/s/ Judy A. Schmeling
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