Home Shopping Network 2008 Annual Report Download - page 33

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30
Net cash used in discontinued operations in 2008 and 2007 of $.5 million and $48.5 million, respectively,
relates primarily to the operations of HSN International and HSE. HSNi does not expect future cash flows associated
with existing discontinued operations to be material.
HSNi anticipates that it will need to make capital and other expenditures in connection with the
development and operation of its business. HSNi’s ability to fund its cash and capital needs will be affected by its
ongoing ability to generate cash from operations, the overall capacity and terms of its financing arrangements as
discussed above, and access to the capital markets. HSNi believes that its cash on hand, its anticipated operating
cash flows, its available unused portion of the revolving credit facility and its access to capital markets will be
sufficient to fund its operating needs, capital, investing and other commitments and contingencies for the foreseeable
future.
Contractual Obligations and Commercial Commitments
Contractual Obligations
Total
Amounts
Committed Less Than 1
Year 1 - 3 Years 3 - 5 Years More Than
5 Years
Short- and long-term obligations $ 410,000 $ 15,000 $ 52,500 $ 102,500 $ 240,000
Operating leases 125,697 30,272 43,481 24,707 27,237
Purchase obligations (a) 221,289 109,057 112,232 - -
Total commercial commitments 756,986$ 154,329$ 208,213$ 127,207$ 267,237$
Payments Due by Period
(In thousands)
(a) The purchase obligations primarily relate to contracts with pay television operators and include obligations for
future cable distribution and commission guarantees.
Other Commercial Commitments
Total
Amounts
Committed Less Than 1
Year 1 - 3 Years 3 - 5 Years More Than
5 Years
Letters of credit and surety bonds (b) $ 17,926 $ 17,876 $ 50 $ - $ -
Amount of Commitment Expiration Per Period
(In thousands)
(b) 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.
At December 31, 2008, we have $0.5 million recorded for uncertain tax positions under FIN 48. We are
not able to reasonably estimate the timing of payments, or the amount by which our liability will increase or
decrease over time; therefore, the FIN 48 liability of $0.5 million has not been included in the contractual
obligations table above.
Off-Balance Sheet Arrangements
Other than the items described above, HSNi does not have any off-balance sheet arrangements as of
December 31, 2008.
Seasonality
Historically, seasonality impacts HSNi, with revenue highest in the fourth quarter, but not to the same
extent it impacts the retail industry in general.