Home Shopping Network 2008 Annual Report Download - page 54

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HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
51
The balance of property and equipment, net, is as follows (in thousands):
2008
2007
$ 185,107 $ 169,709
87,757 81,821
77,857 72,815
60,910 58,058
16,370 19,572
11,740 11,778
439,741 413,753
(281,909) (257,948)
157,832$ 155,805$
Projects in progress
Computer and broadcast equipment
Total property and equipment, net
Less: accumulated depreciation and amortization
Land
Furniture and other equipment
Buildings and leasehold improvements
December 31,
Capitalized software
NOTE 5—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
2008 2007
Accrued sales returns 37,340$ $ 37,596
Accrued cable and satellite distribution fees 17,857 32,637
Accrued freight and fulfillment expenses
21,966
25,624
Accrued compensation and benefits 15,296 15,502
Other accrued expenses and current liabilities 87,178 76,953
Total accrued expenses and other current liabilities $ 179,637 $ 188,312
December 31,
NOTE 6—SEGMENT INFORMATION
HSNi has determined to represent its operating segments and related financial information in a manner
consistent with how the chief operating decision maker and executive management view the businesses, how the
businesses are organized as to segment management, and the focus of the businesses with regards to the types of
products or services offered or the target market. HSNi has two operating segments, HSN and Cornerstone. Entities
included in discontinued operations, as described in Note 7, are excluded from the schedules below. The accounting
policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies.
Intercompany accounts and transactions have been eliminated in consolidation.
HSNi's primary metric is Adjusted EBITDA, which is defined as operating income excluding, if applicable:
(1) non-cash compensation expense and amortization of non-cash marketing, (2) amortization of intangibles,
(3) depreciation and gains and losses on asset dispositions, (4) goodwill, long-lived asset and intangible asset
impairments, (5) pro forma adjustments for significant acquisitions, and (6) one-time items. Adjusted EBITDA is
not a measure determined in accordance with GAAP, and should not be considered a substitute for operating
income, net income or any other measure determined in accordance with GAAP. Adjusted EBITDA is used as a
measurement of operating efficiency and overall financial performance and we believe it to be a helpful measure for
those evaluating companies in the retail industry. Adjusted EBITDA measures the amount of income generated
each period that could be used to service debt, pay taxes and fund capital expenditures. Adjusted EBITDA should
not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Adjusted EBITDA has certain limitations in that it does not take into account the impact to HSNi's statement of