Home Shopping Network 2008 Annual Report Download - page 72

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HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
69
shares of HSNi common stock received by the Liberty Parties as a result of the spin-off and other shares of HSNi
common stock acquired by the Liberty Parties consistent with the Spinco Agreement (collectively, the “Registrable
Shares”). The Holders will be permitted to exercise their registration rights in connection with certain hedging
transactions that they may enter into in respect of the Registrable Shares.
HSNi will be obligated to indemnify the Holders, and each selling Holder will be obligated to indemnify
HSNi, against specified liabilities in connection with misstatements or omissions in any registration statement.
NOTE 17—SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental Disclosure of Non-Cash Transactions for 2007
On June 19, 2007, in consideration for the sale of HSE to Arcandor AG ("ARO"), formerly known as
KarstadtQuelle AG, HSNi received approximately 5.5 million shares of ARO stock valued at €141 million (the
"ARO Shares"), plus additional consideration in the form of a contingent value right, that has a value of up to
€54 million within three years. In accordance with the terms of the spin-off, the ARO Shares and the contingent
value right were transferred to IAC in 2007. This transfer totaled approximately $217.2 million, of which
$190.1 million related to the ARO Shares and $27.1 million related to the contingent value right, and is included in
"Net transfers to IAC" in the accompanying consolidated statements of shareholders’ equity.
Supplemental Disclosure of Cash Flow Information:
2008
2007
2006
Cash paid during the period for:
Income tax payments including amounts paid to IAC for
HSNi's share of IAC's consolidated tax liability in periods
prior to the spin-off
$ 15,671
$ 84,516
$ 94,383
Income tax refunds
(643)
(761)
(3,176)
Interest payments
3,064 - -
Years Ended December 31,
NOTE 18—SHAREHOLDERS’ EQUITY
Stockholder Rights Plan
In December 2008, the Company’s Board of Directors approved the creation of a Series A Junior
Participating Preferred Stock, adopted a stockholders rights plan and declared a dividend of one right for each
outstanding share of common stock held by our stockholders of record as of the close of business on January 5,
2009. The rights will attach to any additional shares of common stock issued after January 5, 2009. Initially, these
rights, which will trade with the shares of our common stock, will not be exercisable. Under the rights plan, these
rights will be exercisable if a person or group acquires or commences a tender or exchange offer for 15% or more of
our common stock. If the rights become exercisable, each right will permit its holder, other than the “acquiring
person,” to purchase from us shares of common stock at a 50% discount to the then prevailing market price. As a
result, the rights will cause substantial dilution to a person or group that becomes an “acquiring person” on terms not
approved by our Board of Directors.