Home Shopping Network 2010 Annual Report Download - page 51

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Table of Contents
HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following (in thousands):
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 – Discontinued Operations, 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 charges
including: (a) stock-based compensation expense, (b) amortization of non-cash marketing, (c) amortization of intangibles, (d) depreciation and
gains and losses on asset dispositions, and (e) goodwill, long-lived asset and intangible asset impairments; (2) pro forma adjustments for
significant acquisitions; and (3) one-time items. Adjusted EBITDA is not a measure determined in accordance with GAAP, and should not be
considered in isolation or as 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 HSNi believes it to be a helpful measure for
those evaluating companies in the retail and media industries. 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 has certain limitations in that it does not take into
account the impact to HSNi’s consolidated statements of operations of certain expenses, including stock-based compensation, amortization of
non-cash marketing, amortization of intangibles, depreciation, gains and losses on asset dispositions, asset impairment charges, acquisition-
related accounting and one-time items.
52
December 31,
2010
2009
Accrued sales returns
$
37,354
$
39,424
Accrued cable and satellite related fees
30,442
37,915
Accrued freight and fulfillment expenses
18,241
15,366
Accrued compensation and benefits
34,692
36,029
Income tax payable
9,989
26,982
Other accrued expenses and current liabilities
85,396
67,023
Total accrued expenses and other current liabilities
$
216,114
$
222,739