Home Shopping Network 2010 Annual Report Download - page 55

Download and view the complete annual report

Please find page 55 of the 2010 Home Shopping Network annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 89

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89

Table of Contents
HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair value of the senior notes was based upon quoted market information (level 1 criteria) and the fair value of the term loan was based
upon discounted future cash flows (level 3 criteria).
HSNi measures certain assets, such as intangible assets and property and equipment, at fair value on a non-
recurring basis. These assets are
recognized at fair value if they are deemed to be impaired. During the year ended December 31, 2010, there were no assets that were required to
be recorded at fair value since no impairment indicators were present.
NOTE 9—RETIREMENT AND SAVINGS PLAN
Effective December 31, 2008, HSNi established the HSN, Inc. Retirement Savings Plan that qualifies under Section 401(k) of the Internal
Revenue Code. Participating employees may contribute up to 50% of their pretax salary, up to the statutory limits. From the period of April 1,
2010 through December 31, 2010, HSNi contributed twenty five cents for each dollar a participant contributed in this plan of the first 6% of a
participant’s deferrals. From the period of January 1, 2009 through March 31, 2010, HSNi contributed ten cents for each dollar a participant
contributed in this plan of the first 6% of a participant deferrals. For the year ended December 31, 2008, HSNi’s employees continued to be
eligible to participate in IAC’s retirement and savings plan in the U.S. that qualifies under Section 401(k) of the Internal Revenue Code. For the
year ended December 31, 2008, HSNi contributed fifty cents for each dollar a participant contributed in this plan of the first 6% of a participant
’
s
deferrals. HSNi’
s matching contribution was $1.4 million, $0.8 million and $4.2 million for the years ended December 31, 2010, 2009 and 2008,
respectively.
NOTE 10—EARNINGS PER SHARE
HSNi computes basic earnings per share using the weighted average number of common shares outstanding for the period. HSNi computes
diluted earnings per share using the treasury stock method, which includes the weighted average number of common shares outstanding for the
period plus the potential dilution that could occur if various equity awards to issue common stock were exercised or restricted equity awards
were vested resulting in the issuance of common stock that could share in our earnings.
Basic Earnings Per Share
For the years ended December 31, 2010 and 2009, basic earnings per share was computed using the number of weighted average shares of
common stock outstanding for the period.
For the year ended December 31, 2008, basic earnings per share was computed using the number of shares of common stock outstanding
immediately following the spin-off, as if such shares were outstanding for the entire period prior to the spin-off, plus the weighted average
number of such shares outstanding following the spin-off date through December 31, 2008.
Diluted Earnings Per Share
For the years ended December 31, 2010 and 2009, diluted earnings per share was computed using the number of shares of common stock
outstanding for the year and, if dilutive, the incremental common stock that we would issue upon the assumed exercise of stock options and
stock appreciation rights and the vesting of restricted stock units using the treasury stock method.
56