Home Shopping Network 2011 Annual Report Download - page 51

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HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
operating expenses in the line item “General and administrative” in the accompanying consolidated statements of
operations. See Note 3 for a discussion of this impairment charge.
The fair value of the property and equipment of one of the Cornerstone brands, consisting principally of
leasehold improvements, was assessed during the year ended December 31, 2011. The fair value was determined
using discounted future cash flows (level 3 criteria). Key inputs used in this calculation included revenue growth,
operating expenses and a discount rate that HSNi believed a buyer would assume when determining a purchase
price for the assets. The fair value adjustment of $0.8 million is included in operating expenses in the line item
“General and administrative” in the accompanying consolidated statements of operations. See Note 4 for a
discussion of this impairment charge.
NOTE 8—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, 2011, 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’s deferrals. HSNi’s matching contribution was
$2.1 million, $1.4 million and $0.8 million for the years ended December 31, 2011, 2010 and 2009, respectively.
NOTE 9—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 HSNi’s earnings.
Basic Earnings Per Share
For the years ended December 31, 2011, 2010 and 2009, basic earnings per share was computed using the
number of weighted average shares of common stock outstanding for the period.
Diluted Earnings Per Share
For the years ended December 31, 2011, 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
HSNi 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.
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