Home Shopping Network 2011 Annual Report Download - page 52

HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents HSNi’s basic and diluted earnings per share (in thousands, except per share
data):
Year Ended December 31,
2011 2010 2009
Net income $123,070 $98,523 $72,488
Weighted average number of shares outstanding:
Basic ........................................................ 58,636 57,414 56,383
Dilutive effect of stock-based compensation awards ................... 2,053 2,132 947
Diluted ...................................................... 60,689 59,546 57,330
Net income per share:
Basic ........................................................ $ 2.10 $ 1.72 $ 1.29
Diluted ...................................................... $ 2.03 $ 1.65 $ 1.26
Unexercised employee stock options and stock appreciation rights and unvested
restricted stock units excluded from the diluted EPS calculation because their
effect would have been antidilutive .................................. 911 1,632 4,372
NOTE 10—LONG-TERM DEBT
December 31,
2011 2010
Secured credit agreement expiring July 25, 2013:
Term loan ........................................................... $ — $ 69,841
Revolving credit facility ................................................ — —
11.25% Senior Notes due August 1, 2016; interest payable each February 1 and August 1
commencing February 1, 2009 ............................................. 240,000 240,000
Unamortized original issue discount on Senior Notes ............................. (889) (1,083)
Total long-term debt ....................................................... 239,111 308,758
Less: current maturities ..................................................... — (5,820)
Long-term debt, net of current maturities ....................................... $239,111 $302,938
On July 25, 2008, HSNi entered into a secured credit agreement with a syndicate of banks relating to a
$150 million term loan and a $150 million revolving credit facility, each having a five year maturity. Certain
HSNi subsidiaries have unconditionally guaranteed HSNi's obligation under the credit agreement, which is
secured by substantially all of HSNi’s assets. The credit agreement contains two principal financial covenants,
each as defined in the credit agreement, consisting of a maximum leverage ratio of 2.75x and a minimum interest
coverage ratio of 3.00x, among other covenants. HSNi was in compliance with all such covenants as of
December 31, 2011, with a leverage ratio of 0.82x and an interest coverage ratio of 10.38x. The amount available
to us under the credit agreement is reduced by the amount of commercial and standby letters of credit issued
under the revolving credit facility portion of the agreement. As of December 31, 2011, there were $31.0 million
of outstanding commercial and standby letters of credit issued under the revolving credit facility. The ability to
draw funds under the revolving credit facility is dependent upon meeting the aforementioned financial covenants,
which may limit HSNi’s ability to draw the full amount of the facility. As of December 31, 2011, the additional
amount that could be borrowed under the revolving credit facility, in consideration of the financial covenants,
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