Home Shopping Network 2011 Annual Report Download - page 53

HSN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
was approximately $119.0 million. HSNi capitalized $7.3 million in financing costs related to the credit
agreement and HSNi is amortizing these costs to interest expense over the credit agreement's five-year life. The
annual fee to maintain the revolving credit facility is 50 basis points on the revolving credit facility portion of the
credit agreement. In October 2011, HSNi voluntarily prepaid the remaining $69.8 million balance of the term
loan. As of December 31, 2011, there was no outstanding balance on the revolving credit facility.
On July 28, 2008, HSNi issued $240 million of 11.25% senior notes due 2016 (the “Senior Notes”). The
Senior Notes are unsecured and subordinated to all of HSNi’s secured debt. The Senior Notes were issued at a
discount of $1.6 million which, along with other issuance expenses of $7.3 million, are being amortized to
interest expense over the eight year term of the Senior Notes. At any time prior to August 1, 2012, we may
redeem the Senior Notes at a redemption price equal to the sum of the principal amount thereof, plus accrued
interest and a make-whole premium. Thereafter, we may redeem the Senior Notes at the redemption prices set
forth below, together with accrued and unpaid interest thereon to the applicable redemption date, if redeemed
during the 12-month period beginning on June 15 of the years indicated below:
Year Percentage
2012 .................................................................... 105.63%
2013 .................................................................... 102.81%
2014 and thereafter ......................................................... 100.00%
If we experience a change of control, we may be required to offer to purchase the Senior Notes at a purchase
price equal to 101% of the principal amount, plus accrued interest.
Substantially all of our domestic subsidiaries have unconditionally guaranteed the Senior Notes. The
indenture governing the Senior Notes contains covenants that limit our ability and the ability of our subsidiaries
to, among other things, incur additional indebtedness, pay dividends or make other distributions, repurchase or
redeem our stock, make investments, sell assets, incur liens, enter into agreements restricting our subsidiaries’
ability to pay dividends, enter into transactions with affiliates and consolidate, and merge or sell all or
substantially all of our assets.
Aggregate contractual maturities of long-term debt are as follows (in thousands):
Years Ending December 31,
2012 – 2015 .............................................................. —
2016 .................................................................... 240,000
$240,000
NOTE 11—STOCK-BASED AWARDS
Stock-based compensation expense is included in the following line items in the accompanying consolidated
statements of operations (in thousands):
Year Ended December 31,
2011 2010 2009
Selling and marketing ................................................ $ 3,613 $ 3,044 $ 1,946
General and administrative ........................................... 21,679 17,190 8,618
Production and programming .......................................... 1,109 998 700
Stock-based compensation expense before income taxes .................... 26,401 21,232 11,264
Income tax benefit .................................................. (8,792) (8,441) (4,492)
Stock-based compensation expense after income taxes ...................... $17,609 $12,791 $ 6,772
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