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the revolving credit facility, in consideration of the financial covenants and outstanding letters of credit, was approximately
$318.3 million.
To reduce our future exposure to rising interest rates under our credit facility, we entered into a forward-starting swap
in December 2012 that effectively converts $187.5 million of our variable rate term loan to a fixed-rate of 0.8525%, resulting in
an all-in fixed rate of 2.3525% (based on HSNi's leverage ratio as of December 31, 2013), beginning January 2014 through
April 2017. For additional information related to our interest rate swaps, refer to Note 8 of Notes to Consolidated Financial
Statements.
On July 28, 2008, HSNi issued $240 million of 11.25% Senior Notes due 2016. The Senior Notes were fully redeemed
on August 1, 2012 for $253.5 million, or 105.625% of the principal amount. HSNi drew $250 million from its term loan on July
31, 2012 and used its cash on hand to fund the redemption. HSNi reported approximately $18.6 million in pre-tax charges
primarily associated with redemption of the Senior Notes. These charges resulted from the redemption premium of $13.5
million and $5.1 million related to the write-off of unamortized issuance costs and original issue discount.
HSNi does not currently have any material commitments for capital expenditures; however, management does
anticipate that HSNi will need to make capital and other expenditures in connection with the development and expansion of its
operations. HSNi’s ability to fund its cash and capital needs will be affected by its ongoing ability to generate cash from
operations, the overall capacity and terms of its financing arrangements as discussed above, and access to the capital markets.
HSNi believes that its cash on hand, its anticipated operating cash flows, its available unused portion of the revolving credit
facility and its access to capital markets will be sufficient to fund its operating needs, capital, investing and other commitments
and contingencies for the foreseeable future.
On September 27, 2011, HSNi’s Board of Directors approved a share repurchase program which allows HSNi to
purchase 10 million shares of its common stock from time to time through privately negotiated and/or open market
transactions. The timing of any repurchases and actual number of shares repurchased will depend on a variety of factors,
including the stock price, corporate and regulatory requirements, restrictions under HSNi’s debt obligations and other market
and economic conditions. The repurchase program may be suspended or discontinued by HSNi at any time. For the year ended
December 31, 2013, HSNi repurchased approximately 2.7 million shares at a cost of $146.9 million at an average cost of
$53.67 per share. As of December 31, 2013, approximately 1.0 million shares remained authorized for repurchase under the
program.
In February 2014, HSNi's Board of Directors approved a cash dividend of $0.25 per common share. The dividend will
be paid on March 19, 2014 to HSNi's record holders as of March 5, 2014.
Contractual Obligations and Commercial Commitments
The following table presents HSNi’s contractual obligations as of December 31, 2013:
Payments Due by Period
Contractual Obligations
Total
Amounts
Committed
Less Than
1 Year 1 - 3 Years 3 - 5 Years
More Than
5 Years
(In thousands)
Long-term debt, including current maturities . . . . . . $ 240,625 $ 12,500 $ 35,938 $ 192,187 $ —
Interest on debt (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 16,422 5,187 9,828 1,407 —
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,407 24,756 38,285 26,666 13,700
Purchase obligations (b) . . . . . . . . . . . . . . . . . . . . . . 141,678 73,610 68,016 52 —
Total contractual obligations . . . . . . . . . . . . . . $ 502,132 $ 116,053 $ 152,067 $ 220,312 $ 13,700
(a) Includes interest on variable rate debt estimated using the rate in effect as of December 31, 2013 through January 31,
2014, at which time the forward-starting interest rate swap goes into effect. An all-in fixed rate of 2.3525% based on
HSNi's leverage ratio as of December 31, 2013 is then assumed from February 1, 2014 through April 2017, the date of
expiration of the variable rate debt.
(b) The purchase obligations primarily relate to contracts with pay television operators and include obligations for future
cable distribution and commission guarantees.