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38
HSN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
2013 2012 2011
Cash flows from operating activities attributable to continuing operations:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 178,449 $ 130,675 $ 123,070
Loss from discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5,822) (4,582)
Income from continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178,449 136,497 127,652
Adjustments to reconcile income from continuing operations to net cash provided by operating
activities attributable to continuing operations:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,589 38,005 35,822
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,043 19,056 26,401
Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 18,627 —
Amortization of debt issuance costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,130 1,777 2,941
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,370 (2,146) 2,238
Bad debt expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,773 24,186 19,758
Excess tax benefits from stock-based awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,360) (19,004) (9,835)
Fair value adjustment to contingent consideration obligation . . . . . . . . . . . . . . . . . . . . . . . . (3,600) — —
Asset impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,040 — —
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,140 764 2,343
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38,211) (51,995) (46,201)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,617 (36,117) (1,385)
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,318) (3,724) (3,213)
Accounts payable, accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . . 19,245 21,487 8,834
Net cash provided by operating activities attributable to continuing operations . . . . . . . . . . 231,907 147,413 165,355
Cash flows from investing activities attributable to continuing operations:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51,952) (45,803) (42,069)
Acquisition of business, net of cash received. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (22,875) —
Advance payment of capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,100) — —
Proceeds from sale of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6,580 —
Net cash used in investing activities attributable to continuing operations. . . . . . . . . . . . . . . (61,052) (62,098) (42,069)
Cash flows from financing activities attributable to continuing operations:
Redemption of Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (253,500) (69,841)
Borrowing under term loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 250,000 —
Repayments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,375) — —
Payments of debt issuance costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (4,607) —
Repurchase of common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (146,894) (221,835) (26,821)
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,281) (31,049) (7,384)
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,396 20,688 8,845
Tax withholdings related to stock-based awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,395) (18,209) (11,430)
Excess tax benefits from stock-based awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,360 19,004 9,835
Payment of contingent consideration obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,172) — —
Net cash used in financing activities attributable to continuing operations . . . . . . . . . . . . . . (196,361) (239,508) (96,796)
Total cash (used in) provided by continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,506) (154,193) 26,490
Cash flows from discontinued operations:
Net cash (used in) provided by operating activities attributable to discontinued operations. (153) (5,361) 1,309
Net cash used in investing activities attributable to discontinued operations . . . . . . . . . . . . — (162) (250)
Total cash (used in) provided by discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (153) (5,523) 1,059
Net (decrease) increase in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,659) (159,716) 27,549
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222,092 381,808 354,259
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 196,433 $ 222,092 $ 381,808
The accompanying notes are an integral part of these consolidated financial statements.