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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 (under both credit agreements) to a
fixed-rate basis beginning January 2014 through April 2017. For additional information related to our interest rate swap, refer
to Note 8 of Notes to Consolidated Financial Statements.
Effective January 27, 2015, HSNi's Board of Directors authorized a new 4 million share repurchase program which
allows HSNi to purchase 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 depends 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. During 2015, HSNi repurchased approximately 948,000 shares of common stock at a cost of $58.5
million, or an average cost of $61.73 per share. As of December 31, 2015, approximately 3.1 million shares remain authorized
for repurchase under the program.
HSNi anticipates it will need to make capital and other expenditures in connection with the development and
expansion of its operations. Our capital expenditures for fiscal 2016 are planned at approximately $60 million to $70 million
and primarily relate to our investments in our distribution centers, including our warehouse automation project; information
technology; Cornerstone's retail store expansion and digital commerce. 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.
In February 2016, HSNi's Board of Directors approved a cash dividend of $0.35 per common share. The dividend will
be paid on March 23, 2016 to HSNi's record holders as of March 9, 2016.
Contractual Obligations and Commercial Commitments
The following table presents HSNi’s contractual obligations and commercial commitments as of December 31, 2015:
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 . . . . . . $ 640,000 $ 25,000 $ 62,500 $ 552,500 $ —
Interest on debt (a). . . . . . . . . . . . . . . . . . . . . . . . . . . 46,004 12,998 21,960 11,046 —
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111,466 29,018 43,083 23,104 16,261
Purchase obligations (b) . . . . . . . . . . . . . . . . . . . . . . 101,083 79,732 18,319 3,032 —
Total contractual obligations . . . . . . . . . . . . . . $ 898,553 $ 146,748 $ 145,862 $ 589,682 $ 16,261
(a) Includes interest on variable rate debt estimated using the rate in effect as of December 31, 2015, net of the impact of
the interest rate swap. An all-in fixed rate of 2.3525% based on HSNi's leverage ratio as of December 31, 2015 is
assumed through April 2017 on the portion of the debt covered by the swap.
(b) The purchase obligations primarily relate to contracts with pay television operators and include obligations for future
cable distribution and commission guarantees.
Amount of Commitments Expiration Per Period
Commercial Commitments
Total
Amounts
Committed Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years
(In thousands)
Letters of credit and surety bonds (c) . . . . . . . . . . . . . . $ 13,678 $ 13,618 $ 60 $ — $ —
(c) The letters of credit (“LOCs”) primarily consist of trade LOCs which are used for inventory purchases. Trade LOCs are
guarantees of payment based upon the delivery of goods. The surety bonds primarily consist of custom bonds which
relate to the import of merchandise into the United States.