Home Shopping Network 2015 Annual Report Download - page 54

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52
NOTE 10—EARNINGS PER SHARE
HSNi computes basic earnings per share using the weighted average number of common shares outstanding for the
period. HSNi computes diluted earnings per share using the treasury stock method, which includes the weighted average
number of common shares outstanding for the period plus the potential dilution that could occur if various equity awards to
issue common stock were exercised or restricted equity awards were vested resulting in the issuance of common stock that
could share in HSNi’s earnings.
Basic Earnings Per Share
For the years ended December 31, 2015, 2014 and 2013, basic earnings per share was computed using the number of
weighted average shares of common stock outstanding and assumed to be outstanding for the period.
Diluted Earnings Per Share
For the years ended December 31, 2015, 2014 and 2013, diluted earnings per share was computed using the number of
shares of common stock outstanding and assumed to be outstanding for the year and, if dilutive, the incremental common stock
that HSNi would issue upon the assumed exercise of stock options and stock appreciation rights and the vesting of restricted
stock units using the treasury stock method.
The following table presents HSNi’s basic and diluted earnings per share (in thousands, except per share data):
Year Ended December 31,
2015 2014 2013
Net income $ 169,239 $ 172,984 $ 178,449
Weighted average number of shares outstanding:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,627 52,736 53,640
Dilutive effect of stock-based compensation awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 878 897 1,217
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,505 53,633 54,857
Net income per share:
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.22 $ 3.28 $ 3.33
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.16 $ 3.23 $ 3.25
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 763 432
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,
2015 2014 2013
Selling and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,171 $ 4,736 $ 3,793
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,237 10,870 10,250
Stock-based compensation expense before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,408 15,606 14,043
Income tax benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,563) (5,685) (4,835)
Stock-based compensation expense after income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,845 $ 9,921 $ 9,208
As of December 31, 2015, there was approximately $22.3 million of unrecognized compensation cost, net of estimated
forfeitures, related to all equity-based awards, which is currently expected to be recognized on a straight-line basis over a
weighted average period of approximately 1.9 years.