Home Shopping Network 2015 Annual Report Download - page 65

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63
NOTE 18—RETIREMENT AND SAVINGS PLANS
Effective December 31, 2008, HSNi established the HSN, Inc. Retirement Savings Plan that qualifies under Section 401
(k) of the Internal Revenue Code. Participating employees may contribute up to 50% of their pretax salary, up to the statutory
limits. For the years ended December 31, 2015, 2014 and 2013, HSNi contributed fifty cents for each dollar a participant
contributed of the first 6% of a participant's deferrals. HSNi’s matching contributions were $5.0 million, $4.6 million and $4.6
million for the years ended December 31, 2015, 2014 and 2013, respectively.
Effective January 1, 2014, HSNi initiated a nonqualified deferred compensation plan allowing salary and annual bonus
deferrals for qualifying employees as permitted by the Internal Revenue Code. Participant deferrals earn investment returns
based on a select number of investment options, including equity and debt mutual funds. HSNi invested comparable amounts in
marketable securities through life insurance policies to mitigate the risk associated with the investment return on the employee
deferrals. Assets related to the funded portion of the deferred compensation plan are held in a rabbi trust which remains subject
to claims of HSNi's general creditors. HSNi remains liable to the participants for the unfunded portion of the plan. HSNi
records changes in the fair value of the asset and liability in the statement of operations. As of December 31, 2015 and 2014,
the company-owned life insurance policies had a cash surrender value of $1.9 million and $0.5 million, respectively and were
recorded in "Other non-current assets" in the consolidated balance sheet. The Plan's deferred compensation liability as of
December 31, 2015 and 2014 was $2.0 million and $0.6 million, respectively and was recorded in "Other long-term liabilities"
in the consolidated balance sheet.
NOTE 19—COSTS ASSOCIATED WITH AN EXIT ACTIVITY
As part of its supply chain optimization initiative designed to increase operational efficiencies and enhance customer
service, HSNi announced in June 2015 its plan to close the HSN distribution center in Roanoke, Virginia and expand the
capabilities of its distribution center in Piney Flats, Tennessee. The closure will involve the eventual elimination of
approximately 350 positions at the Virginia facility. HSNi expects the closure to occur in accordance with an eighteen-month
transition plan and be substantially completed by the end of 2016.
HSN expects to incur approximately $4 million to $5 million in total charges related to the closure. These charges
include approximately $3 million to $4 million in employee-related expenses, including severance payments and retention
incentives. During the year ended December 31, 2015, HSN recognized $3.2 million in employee-related costs which are
included in "General and administrative” operating expenses in the accompanying consolidated statements of operations.
A summary of HSNi’s liability associated with exit activities, which is recorded in “Accrued expenses and other
current liabilities” and “Other long-term liabilities” in the accompanying consolidated balance sheets, are presented in the
following table (in thousands):
Employee Related Costs
Balance at January 1, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ —
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,132
Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Balance at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,221