10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________________________________________________________________

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2016
Or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 001-34061

________________________________________________________________________________________________

HSN, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________________

Delaware	26-2590893
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1 HSN Drive, St. Petersburg, Florida	33729
(Address of principal executive offices)	(Zip Code)

(727) 872-1000

(Registrant’s telephone number, including area code)

________________________________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xNo o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non‑accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 3, 2016, the registrant had 52,285,790 shares of common stock, $0.01 par value per share, outstanding.

	TABLE OF CONTENTS
		Page
	PART I-FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015	1
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015	2
	Consolidated Balance Sheets as of March 31, 2016, December 31, 2015 and March 31, 2015	3
	Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, 2016 and Year Ended December 31, 2015	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
	PART II-OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	25
Item 6.	Exhibits	25
Signatures		26

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HSN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2016			2015
Net sales	$	816,765		$	841,887
Cost of sales	527,287			541,681
Gross profit	289,478			300,206
Operating expenses:
Selling and marketing	179,161			179,206
General and administrative	49,963			52,742
Depreciation and amortization	10,525			11,249
Total operating expenses	239,649			243,197
Operating income	49,829			57,009
Other income (expense):
Interest income	25			40
Interest expense	(4,172		)	(3,337		)
Total other expense, net	(4,147		)	(3,297		)
Income before income taxes	45,682			53,712
Income tax provision	(17,097		)	(20,023		)
Net income	$	28,585		$	33,689
Net income per share:
Basic	$	0.55		$	0.64
Diluted	$	0.54		$	0.63
Shares used in computing earnings per share:
Basic	52,378			52,573
Diluted	52,919			53,760
Dividends declared per share	$	0.35		$	10.35

The accompanying notes are an integral part of these consolidated financial statements.

1

HSN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2016			2015
Net income	$	28,585		$	33,689
Other comprehensive loss:
Change in fair value of derivative instrument, net of tax	(249		)	(499		)
Other comprehensive loss, net of tax	(249		)	(499		)
Comprehensive income	$	28,336		$	33,190

The accompanying notes are an integral part of these consolidated financial statements.

2

HSN, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	March 31,			December 31,			March 31,
	2016			2015			2015
ASSETS
Current assets:
Cash and cash equivalents	$	46,785		$	63,926		$	77,547
Accounts receivable, net of allowance of $19,706, $20,631 and $16,997, respectively	217,878			306,575			218,651
Inventories	441,977			428,025			435,902
Prepaid expenses and other current assets	55,481			45,402			57,547
Total current assets	762,121			843,928			789,647
Property and equipment, net	206,344			211,793			194,023
Intangible assets, net	255,266			255,268			261,864
Goodwill	9,858			9,858			9,858
Other non-current assets	12,718			13,724			9,306
TOTAL ASSETS	$	1,246,307		$	1,334,571		$	1,264,698
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable, trade	$	209,933		$	254,704		$	211,553
Current maturities of long-term debt	25,000			25,000			6,250
Accrued expenses and other current liabilities	204,897			235,042			221,596
Total current liabilities	439,830			514,746			439,399
Long-term debt, less current maturities and net of unamortized deferred financing costs	592,302			608,108			660,557
Deferred income taxes	42,929			44,498			53,889
Other long-term liabilities	20,006			20,657			18,124
Total liabilities	1,095,067			1,188,009			1,171,969
Commitments and contingencies (Note 12)
SHAREHOLDERS’ EQUITY:
Preferred stock $0.01 par value; 25,000,000 authorized shares; no issued shares	—			—			—
Common stock $0.01 par value; 300,000,000 authorized shares; 52,283,382, 52,377,798 and 52,565,318 issued shares at March 31, 2016, December 31, 2015 and March 31, 2015, respectively	523			524			526
Additional paid-in capital	1,062,128			1,085,785			1,167,777
Accumulated deficit	(911,067		)	(939,652		)	(1,075,202		)
Accumulated other comprehensive loss	(344		)	(95		)	(372		)
Total shareholders’ equity	151,240			146,562			92,729
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,246,307		$	1,334,571		$	1,264,698

The accompanying notes are an integral part of these consolidated financial statements.

3

HSN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Preferred Stock			Common Stock					Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Total
	Shares	Amount		Shares		Amount
Balance as of December 31, 2014	—	$	—	52,426		$	524		$	1,710,581		$	(1,108,891	)	$	127		$	602,341
Net income	—	—		—		—			—			169,239			—			169,239
Other comprehensive loss	—	—		—		—			—			—			(222		)	(222		)
Stock-based compensation expense for equity awards	—	—		—		—			18,408			—			—			18,408
Cash dividends declared on common stock	—	—		—		—			(597,864		)	—			—			(597,864		)
Issuance of common stock from stock-based compensation awards, including tax benefit of $12,526	—	—		900		9			13,161			—			—			13,170
Repurchases of common stock	—	—		(948	)	(9		)	(58,501		)	—			—			(58,510		)
Balance as of December 31, 2015	—	—		52,378		524			1,085,785			(939,652		)	(95		)	146,562
Net income	—	—		—		—			—			28,585			—			28,585
Other comprehensive loss	—	—		—		—			—			—			(249		)	(249		)
Stock-based compensation expense for equity awards	—	—		—		—			5,376			—			—			5,376
Cash dividends declared on common stock	—	—		—		—			(18,300		)	—			—			(18,300		)
Issuance of common stock from stock-based compensation awards, including tax expense of $254	—	—		86		1			(2,064		)	—			—			(2,063		)
Repurchases of common stock	—	—		(181	)	(2		)	(8,669		)	—			—			(8,671		)
Balance as of March 31, 2016	—	$	—	52,283		$	523		$	1,062,128		$	(911,067	)	$	(344	)	$	151,240

The accompanying notes are an integral part of these consolidated financial statements.

4

HSN, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2016			2015
Cash flows from operating activities:
Net income	$	28,585		$	33,689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,525			11,249
Stock-based compensation expense	5,376			4,657
Amortization of debt issuance costs	444			831
Deferred income taxes	(1,415		)	(1,925		)
Bad debt expense	4,588			5,415
Excess tax benefits from stock-based awards	(23		)	(3,905		)
Other	178			235
Changes in current assets and liabilities:
Accounts receivable	84,109			93,717
Inventories	(13,953		)	(37,197		)
Prepaid expenses and other assets	(9,248		)	(12,159		)
Accounts payable, accrued expenses and other current liabilities	(76,725		)	(58,258		)
Net cash provided by operating activities	32,441			36,349
Cash flows from investing activities:
Capital expenditures	(5,145		)	(13,145		)
Net cash used in investing activities	(5,145		)	(13,145		)
Cash flows from financing activities:
Borrowings under term loan	—			500,000
Repayment of term loan	(6,250		)	(228,125		)
Borrowings under revolving credit facility	45,000			200,000
Repayment of revolving credit facility	(55,000		)	(25,000		)
Repurchase of common stock	(8,671		)	(6,987		)
Payments of debt issuance costs	—			(6,584		)
Cash dividends paid	(18,300		)	(542,748		)
Proceeds from issuance of common stock	586			3,816
Tax withholdings related to stock-based awards	(1,825		)	(3,919		)
Excess tax benefits from stock-based awards	23			3,905
Net cash used in financing activities	(44,437		)	(105,642		)
Net decrease in cash and cash equivalents	(17,141		)	(82,438		)
Cash and cash equivalents at beginning of period	63,926			159,985
Cash and cash equivalents at end of period	$	46,785		$	77,547

The accompanying notes are an integral part of these consolidated financial statements.

5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—ORGANIZATION

Company Overview

HSN, Inc. (“HSNi”) is an interactive multi-channel retailer that markets and sells a wide range of third party and proprietary merchandise directly to consumers through various platforms including (i) television home shopping programming broadcast on the HSN television networks and other direct-response television marketing; (ii) catalogs, consisting primarily of the Cornerstone portfolio of leading print catalogs which includes Ballard Designs, Chasing Fireflies, Frontgate, Garnet Hill, Grandin Road, Improvements and TravelSmith; (iii) websites, which consist primarily of HSN.com, joymangano.com and the seven branded websites operated by Cornerstone; (iv) mobile applications; (v) retail and outlet stores; and (vi) wholesale distribution of certain proprietary products to other retailers. HSNi’s television home shopping business, related digital sales, outlet stores and wholesale distribution are referred to herein as “HSN” and all catalog operations, including related digital sales and stores, are collectively referred to herein as “Cornerstone.”

HSN offerings primarily consist of jewelry, fashion (apparel & accessories), beauty & health (including beauty, wellness and fitness), and home & other (including home, electronics, culinary and other). Merchandise offered by Cornerstone primarily consists of home furnishings (including indoor/outdoor furniture, home décor, tabletop, textiles and other home related goods) and apparel & accessories.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). They do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of HSNi's management, all normal recurring adjustments considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of the results that may be expected for a full year. The accompanying unaudited consolidated financial statements should be read in conjunction with HSNi's audited consolidated financial statements and notes thereto for the year ended December 31, 2015. The consolidated balance sheet as of December 31, 2015 and the consolidated statement of shareholders' equity for the year ended December 31, 2015 were derived from the audited consolidated financial statements at that date but may not include all disclosures required by GAAP. Intercompany transactions and accounts have been eliminated in consolidation.

Recent Accounting Developments

Recently Adopted Accounting Standard Updates

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The new standard is limited to the presentation of debt issuance costs and does not affect their recognition and measurement. ASU 2015-03 is effective for periods beginning after December 15, 2015, including interim periods within that annual period. HSNi retrospectively adopted ASU 2015-03 in the first quarter of 2016 resulting in the reclassification of its debt issuance costs from "Other non-current assets" to a deduction from "Long-term debt, less current maturities and net of unamortized deferred financing costs" in the consolidated balance sheets. See Note 6 for additional information regarding the deferred issuance costs.

In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. HSNi prospectively adopted ASU 2015-05 on January 1, 2016 and will apply this guidance to all arrangements entered into or materially modified after the effective date.

6

Accounting Standard Updates Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Additionally, ASU 2014-09 will disallow the capitalization of direct-response advertising costs which will impact the timing of recognition of Cornerstone's catalog production and distribution costs. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. This standard will now become effective for HSNi in the first quarter of 2018. Early adoption is permitted in the first quarter of 2017. HSNi is in the process of assessing the impact of the adoption of ASU 2014-09 to its consolidated financial statements and is evaluating the accounting, transition method, disclosure requirements and timing of adoption.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis; however, early adoption is permitted. HSNi will adopt ASU 2015-11 on January 1, 2017. HSNi is currently assessing the potential impact ASU 2015-11 will have to its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 requires lessees to reflect most leases on their balance sheet as assets and obligations. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard is to be applied on a modified retrospective method. HSNi is currently assessing the timing of adoption of ASU 2016-02 and the impact it will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) ("ASU 2016-09"). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. HSNi is currently assessing the timing of adoption of ASU 2016-09 and the impact it will have on its consolidated financial statements and related disclosures.

Reclassifications

Reclassifications were made to prior period amounts to conform to the current year's presentation. Changes included the reclassification of certain operating expenses in the consolidated statement of operations and reclassification of deferred income taxes and deferred financing costs in the consolidated balance sheets due to the implementation of recent accounting standard updates. Current deferred tax assets of $31.1 million in the March 31, 2015 consolidated balance sheet were reclassified as non-current and netted against non-current deferred tax liabilities as a result of retrospectively adopting ASU 2015-17, Balance Sheet Classification of Deferred Taxes, in the fourth quarter of 2015.

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

HSNi prepares its financial statements in conformity with GAAP. These principles require management to make certain estimates and assumptions during the preparation of its consolidated financial statements. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. In the opinion of HSNi's management, the assumptions underlying these interim unaudited financial statements are reasonable.

7

Significant estimates underlying the accompanying consolidated financial statements include: the determination of the lower of cost or market adjustment for inventory; sales returns and other revenue allowances; the allowance for doubtful accounts; the recoverability of long-lived assets; the impairment of intangible assets; the annual expected effective tax rate; the determination of deferred income taxes, including related valuation allowances; the accrual for actual, pending or threatened litigation, claims and assessments; and assumptions related to the determination of incentive compensation and contingent consideration.    

NOTE 3—PROPERTY AND EQUIPMENT

The balance of property and equipment, net, is as follows (in thousands):

	March 31,			December 31,			March 31,
	2016			2015			2015
Capitalized software	$	237,202		$	234,249		$	225,455
Computer and broadcast equipment	93,557			91,533			90,821
Buildings and leasehold improvements	110,887			108,656			105,940
Furniture and other equipment	97,434			96,512			91,106
Projects in progress	51,860			55,294			34,549
Land and land improvements	10,635			10,597			10,542
	601,575			596,841			558,413
Less: accumulated depreciation and amortization	(395,231		)	(385,048		)	(364,390		)
Total property and equipment, net	$	206,344		$	211,793		$	194,023

NOTE 4—SEGMENT INFORMATION

HSNi presents its operating segments and related financial information in a manner consistent with how the chief operating decision maker and executive management view the businesses, how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered and/or the target market. HSNi has two reportable segments, HSN and Cornerstone. The accounting policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies included in HSNi's Annual Report on Form 10-K for the year ended December 31, 2015. Intercompany accounts and transactions have been eliminated in consolidation.

HSNi’s primary performance metric is Adjusted EBITDA, which is defined as operating income excluding, if applicable: (1) non-cash charges including: (a) stock-based compensation expense, (b) amortization of intangibles, (c) depreciation and gains and losses on asset dispositions, and (d) goodwill, long-lived asset and intangible asset impairments; (2) pro forma adjustments for significant acquisitions; and (3) other significant items. Significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, thereby affecting the comparability of results. Adjusted EBITDA is not a measure determined in accordance with GAAP, and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with GAAP. Adjusted EBITDA is used as a measurement of operating efficiency and overall financial performance and HSNi believes it to be a helpful measure for those evaluating companies in the retail and media industries. Adjusted EBITDA has certain limitations in that it does not take into account the impact to HSNi’s consolidated statements of operations of certain expenses, gains and losses; including stock-based compensation, amortization of intangibles, depreciation, gains and losses on asset dispositions, asset impairment charges, acquisition-related accounting expenses and other significant items.

8

The following tables reconcile Adjusted EBITDA to operating income for HSNi’s operating segments and to HSNi’s consolidated net income (in thousands):

	Three Months Ended March 31, 2016									Three Months Ended March 31, 2015
	HSN			Cornerstone			Total			HSN			Cornerstone			Total
Adjusted EBITDA	$	60,690		$	5,042		$	65,732		$	66,190		$	6,961		$	73,151
Stock-based compensation expense	(4,039		)	(1,337		)	(5,376		)	(3,607		)	(1,050		)	(4,657		)
Depreciation and amortization	(7,003		)	(3,522		)	(10,525		)	(7,419		)	(3,830		)	(11,249		)
Loss on disposition of fixed assets	(3		)	1			(2		)	(236		)	—			(236		)
Operating income	$	49,645		$	184		49,829			$	54,928		$	2,081		57,009
Total other expense, net							(4,147		)							(3,297		)
Income before income taxes							45,682									53,712
Income tax provision							(17,097		)							(20,023		)
Net income							$	28,585								$	33,689

The net sales for each of HSNi's reportable segments are as follows (in thousands):

	Three Months Ended March 31,
	2016		2015
Net sales:
HSN	$	578,383	$	600,492
Cornerstone	238,382		241,395
Total	$	816,765	$	841,887

NOTE 5—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.

The following table presents HSNi’s basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended March 31,
	2016		2015
Net income	$28,585		$33,689
Weighted average number of shares outstanding:
Basic	52,378		52,573
Dilutive effect of stock-based compensation awards	541		1,187
Diluted	52,919		53,760
Net income per share:
Basic	$	0.55	$	0.64
Diluted	$	0.54	$	0.63
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	1,919		527

9

NOTE 6—LONG-TERM DEBT

The balance of long-term debt, including current maturities, is as follows (in thousands):

	March 31,			December 31,			March 31,
	2016			2015			2015
Secured credit agreement expiring January 27, 2020:
Term loan	$	493,750		$	500,000		$	500,000
Revolving credit facility	130,000			140,000			175,000
Long-term debt	623,750			640,000			675,000
Unamortized deferred financing costs	(6,448		)	(6,892		)	(8,193		)
Long-term debt, net of unamortized deferred financing costs	617,302			633,108			666,807
Less: current maturities	(25,000		)	(25,000		)	(6,250		)
Long-term debt, less current maturities and net of unamortized deferred financing costs	$	592,302		$	608,108		$	660,557

On January 27, 2015, HSNi entered into a $1.25 billionfive-year syndicated credit agreement ("Credit Agreement") which is secured by 100% of the voting equity securities of HSNi's U.S. subsidiaries and 65% of HSNi's first-tier foreign subsidiaries. This Credit Agreement replaced the credit agreement that was set to expire in April 2017. Certain HSNi subsidiaries have unconditionally guaranteed HSNi's obligations under the Credit Agreement.  The Credit Agreement, which includes a $750 million revolving credit facility and a $500 million term loan, may be increased up to $1.75 billion subject to certain conditions and expires January 27, 2020. HSNi drew $200 million from its term loan under the Credit Agreement on January 27, 2015 to repay in full its existing term loan of $228.1 million. HSNi drew the remaining $300 million from the term loan and $200 million under the revolving credit facility, both under the Credit Agreement, on February 18, 2015 to fund a $524 million special cash dividend that was paid on February 19, 2015.

In connection with the termination of the prior credit agreement, $0.5 million of the $2.4 million of unamortized deferred financing costs were expensed in the first quarter of 2015. The remaining balance of $1.9 million along with the $6.6 million in capitalized financing costs related to the Credit Agreement are being amortized to interest expense over the five-year term of the Credit Agreement. Capitalized financing costs, net of accumulated amortization, are presented as a deduction from the corresponding debt liability for all periods presented.

The Credit Agreement includes various covenants, limitations and events of default customary for similar facilities including a maximum leverage ratio of 3.50x and a minimum interest coverage ratio of 3.00x. HSNi was in compliance with all such covenants as of March 31, 2016 with a leverage ratio of 1.8x and an interest coverage ratio of 24.8x. The Credit Agreement also contains covenants that limit our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, pay dividends or make other distributions to third parties, repurchase or redeem our stock, make investments, sell assets, incur liens, enter into agreements restricting our subsidiaries' ability to pay dividends, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of our assets. Dividends, loans or advances to HSNi by its subsidiaries are not restricted by the Credit Agreement.

Loans under the Credit Agreement bear interest at a per annum rate equal to LIBOR plus a predetermined margin that ranges from 1.25% to 2.25% or the Base Rate (as defined in the Credit Agreement) plus a predetermined margin that ranges from 0.25% to 1.25%.  HSNi can elect to borrow at either LIBOR or the Base Rate plus a predetermined margin which is determined by HSNi's leverage ratio. The interest rate on the $623.8 million outstanding long-term debt balance as of March 31, 2016 was 1.93%.  HSNi pays a commitment fee ranging from 0.20% to 0.40% (based on the leverage ratio) on the unused portion of the revolving credit facility. 

The amount available to HSNi under the revolving credit facility portion of the Credit Agreement is reduced by the amount of outstanding letters of credit issued under the revolving credit facility, which totaled $8.6 million as of March 31, 2016. The ability to draw funds under the revolving credit facility is dependent upon meeting the aforementioned financial covenants. As of March 31, 2016, the amount that could be borrowed under the revolving credit facility, after consideration of the financial covenants and the outstanding letters of credit, was approximately $615.1 million.

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NOTE 7—DERIVATIVE INSTRUMENTS

HSNi uses derivatives in the management of its interest rate risk with respect to its variable rate debt. HSNi's strategy is to eliminate the cash flow risk on a portion of its variable rate debt caused by changes in the benchmark interest rate (LIBOR). Derivative instruments are not entered into for speculative purposes.

HSNi entered into a forward-starting interest rate swap agreement on December 20, 2012 with a notional amount of $187.5 million at a fixed rate of 0.8525%, resulting in an all-in fixed rate of 2.3525% based on HSNi's leverage ratio as of March 31, 2016. The interest rate swap took effect on January 31, 2014 with a maturity date in April 2017. Under this swap, HSNi pays at a fixed rate and receives payments at a variable rate based on one-month LIBOR. The swap effectively fixes the floating LIBOR-based interest of our outstanding LIBOR-based debt. The interest rate swap was designated and qualified as a cash flow hedge; therefore, the effective portion of the changes in fair value is recorded in accumulated other comprehensive income (loss). Any ineffective portions of the changes in fair value of the interest rate swap will be immediately recognized in earnings in the consolidated statements of operations. The changes in fair value of the interest rate swap (inclusive of reclassifications to net income and net of tax) for the three months ended March 31, 2016 and 2015 were losses of approximately $0.2 million and $0.5 million, respectively, and were included in other comprehensive income (loss).

The fair values of the interest rate swap at March 31, 2016, December 31, 2015 and March 31, 2015 were liabilities of $0.6 million, $0.2 million and $0.6 million, respectively, and were recorded in "Other long-term liabilities" in the consolidated balance sheets. HSNi estimates that approximately $0.5 million of unrealized losses included in accumulated other comprehensive loss related to this swap will be realized and reported in earnings within the next twelve months. See Note 8 for discussion of the fair value measurements concerning this interest rate swap.

NOTE 8—FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value assumptions are made at a specific point in time and changes in underlying assumptions could significantly affect these estimates. HSNi applies the following framework for measuring fair value which is based on a three-level hierarchy:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The following table summarizes the fair value of HSNi's other financial assets and liabilities which are measured at fair value on a recurring basis in the consolidated balance sheets (in thousands):

	March 31, 2016
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	552	$	—	$	552	$	—

	December 31, 2015
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	169	$	—	$	169	$	—

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	March 31, 2015
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	596	$	—	$	596	$	—

HSNi's interest rate swap is carried on the balance sheet at fair value. The swap was entered into in December 2012 for the purpose of hedging the variability of interest expense and interest payments on HSNi's long-term variable rate debt. The fair value is based on a valuation model which utilizes interest rate yield curves and credit spreads as the significant inputs to the model. These inputs are observable in active markets (level 2 criteria). HSNi considers credit risk associated with its own standing as well as the credit standing of any counterparties involved in the valuation of its financial instruments.

The following table summarizes the fair value of HSNi’s financial assets and liabilities which are carried at cost (in thousands):

	March 31, 2016
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	493,750	$	493,750	$	—	$	493,750	$	—
Revolving credit facility	$	130,000	$	130,000	$	—	$	130,000	$	—

	December 31, 2015
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	500,000	$	500,000	$	—	$	500,000	$	—
Revolving credit facility	$	140,000	$	140,000	$	—	$	140,000	$	—

	March 31, 2015
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	500,000	$	500,000	$	—	$	500,000	$	—
Revolving credit facility	$	175,000	$	175,000	$	—	$	175,000	$	—

The fair value of the term loan was estimated by discounting expected cash flows at the rates currently offered to HSNi for debt of the same remaining maturities (level 2 criteria).

HSNi assesses the impairment of goodwill and indefinite-lived intangible assets at fair value at least annually during the fourth quarter and whenever events or circumstances indicate that the carrying value may not be fully recoverable. Cornerstone continues to assess its brand portfolio, which could result in the divestiture of underperforming, less strategic brands. HSNi considered but determined it had no triggering events requiring an impairment assessment of its long-lived and intangible assets existed as of March 31, 2016 and 2015.

NOTE 9—INCOME TAXES

HSNi calculates its interim income tax provision in accordance with the accounting guidance for income taxes in interim periods. At the end of each interim period, HSNi makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date income or loss. The tax or benefit related to significant or unusual items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur.

In addition, the effect of changes in enacted tax laws or rates, tax status, or judgment on the realizability of beginning-of-the-year deferred taxes in future years is recognized in the interim period in which the change occurs.

The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or

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the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter.

For the three months ended March 31, 2016, HSNi recorded a tax provision of $17.1 million which represents an effective tax rate of 37.4%. For the three months ended March 31, 2015, HSNi recorded a tax provision of $20.0 million which represents an effective tax rate of 37.3%.

The Internal Revenue Service ("IRS") has concluded its examination of HSNi's consolidated federal income tax return for the year ended December 31, 2010 and its limited scope examination of HSNi's consolidated federal income tax return for the year ended December 31, 2011. No material adjustments resulted from these IRS examinations. There are currently no income tax examinations in progress. New York State concluded an income tax examination of the years ended December 31, 2011 through December 31, 2013. No material adjustment to our tax liabilities resulted from this examination.

HSNi and several companies previously owned by IAC/InterActiveCorp, or IAC, were spun-off from IAC on August 20, 2008. In connection with the spin-off, HSNi entered into a Tax Sharing Agreement with IAC. Pursuant to this agreement, each of the companies included in the spin-off (the "Spincos") was indemnified by IAC for additional tax liabilities related to consolidated or combined federal and state tax returns prepared and filed by IAC prior to the spin-off. However, each Spinco agreed to, among other things, assume any additional tax liabilities related to their separately filed state income tax returns. All examinations have concluded or statutes of limitations have expired related to IAC's consolidated or combined federal and state tax returns for years including HSNi operations prior to the spin-off.

The Tax Sharing Agreement also provides, among other things, that each Spinco indemnifies IAC and the other Spincos for any taxes resulting from the spin-off of such Spinco (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related shareholder litigation or controversies) to the extent such amounts result from any post spin-off (i) act or failure to act by such Spinco described in the covenants in the Tax Sharing Agreement, (ii) acquisition of equity, securities, or assets of such Spinco or a member of its group, and (iii) breach by such Spinco or any member of its group of any representation or covenant contained in the separation documents or in the documents relating to the IRS private letter ruling and/or tax opinions. This indemnification remains effective until IAC's tax returns for the two year period after the spin-off are no longer subject to examination.

NOTE 10—STOCK-BASED AWARDS

Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2016			2015
Selling and marketing	$	1,808		$	1,554
General and administrative	3,568			3,103
Stock-based compensation expense before income taxes	5,376			4,657
Income tax benefit	(1,876		)	(1,651		)
Stock-based compensation expense after income taxes	$	3,500		$	3,006

As of March 31, 2016, there was approximately $36.3 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 2.2 years.

The Second Amended and Restated 2008 Stock and Annual Incentive Plan, as amended (the “Plan”), authorizes the issuance of 8.0 million shares (8.8 million shares after giving effect to the anti-dilution provisions of the Plan related to the special cash dividend paid in February 2015) of HSNi common stock for new awards granted by HSNi. The purpose of the Plan is to assist HSNi in attracting, retaining and motivating officers, employees, directors and consultants, and to provide HSNi with the ability to provide incentives more directly linked to the profitability of HSNi’s business and increases in shareholder value. As of March 31, 2016, there were approximately 1.5 million shares of common stock available for grants under the Plan.

During the first quarter of 2016, HSNi granted approximately 92,000 performance share units ("PSUs") to certain executive employees. PSUs vest after a three year performance period. PSUs have rights to receive dividend equivalents that vest concurrently with the underlying PSUs once the requisite service has been rendered. Vesting percentages range between 0% and 200% of the target award based on HSNi's Total Shareholder Return relative to a peer group at the end of the performance period.

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A summary of the stock-based awards granted during the three months endedMarch 31, 2016 is as follows:

	Three Months Ended March 31, 2016
	Number of Awards Granted	Weighted Average per Share Fair Value
Stock appreciation rights	928,990	$7.31
Restricted stock units	225,271	$44.89
Performance share units	92,290	$54.06
Employee stock purchase plan options	29,965	$12.18
Dividend equivalents due to quarterly dividend	5,724	-

The fair values of the options granted under the HSN, Inc. 2010 Employee Stock Purchase Plan and the stock appreciation rights are estimated on the grant date using the Black-Scholes option pricing model. The fair value of PSUs is estimated on the grant date using a Monte-Carlo simulation pricing model which estimates the potential outcome of reaching the market condition based on simulated future stock prices. The weighted average assumptions used in the valuation of each for the three months ended March 31, 2016 are as follows:

	Three Months Ended March 31, 2016
	Stock Appreciation Rights		Employee Stock Purchase Plan Options		Performance Share Units
Volatility factor	26.3	%	34.4	%	25.2	%
Risk-free interest rate	1.23	%	0.49	%	0.89	%
Expected term	4.5		0.5		2.9
Dividend yield	3.1	%	2.8	%	0.0	%

NOTE 11—SHAREHOLDERS’ EQUITY

Share Repurchase Program

Effective January 27, 2015, HSNi’s Board of Directors approved a share repurchase program which allows HSNi to purchase up to 4 million shares of its common stock from time to time through privately negotiated and/or open market transactions. The timing of 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 the three months ended March 31, 2016, HSNi acquired approximately 181,000 shares of its outstanding common stock for $8.7 million at an average price of $48.04. All shares were retired immediately following purchase. As of March 31, 2016, approximately 2.9 million shares remain authorized for repurchase under the program.

Dividend Policy

In the first quarter of 2016, HSNi's Board of Directors approved a quarterly cash dividend of $0.35 per common share resulting in a payment of $18.3 million on March 23, 2016 to HSNi's shareholders of record as of March 9, 2016.

In the second quarter of 2016, HSNi's Board of Directors approved a quarterly cash dividend of $0.35 per common share. The dividend will be paid on June 15, 2016 to HSNi's shareholders of record as of June 1, 2016.

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Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes the cumulative gains and losses of derivative instruments that qualify as cash flow hedges. The following table provides a rollforward of accumulated other comprehensive income (loss) (in thousands):

	Three Months Ended March 31,
	2016			2015
Accumulated other comprehensive income (loss) as of January 1,	$	(95	)	$	127
Other comprehensive loss before reclassifications	(603		)	(1,124		)
Amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the consolidated statements of operations	200			320
Income tax benefit	154			305
Other comprehensive loss, net of tax	(249		)	(499		)
Accumulated other comprehensive income (loss) as of March 31,	$	(344	)	$	(372	)

NOTE 12—COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, HSNi is a party to various audits, claims and lawsuits. These audits or litigation may relate to claims involving property, personal injury, contract, intellectual property (including patent infringement), sales tax, product recalls, regulatory compliance, employment matters and other claims. HSNi has established reserves for specific legal, tax or other compliance matters for which it has determined the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain legal, tax or other matters where it believes an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that an unfavorable resolution of claims against HSNi, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on its liquidity, results of operations, financial condition or cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future and an unfavorable resolution of such a proceeding could have a material impact. Moreover, any claims or regulatory actions against HSNi, whether meritorious or not, could be time-consuming, result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources.

HSNi also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 9 for discussion related to income tax contingencies.

NOTE 13—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.

A summary of HSNi’s liability associated with exit activities, which is recorded in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheets, are presented in the following table (in thousands):

	Employee Related Costs
Balance at January 1, 2016	$	3,221
Provisions	—
Payments	—
Adjustments	—
Balance at March 31, 2016	$	3,221

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this quarterly report. Historical results and trends which might appear should not be taken as indicative of future operations. Our results of operations and financial condition, as reflected in the accompanying statements and related notes, are subject to management’s evaluation and interpretations of business conditions, changing market conditions and other factors.

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which are based on management’s exercise of business judgment, as well as assumptions made by and information currently available to management. When used in this document, the words “may,” “will,” “anticipate,” “believe,” “estimate,” “expect,” “intend” and words of similar import, are intended to identify any forward-looking statements. These forward-looking statements include, among other things, statements relating to the following: future financial performance, business prospects and strategy, anticipated trends and prospects in the various markets in which HSNi’s businesses operate and other similar matters. These forward-looking statements relate to expectations concerning matters that are not historical fact and are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance.

Should one or more of these uncertainties, risks or changes in circumstances materialize, or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those described under “Risk Factors,” included in HSNi's Annual Report on Form 10-K for the year ended December 31, 2015 and the following:

• the influence of the macroeconomic environment and its impact on consumer confidence and spending levels;

• our ability to attract new and retain existing customers in a cost-effective manner;

• our exposure to intense competition and our ability to effectively compete for customers;

• changes in our relationships with pay television operators, vendors, manufacturers and other third parties;

• failure to attract and retain television viewers and secure a suitable programming tier of carriage and channel placement for the HSN television network programming;

• changes in product shipping and handling costs particularly if we are unable to offset them;

• any technological or regulatory developments that could negatively impact the way we do business, including developments requiring us to collect and remit state and local sales and use taxes;

• risks associated with possible systems failures and/or security breaches, including, any security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or company information, or the failure to comply with various laws applicable to HSNi in the event of such a breach;

• HSNi’s business prospects and strategy, including whether HSNi’s initiatives will be effective;

• our ability to offer new or innovative products and services through various platforms in a cost effective manner and consumer acceptance of these products and services;

• risks associated with litigation, audits, claims and assessments;

• risks associated with acquisitions including the ability to successfully integrate new businesses and achieve expected benefits and results; and

• the loss of any key member of our senior management team.

Other unknown or unpredictable factors that could also adversely affect HSNi’s business, financial condition and results of operations may arise from time to time.

You should not place undue reliance on these forward-looking statements. All written or oral forward-looking statements that are made or are attributable to us are expressly qualified in their entirety by this cautionary notice. Such forward-looking statements speak only to the date such statements are made and we do not undertake to update, revise or otherwise publicly

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release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Historical results should not be considered an indication of future performance.

Results of Operations

Net Sales

Net sales primarily relate to the sale of merchandise, including shipping and handling fees, and are reduced by incentive discounts and actual and estimated sales returns. Sales taxes collected are not included in net sales. Digital sales include sales placed through our websites and our mobile applications using tablets and smart phones.

Revenue is recorded when delivery to the customer has occurred. Delivery is considered to have occurred when the customer takes title and assumes the risks and rewards of ownership, which is generally on the date of shipment. HSNi’s sales policy allows customers to return virtually all merchandise for a full refund or exchange, subject to pre-established time restrictions.

	Three Months Ended March 31,
	2016		Change	2015
	(Dollars in thousands)
HSN	$	578,383	(4)%	$	600,492
Cornerstone	238,382		(1)%	241,395
Total HSNi net sales	$	816,765	(3)%	$	841,887

HSNi net sales in the first quarter of 2016 decreased 3%, or $25.1 million, due to a 4% sales decline at HSN and a 1% decline at Cornerstone. Digital sales grew 3% with penetration increasing 290 basis points to 51.5%. Gross units shipped in the first quarter of 2016 decreased 1.2% to 15.0 million and the average price point decreased 3.0% to $59.99.

HSN

HSN net sales in the first quarter of 2016 decreased 4%, or $22.1 million. Sales grew in electronics, wellness and culinary largely driven by increases in air-time on the HSN networks, offset by decreases in other categories.  Approximately half of the decline in net sales was attributable to the conclusion of a direct-response television marketing campaign during the current quarter. Sales from HSN's wholesale business increased in 2016 driven by an expanded product assortment sold to additional retail stores. Overall, the wholesale business represented 1.4% of HSN's net sales in the current quarter compared to 0.5% in the prior year. Digital sales grew 4% and penetration increased 310 basis points to 43.8%. The return rate decreased 90 basis points from 17.7% to 16.8% primarily due to a shift in sales mix to categories with lower return rates. Units shipped increased 0.2% to 12.1 million and average price point decreased 5.4% to $54.18.

Divisional retail product sales mix at HSN is provided in the table below:

	Three Months Ended March 31,
	2016		2015
Jewelry	8.4	%	9.3	%
Fashion (apparel & accessories)	15.4	%	15.2	%
Beauty & Health (including beauty, wellness and fitness)	30.0	%	30.3	%
Home & Other (including home, electronics, culinary and other) (a)	46.2	%	45.2	%
Total	100.0	%	100.0	%
(a) Includes product sold through direct-response television marketing.

Cornerstone

Cornerstone net sales in the first quarter of 2016 decreased 1%, or $3.0 million, due to lower sales in the apparel brands which were impacted by a decrease in catalog circulation. Digital sales grew 2% with penetration increasing 190 basis points to 70.0%. Catalog circulation was 83.7 million, consistent with the prior year. The return rate was 13.2% compared to 13.3% in the prior year.

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The brand mix at Cornerstone is provided in the table below (as a percentage of net sales):

	Three Months Ended March 31,
	2016		2015
Home brands (Ballard Designs, Frontgate, Grandin Road and Improvements)	76.7	%	75.2	%
Apparel brands (Chasing Fireflies, Garnet Hill and TravelSmith)	23.3	%	24.8	%
Total	100.0	%	100.0	%

Cost of Sales and Gross Profit

Cost of sales consists primarily of the cost of products sold, shipping and handling costs and compensation and other employee-related costs for personnel engaged in supply chain functions. Cost of products sold includes merchandise cost, inbound freight and duties and certain allocable general and administrative costs, including certain warehouse costs.

	Three Months Ended March 31,
	2016			Change	2015
	(Dollars in thousands)
Gross profit:
HSN	$	199,285		(4)%	$	207,530
As a percentage of HSN net sales	34.5		%	(10 bps)	34.6		%
Cornerstone	$	90,193		(3)%	$	92,676
As a percentage of Cornerstone net sales	37.8		%	(60 bps)	38.4		%
HSNi	$	289,478		(4)%	$	300,206
As a percentage of HSNi net sales	35.4		%	(30 bps)	35.7		%

bp = basis points

HSN

Gross profit for HSN in the first quarter of 2016 decreased 4%, or $8.2 million. Gross profit as a percentage of net sales decreased 10 basis points to 34.5% primarily due to an increase in shipping promotions and changes in product mix, partially offset by lower procurement costs.

Cornerstone

Gross profit for Cornerstone in the first quarter of 2016 decreased 3%, or $2.5 million. Gross profit as a percentage of net sales decreased 60 basis points to 37.8% primarily due to increased promotional activity in the home brands, partially offset by lower procurement costs.

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Selling and Marketing Expense

Selling and marketing expense consists primarily of advertising and promotional expenditures; compensation and other employee-related costs (including stock-based compensation) for personnel engaged in customer service, sales and merchandising, production and programming functions; on-air distribution costs, including costs to purchase media for direct-response television marketing; and marketing partnership programs. Advertising and promotional expenditures primarily include catalog production and distribution costs and online marketing, including fees paid to search engine companies and third-party distribution partners, as well as other advertising and promotional campaigns. Certain prior period amounts previously included in general and administrative expense have been reclassified to selling and marketing expense to conform to the current year's presentation.

	Three Months Ended March 31,
	2016			Change	2015
	(Dollars in thousands)
HSN	$	105,570		—%	$	105,735
As a percentage of HSN net sales	18.3		%	70 bps	17.6		%
Cornerstone	$	73,591		—%	$	73,471
As a percentage of Cornerstone net sales	30.9		%	50 bps	30.4		%
HSNi	$	179,161		—%	$	179,206
As a percentage of HSNi net sales	21.9		%	60 bps	21.3		%

HSNi's selling and marketing expense in the first quarter of 2016 was $179.2 million, consistent with prior year and was 21.9% of net sales compared to 21.3% in the prior year.

HSN

HSN's selling and marketing expense in the first quarter of 2016 decreased $0.2 million compared to the prior year primarily due to a decrease in media expense related to direct-response television marketing, offset by higher on-air distribution costs driven by expanded carriage of HSN2 and increased advertising costs related to the recent expansion of HSN's wholesale business. Selling and marketing expense was 18.3% of net sales compared to 17.6% in the prior year largely due to the timing of advertising costs to support the recent expansion of the wholesale business.

Cornerstone

Cornerstone's selling and marketing expense in the first quarter of 2016 increased $0.1 million and was 30.9% of net sales compared to 30.4% in the prior year. There was an increase in expenses related to Cornerstone's additional retail and outlet stores that was offset by lower catalog costs.

General and Administrative Expense

General and administrative expense consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in finance, legal, tax, human resources, information technology and executive management functions; bad debts; facilities costs; and fees for professional services. Certain prior period amounts previously included in general and administrative expense have been reclassified to selling and marketing expense to conform to the current year's presentation.

	Three Months Ended March 31,
	2016			Change	2015
	(Dollars in thousands)
HSN	$	37,068		(6)%	$	39,448
As a percentage of HSN net sales	6.4		%	(20 bps)	6.6		%
Cornerstone	$	12,895		(3)%	$	13,294
As a percentage of Cornerstone net sales	5.4		%	(10 bps)	5.5		%
HSNi	$	49,963		(5)%	$	52,742
As a percentage of HSNi net sales	6.1		%	(20 bps)	6.3		%

HSNi’s general and administrative expense in the first quarter of 2016 decreased 5%, or $2.8 million, and was 6.1% of net sales compared to 6.3% in the prior year. The decrease is primarily due to lower employee-related costs and additional costs incurred in the prior year associated with a special cash dividend.

19

HSN

HSN's general and administrative expense in the first quarter of 2016 decreased 6%, or $2.4 million, and was 6.4% of net sales compared to 6.6% in the prior year. The decrease is primarily due to lower employee-related costs, particularly for severance and performance-based incentives, and additional costs incurred in the prior year associated with a special cash dividend.

Cornerstone

Cornerstone's general and administrative expense in the first quarter of 2016 decreased 3%, or $0.4 million, primarily due to a decrease in employee-related costs. Cornerstone's general and administrative expense was 5.4% of net sales, compared to 5.5% in the prior year.

Depreciation and Amortization

	Three Months Ended March 31,
	2016			Change	2015
	(Dollars in thousands)
HSN	$	7,003		(6)%	$	7,419
Cornerstone	3,522			(8)%	3,830
HSNi	$	10,525		(6)%	$	11,249
As a percentage of HSNi net sales	1.3		%	-	1.3		%

Depreciation and amortization in the first quarter of 2016 decreased 6%, or $0.7 million. The depreciation of capital expenditures related to HSN's warehouse automation project is expected to begin when it is put into service in mid-2016.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP measure. Please refer to Note 4 of the Notes to Consolidated Financial Statements for the reconciliation of Adjusted EBITDA to operating income.

	Three Months Ended March 31,
	2016			Change	2015
	(Dollars in thousands)
HSN	$	60,690		(8)%	$	66,190
As a percentage of HSN net sales	10.5		%	(50 bps)	11.0		%
Cornerstone	$	5,042		(28)%	$	6,961
As a percentage of Cornerstone net sales	2.1		%	(80 bps)	2.9		%
HSNi	$	65,732		(10)%	$	73,151
As a percentage of HSNi net sales	8.0		%	(70 bps)	8.7		%

HSNi's Adjusted EBITDA in the first quarter of 2016 decreased 10%, or $7.4 million, and was 8.0% of net sales compared to 8.7% in the prior year. The decrease was primarily due to the 3% decrease in net sales and 30 basis point decline in gross profit as a percentage of net sales. Operating expenses as a percentage of net sales (excluding non-cash charges) were 27.4% compared to 27.0% in the prior year.

HSN

HSN's Adjusted EBITDA for the first quarter of 2016 decreased 8%, or $5.5 million. Net sales and operating expenses declined 4% and 2%, respectively, resulting in Adjusted EBITDA as a percentage of net sales of 10.5% compared to 11.0% in the prior year. Approximately $2.5 million of the decrease in Adjusted EBITDA is due to the conclusion of a direct-response television marketing campaign during the current quarter.

20

Cornerstone

Cornerstone's Adjusted EBITDA for the first quarter of 2016 decreased 28%, or $1.9 million, and was 2.1% of net sales compared to 2.9% in the prior year. The decrease was primarily due to lower sales in the apparel brands and a decrease in gross profit as a percentage of net sales driven largely by higher promotional activity in the home brands. Operating expenses (excluding non-cash charges) decreased $0.6 million and were 35.7% of net sales compared to 35.5% in the prior year.

Operating Income

	Three Months Ended March 31,
	2016			Change	2015
	(Dollars in thousands)
HSN	$	49,645		(10)%	$	54,928
As a percentage of HSN net sales	8.6		%	(50 bps)	9.1		%
Cornerstone	$	184		(91)%	$	2,081
As a percentage of Cornerstone net sales	0.1		%	(80 bps)	0.9		%
HSNi	$	49,829		(13)%	$	57,009
As a percentage of HSNi net sales	6.1		%	(70 bps)	6.8		%

HSNi's operating income in the first quarter of 2016 decreased 13%, or $7.2 million, and was 6.1% of net sales compared to 6.8% in the prior year. The decrease was driven by the 3% decrease in net sales and 30 basis point decline in gross profit as a percentage of net sales, partially offset by a 1.5% decrease in operating expenses.

Other Income (Expense)

	Three Months Ended March 31,
	2016			Change	2015
	(Dollars in thousands)
Interest income	$	25		(34)%	$	40
Interest expense	(4,172		)	25%	(3,337		)
Total other expense, net	$	(4,147	)	26%	$	(3,297	)
As a percentage of HSNi net sales	0.5		%	10 bps	0.4		%

Interest expense for the three months ended March 31, 2016 increased $0.8 million compared to the prior year primarily due to a higher average outstanding debt balance and increase in interest rate, partially offset by the write-off of $0.5 million of deferred financing fees in the prior year related to the credit agreement that was terminated in January 2015.

Income Tax Provision

For the three months ended March 31, 2016 and March 31, 2015, HSNi recorded a tax provisions of $17.1 million and $20.0 million, which represents effective tax rates of 37.4% and 37.3%, respectively.

Liquidity and Capital Resources

As of March 31, 2016, HSNi had $46.8 million of cash and cash equivalents compared to $63.9 million as of December 31, 2015 and $77.5 million as of March 31, 2015.

Net cash provided by operating activities for the three months endedMarch 31, 2016 was $32.4 million compared to $36.3 million in the prior year, a decrease of $3.9 million. Changes in the cash used for working capital were primarily attributable to inventories, accounts receivable and the timing of payments for income taxes and accrued expenses. There was a decrease in cash used for inventories in 2016 compared to the prior year stemming from HSNi's efforts in the first quarter of 2015 to rebuild inventory to more normalized levels. Collections of accounts receivable were lower in 2016 compared to the prior year due to the lower outstanding accounts receivable balance at the end of 2015 compared to 2014.

Net cash used in investing activities for the three months endedMarch 31, 2016 was $5.1 million and was related to capital expenditures primarily for investments in information technology and infrastructure.

21

Net cash used in financing activities for the three months endedMarch 31, 2016 was $44.4 million. Net repayments of HSNi's long-term debt during the current quarter, including for the term loan and revolving credit facility, were $16.2 million. HSNi paid a quarterly cash dividend of $0.35 per share, representing an aggregate payment of $18.3 million. HSNi also paid $8.7 million for approximately 0.2 million shares of common stock repurchased during the three months endedMarch 31, 2016.

On January 27, 2015, HSNi entered into a $1.25 billion five-year syndicated Credit Agreement. The Credit Agreement replaced the prior $600 million credit agreement that was set to expire in April 2017. The Credit Agreement, which includes a $750 million revolving credit facility and a $500 million term loan, may be increased up to $1.75 billion subject to certain conditions and expires January 27, 2020. HSNi drew $500 million from its term loan and $200 million under the revolving credit facility, both under the Credit Agreement, in the first quarter of 2015 to repay in full its existing term loan of $228.1 million and to fund the $524 million special cash dividend that was paid in February 2015.

The Credit Agreement includes various covenants, limitations and events of default customary for similar facilities including a maximum leverage ratio of 3.50x and a minimum interest coverage ratio of 3.00x. HSNi was in compliance with all such covenants as of March 31, 2016 with a leverage ratio of 1.8x and an interest coverage ratio of 24.8x. Loans under the Credit Agreement bear interest at a per annum rate equal to a LIBOR rate plus a predetermined margin that ranges from 1.25% to 2.25% or the Base Rate (as defined in the Credit Agreement) plus a predetermined margin that ranges from 0.25% to 1.25%. HSNi can elect to borrow at either a LIBOR rate or the Base Rate and the predetermined margin is determined by HSNi's leverage ratio. HSNi pays a commitment fee ranging from 0.20% to 0.40% (based on the leverage ratio) on the unused portion of the revolving credit facility.

The amount available under the Credit Agreement is reduced by the amount of commercial and standby letters of credit issued under the revolving credit facility, which totaled $8.6 million as of March 31, 2016. The ability to draw funds under the revolving credit facility is dependent upon meeting the aforementioned financial covenants, which may limit HSNi’s ability to draw the full amount of the facility. As of March 31, 2016, the additional amount that could be borrowed under the revolving credit facility, in consideration of the financial covenants and outstanding letters of credit, was approximately $615.1 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 (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 7 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 the three months ended March 31, 2016, HSNi repurchased approximately 181,000 shares of common stock at a cost of $8.7 million, or an average cost of $48.04 per share. As of March 31, 2016, approximately 2.9 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 investments in information technology, Cornerstone's retail expansion and infrastructure. 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 the second quarter of 2016, HSNi's Board of Directors approved a cash dividend of $0.35 per common share. The dividend will be paid on June 15, 2016 to HSNi's record holders as of June 1, 2016.

Seasonality

HSNi is affected by seasonality, although historically our business has exhibited less seasonality than many other retail businesses. Our sales levels are generally higher in the fourth quarter.

22

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a description of HSNi's market risks, see “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in HSNi's Annual Report on Form 10-K for the year ended December 31, 2015. No material changes have occurred in HSNi's market risks since December 31, 2015.

ITEM 4. CONTROLS AND PROCEDURES

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) promulgated under the Exchange Act) as of March 31, 2016. Based on that evaluation, management has concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and to ensure that information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

23

PART II

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of business, we are involved in various legal matters arising out of our operations. These matters may relate to claims involving property, personal injury, contract, intellectual property (including patent infringement), sales tax, product recalls, regulatory compliance, employment matters and other claims. As of the date of this filing, we are not a party to any legal proceedings that are reasonably expected to have a material adverse effect on our business, results of operations, financial condition or cash flows; however, litigation matters are subject to inherent uncertainties and the results of these matters cannot be predicted with certainty. An unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows. Moreover, any claims or regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. 

See Note 12 - Commitments and Contingencies in Part I, Item 1 for additional information regarding legal matters in which we are involved.  

ITEM 1A. RISK FACTORS

See Part I. Item 1A., “Risk Factors,” of HSNi's Annual Report on Form 10-K for the year ended December 31, 2015, for a detailed discussion of the risk factors affecting HSNi. There have been no material changes from the risk factors described in the annual report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

On January 27, 2015, our Board of Directors authorized us to repurchase up to 4 million shares of our common stock, principally to offset dilution related to HSNi's equity compensation programs. Under the terms of the share repurchase program, HSNi will repurchase its common stock from time to time through privately negotiated or open market transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended, or by any combination of such methods. The timing of repurchases and the actual number of shares repurchased depends on a variety of factors, including the stock price, corporate and regulatory requirements, restrictions under the company’s debt obligations and other market and economic conditions. The repurchase program may be suspended or discontinued by HSNi at any time.

Below is a summary of our common stock repurchases during the first quarter of 2016:

Period	Number of Shares Purchased	Average Price Paid Per Share		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs
January 1, 2016 - January 31, 2016	180,501	$	48.04	180,501	2,871,724
February 1, 2016 - February 29, 2016	—	$	—	—	2,871,724
March 1, 2016 - March 31, 2016	—	$	—	—	2,871,724
	180,501	$	48.04	180,501

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

24

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibit No.	Description of Document	Method of Filing
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act.	Filed herewith
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act	Filed herewith
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith
101	The following financial information from HSNi’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language) and filed electronically herewith: (i) Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015, (ii) Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015, (iii) Consolidated Balance Sheets as of March 31, 2016, December 31, 2015 and March 31, 2015, (iv) Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2016 and Year Ended December 31, 2015, (v) Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015, and (vi) Notes to the Consolidated Financial Statements.	Filed herewith

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 4, 2016	By:	/S/  JUDY A. SCHMELING
		Judy A. Schmeling, Chief Operating Officer and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

26

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a) and RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT, AS AMENDED

I, Mindy Grossman, certify that:

1.    I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2016 of HSN, Inc.

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 4, 2016 By:      /s/ Mindy Grossman

Mindy Grossman

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) and RULE 15d-14(a)

OF THE SECURITIES EXCHANGE ACT, AS AMENDED

I, Judy A. Schmeling, certify that:

1.    I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2016 of HSN, Inc.

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 4, 2016 By: /s/ Judy A. Schmeling

Judy A. Schmeling

Chief Financial Officer and Chief Operating Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES‑OXLEY ACT OF 2002

I, Mindy Grossman, certify, pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)    the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016 of HSN, Inc. (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of HSN, Inc.

Date: May 4, 2016 By: /s/ Mindy Grossman

Mindy Grossman

Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES‑OXLEY ACT OF 2002

I, Judy A. Schmeling, certify, pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)    the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2016 of HSN, Inc. (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of HSN, Inc.

Date: May 4, 2016 By:      /s/ Judy A. Schmeling

Judy A. Schmeling

Chief Financial Officer and Chief Operating Officer

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 03, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	HSN, Inc.
Trading Symbol	HSNI
Entity Central Index Key	0001434729
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		52,285,790
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

XML

Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Net sales	$ 816,765	$ 841,887
Cost of sales	527,287	541,681
Gross profit	289,478	300,206
Operating expenses:
Selling and marketing	179,161	179,206
General and administrative	49,963	52,742
Depreciation and amortization	10,525	11,249
Total operating expenses	239,649	243,197
Operating income	49,829	57,009
Other income (expense):
Interest income	25	40
Interest expense	(4,172)	(3,337)
Total other expense, net	(4,147)	(3,297)
Income before income taxes	45,682	53,712
Income tax provision	(17,097)	(20,023)
Net income	$ 28,585	$ 33,689
Net income per share:
Basic (usd per share)	$ 0.55	$ 0.64
Diluted (usd per share)	$ 0.54	$ 0.63
Shares used in computing earnings per share:
Basic (shares)	52,378	52,573
Diluted (shares)	52,919	53,760
Dividends declared per share	$ 0.35	$ 10.35

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 28,585	$ 33,689
Other comprehensive loss:
Change in fair value of derivative instrument, net of tax	(249)	(499)
Other comprehensive loss, net of tax	(249)	(499)
Comprehensive income	$ 28,336	$ 33,190

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Current assets:
Cash and cash equivalents	$ 46,785	$ 63,926	$ 77,547
Accounts receivable, net of allowance of $19,706, $20,631 and $16,997, respectively	217,878	306,575	218,651
Inventories	441,977	428,025	435,902
Prepaid expenses and other current assets	55,481	45,402	57,547
Total current assets	762,121	843,928	789,647
Property and equipment, net	206,344	211,793	194,023
Intangible assets, net	255,266	255,268	261,864
Goodwill	9,858	9,858	9,858
Other non-current assets	12,718	13,724	9,306
TOTAL ASSETS	1,246,307	1,334,571	1,264,698
Current liabilities:
Accounts payable, trade	209,933	254,704	211,553
Current maturities of long-term debt	25,000	25,000	6,250
Accrued expenses and other current liabilities	204,897	235,042	221,596
Total current liabilities	439,830	514,746	439,399
Long-term debt, less current maturities and net of unamortized deferred financing costs	592,302	608,108	660,557
Deferred income taxes	42,929	44,498	53,889
Other long-term liabilities	20,006	20,657	18,124
Total liabilities	$ 1,095,067	$ 1,188,009	$ 1,171,969
Commitments and contingencies (Note 12)
SHAREHOLDERS’ EQUITY:
Preferred stock $0.01 par value; 25,000,000 authorized shares; no issued shares	$ 0	$ 0	$ 0
Common stock $0.01 par value; 300,000,000 authorized shares; 52,283,382, 52,377,798 and 52,565,318 issued shares at March 31, 2016, December 31, 2015 and March 31, 2015, respectively	523	524	526
Additional paid-in capital	1,062,128	1,085,785	1,167,777
Accumulated deficit	(911,067)	(939,652)	(1,075,202)
Accumulated other comprehensive loss	(344)	(95)	(372)
Total shareholders’ equity	151,240	146,562	92,729
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 1,246,307	$ 1,334,571	$ 1,264,698

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$ 19,706	$ 20,631	$ 16,997
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, authorized shares (shares)	25,000,000	25,000,000	25,000,000
Preferred stock, issued shares (shares)	0	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, authorized shares (shares)	300,000,000	300,000,000	300,000,000
Common stock, issued shares (shares)	52,283,382	52,377,798	52,565,318

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Consolidated Statements Of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive (Loss) Income [Member]
Balance, shares at Dec. 31, 2014		0	52,426
Balance, value at Dec. 31, 2014	$ 602,341	$ 0	$ 524	$ 1,710,581	$ (1,108,891)	$ 127
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	33,689
Other comprehensive income (loss)	(499)
Balance, value at Mar. 31, 2015	92,729
Balance, shares at Dec. 31, 2014		0	52,426
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from stock-based compensation awards, including tax benefit, shares			900
Repurchases of common stock, shares			(948)
Balance, shares at Dec. 31, 2015		0	52,378
Balance, value at Dec. 31, 2014	602,341	$ 0	$ 524	1,710,581	(1,108,891)	127
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	169,239				169,239
Other comprehensive income (loss)	(222)					(222)
Stock-based compensation expense for equity awards	18,408			18,408
Cash dividends declared on common stock	(597,864)			(597,864)
Issuance of common stock from stock-based compensation awards, including tax benefit	(13,170)		(9)	(13,161)
Repurchases of common stock	(58,510)		(9)	(58,501)
Balance, value at Dec. 31, 2015	146,562	$ 0	$ 524	1,085,785	(939,652)	(95)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock from stock-based compensation awards, including tax benefit, shares			86
Repurchases of common stock, shares			(181)
Balance, shares at Mar. 31, 2016		0	52,283
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	28,585
Other comprehensive income (loss)	(249)					(249)
Stock-based compensation expense for equity awards	5,376			5,376
Cash dividends declared on common stock	(18,300)			(18,300)
Issuance of common stock from stock-based compensation awards, including tax benefit	(2,063)		$ (1)	(2,064)
Repurchases of common stock	(8,671)		(2)	(8,669)
Balance, value at Mar. 31, 2016	$ 151,240	$ 0	$ 523	$ 1,062,128	$ (911,067)	$ (344)

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Consolidated Statements Of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Statement of Stockholders' Equity [Abstract]
Issuance of common stock from stock-based compensation awards, tax benefit	$ (254)	$ 12,526

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net income	$ 28,585	$ 33,689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,525	11,249
Stock-based compensation expense	5,376	4,657
Amortization of debt issuance costs	444	831
Deferred income taxes	(1,415)	(1,925)
Bad debt expense	4,588	5,415
Excess tax benefits from stock-based awards	(23)	(3,905)
Other	178	235
Changes in current assets and liabilities:
Accounts receivable	84,109	93,717
Inventories	(13,953)	(37,197)
Prepaid expenses and other assets	(9,248)	(12,159)
Accounts payable, accrued expenses and other current liabilities	(76,725)	(58,258)
Net cash provided by operating activities	32,441	36,349
Cash flows from investing activities:
Capital expenditures	(5,145)	(13,145)
Net cash used in investing activities	(5,145)	(13,145)
Cash flows from financing activities:
Borrowings under term loan	0	500,000
Repayment of term loan	(6,250)	(228,125)
Borrowings under revolving credit facility	45,000	200,000
Repayment of revolving credit facility	(55,000)	(25,000)
Repurchase of common stock	(8,671)	(6,987)
Payments of debt issuance costs	0	(6,584)
Cash dividends paid	(18,300)	(542,748)
Proceeds from issuance of common stock	586	3,816
Tax withholdings related to stock-based awards	(1,825)	(3,919)
Excess tax benefits from stock-based awards	23	3,905
Net cash used in financing activities	(44,437)	(105,642)
Net decrease in cash and cash equivalents	(17,141)	(82,438)
Cash and cash equivalents at beginning of period	63,926	159,985
Cash and cash equivalents at end of period	$ 46,785	$ 77,547

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Organization (Note)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

ORGANIZATION

Company Overview

HSN, Inc. (“HSNi”) is an interactive multi-channel retailer that markets and sells a wide range of third party and proprietary merchandise directly to consumers through various platforms including (i) television home shopping programming broadcast on the HSN television networks and other direct-response television marketing; (ii) catalogs, consisting primarily of the Cornerstone portfolio of leading print catalogs which includes Ballard Designs, Chasing Fireflies, Frontgate, Garnet Hill, Grandin Road, Improvements and TravelSmith; (iii) websites, which consist primarily of HSN.com, joymangano.com and the seven branded websites operated by Cornerstone; (iv) mobile applications; (v) retail and outlet stores; and (vi) wholesale distribution of certain proprietary products to other retailers. HSNi’s television home shopping business, related digital sales, outlet stores and wholesale distribution are referred to herein as “HSN” and all catalog operations, including related digital sales and stores, are collectively referred to herein as “Cornerstone.”

HSN offerings primarily consist of jewelry, fashion (apparel & accessories), beauty & health (including beauty, wellness and fitness), and home & other (including home, electronics, culinary and other). Merchandise offered by Cornerstone primarily consists of home furnishings (including indoor/outdoor furniture, home décor, tabletop, textiles and other home related goods) and apparel & accessories.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). They do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of HSNi's management, all normal recurring adjustments considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of the results that may be expected for a full year. The accompanying unaudited consolidated financial statements should be read in conjunction with HSNi's audited consolidated financial statements and notes thereto for the year ended December 31, 2015. The consolidated balance sheet as of December 31, 2015 and the consolidated statement of shareholders' equity for the year ended December 31, 2015 were derived from the audited consolidated financial statements at that date but may not include all disclosures required by GAAP. Intercompany transactions and accounts have been eliminated in consolidation.

Recent Accounting Developments

Recently Adopted Accounting Standard Updates

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The new standard is limited to the presentation of debt issuance costs and does not affect their recognition and measurement. ASU 2015-03 is effective for periods beginning after December 15, 2015, including interim periods within that annual period. HSNi retrospectively adopted ASU 2015-03 in the first quarter of 2016 resulting in the reclassification of its debt issuance costs from "Other non-current assets" to a deduction from "Long-term debt, less current maturities and net of unamortized deferred financing costs" in the consolidated balance sheets. See Note 6 for additional information regarding the deferred issuance costs.

In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. HSNi prospectively adopted ASU 2015-05 on January 1, 2016 and will apply this guidance to all arrangements entered into or materially modified after the effective date.

Accounting Standard Updates Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Additionally, ASU 2014-09 will disallow the capitalization of direct-response advertising costs which will impact the timing of recognition of Cornerstone's catalog production and distribution costs. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. This standard will now become effective for HSNi in the first quarter of 2018. Early adoption is permitted in the first quarter of 2017. HSNi is in the process of assessing the impact of the adoption of ASU 2014-09 to its consolidated financial statements and is evaluating the accounting, transition method, disclosure requirements and timing of adoption.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis; however, early adoption is permitted. HSNi will adopt ASU 2015-11 on January 1, 2017. HSNi is currently assessing the potential impact ASU 2015-11 will have to its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 requires lessees to reflect most leases on their balance sheet as assets and obligations. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard is to be applied on a modified retrospective method. HSNi is currently assessing the timing of adoption of ASU 2016-02 and the impact it will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) ("ASU 2016-09"). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. HSNi is currently assessing the timing of adoption of ASU 2016-09 and the impact it will have on its consolidated financial statements and related disclosures.

Reclassifications

Reclassifications were made to prior period amounts to conform to the current year's presentation. Changes included the reclassification of certain operating expenses in the consolidated statement of operations and reclassification of deferred income taxes and deferred financing costs in the consolidated balance sheets due to the implementation of recent accounting standard updates. Current deferred tax assets of $31.1 million in the March 31, 2015 consolidated balance sheet were reclassified as non-current and netted against non-current deferred tax liabilities as a result of retrospectively adopting ASU 2015-17, Balance Sheet Classification of Deferred Taxes, in the fourth quarter of 2015.

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Significant Accounting Policies Significant Accounting Policies (Note)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

HSNi prepares its financial statements in conformity with GAAP. These principles require management to make certain estimates and assumptions during the preparation of its consolidated financial statements. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. In the opinion of HSNi's management, the assumptions underlying these interim unaudited financial statements are reasonable.

Significant estimates underlying the accompanying consolidated financial statements include: the determination of the lower of cost or market adjustment for inventory; sales returns and other revenue allowances; the allowance for doubtful accounts; the recoverability of long-lived assets; the impairment of intangible assets; the annual expected effective tax rate; the determination of deferred income taxes, including related valuation allowances; the accrual for actual, pending or threatened litigation, claims and assessments; and assumptions related to the determination of incentive compensation and contingent consideration.

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Property And Equipment (Note)

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Property And Equipment

PROPERTY AND EQUIPMENT

The balance of property and equipment, net, is as follows (in thousands):

	March 31,			December 31,			March 31,
	2016			2015			2015
Capitalized software	$	237,202		$	234,249		$	225,455
Computer and broadcast equipment	93,557			91,533			90,821
Buildings and leasehold improvements	110,887			108,656			105,940
Furniture and other equipment	97,434			96,512			91,106
Projects in progress	51,860			55,294			34,549
Land and land improvements	10,635			10,597			10,542
	601,575			596,841			558,413
Less: accumulated depreciation and amortization	(395,231		)	(385,048		)	(364,390		)
Total property and equipment, net	$	206,344		$	211,793		$	194,023

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Segment Information (Note)

3 Months Ended

Mar. 31, 2016

Segment Reporting Information, Profit (Loss) [Abstract]

Segment Information

SEGMENT INFORMATION

HSNi presents its operating segments and related financial information in a manner consistent with how the chief operating decision maker and executive management view the businesses, how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered and/or the target market. HSNi has two reportable segments, HSN and Cornerstone. The accounting policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies included in HSNi's Annual Report on Form 10-K for the year ended December 31, 2015. Intercompany accounts and transactions have been eliminated in consolidation.

HSNi’s primary performance metric is Adjusted EBITDA, which is defined as operating income excluding, if applicable: (1) non-cash charges including: (a) stock-based compensation expense, (b) amortization of intangibles, (c) depreciation and gains and losses on asset dispositions, and (d) goodwill, long-lived asset and intangible asset impairments; (2) pro forma adjustments for significant acquisitions; and (3) other significant items. Significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, thereby affecting the comparability of results. Adjusted EBITDA is not a measure determined in accordance with GAAP, and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with GAAP. Adjusted EBITDA is used as a measurement of operating efficiency and overall financial performance and HSNi believes it to be a helpful measure for those evaluating companies in the retail and media industries. Adjusted EBITDA has certain limitations in that it does not take into account the impact to HSNi’s consolidated statements of operations of certain expenses, gains and losses; including stock-based compensation, amortization of intangibles, depreciation, gains and losses on asset dispositions, asset impairment charges, acquisition-related accounting expenses and other significant items.

The following tables reconcile Adjusted EBITDA to operating income for HSNi’s operating segments and to HSNi’s consolidated net income (in thousands):

	Three Months Ended March 31, 2016									Three Months Ended March 31, 2015
	HSN			Cornerstone			Total			HSN			Cornerstone			Total
Adjusted EBITDA	$	60,690		$	5,042		$	65,732		$	66,190		$	6,961		$	73,151
Stock-based compensation expense	(4,039		)	(1,337		)	(5,376		)	(3,607		)	(1,050		)	(4,657		)
Depreciation and amortization	(7,003		)	(3,522		)	(10,525		)	(7,419		)	(3,830		)	(11,249		)
Loss on disposition of fixed assets	(3		)	1			(2		)	(236		)	—			(236		)
Operating income	$	49,645		$	184		49,829			$	54,928		$	2,081		57,009
Total other expense, net							(4,147		)							(3,297		)
Income before income taxes							45,682									53,712
Income tax provision							(17,097		)							(20,023		)
Net income							$	28,585								$	33,689

The net sales for each of HSNi's reportable segments are as follows (in thousands):

	Three Months Ended March 31,
	2016		2015
Net sales:
HSN	$	578,383	$	600,492
Cornerstone	238,382		241,395
Total	$	816,765	$	841,887

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Earnings Per Share (Note)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share

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.

The following table presents HSNi’s basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended March 31,
	2016		2015
Net income	$28,585		$33,689
Weighted average number of shares outstanding:
Basic	52,378		52,573
Dilutive effect of stock-based compensation awards	541		1,187
Diluted	52,919		53,760
Net income per share:
Basic	$	0.55	$	0.64
Diluted	$	0.54	$	0.63
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	1,919		527

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Long-Term Debt (Note)

3 Months Ended

Mar. 31, 2016

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

LONG-TERM DEBT

The balance of long-term debt, including current maturities, is as follows (in thousands):

	March 31,			December 31,			March 31,
	2016			2015			2015
Secured credit agreement expiring January 27, 2020:
Term loan	$	493,750		$	500,000		$	500,000
Revolving credit facility	130,000			140,000			175,000
Long-term debt	623,750			640,000			675,000
Unamortized deferred financing costs	(6,448		)	(6,892		)	(8,193		)
Long-term debt, net of unamortized deferred financing costs	617,302			633,108			666,807
Less: current maturities	(25,000		)	(25,000		)	(6,250		)
Long-term debt, less current maturities and net of unamortized deferred financing costs	$	592,302		$	608,108		$	660,557

On January 27, 2015, HSNi entered into a $1.25 billionfive-year syndicated credit agreement ("Credit Agreement") which is secured by 100% of the voting equity securities of HSNi's U.S. subsidiaries and 65% of HSNi's first-tier foreign subsidiaries. This Credit Agreement replaced the credit agreement that was set to expire in April 2017. Certain HSNi subsidiaries have unconditionally guaranteed HSNi's obligations under the Credit Agreement.  The Credit Agreement, which includes a $750 million revolving credit facility and a $500 million term loan, may be increased up to $1.75 billion subject to certain conditions and expires January 27, 2020. HSNi drew $200 million from its term loan under the Credit Agreement on January 27, 2015 to repay in full its existing term loan of $228.1 million. HSNi drew the remaining $300 million from the term loan and $200 million under the revolving credit facility, both under the Credit Agreement, on February 18, 2015 to fund a $524 million special cash dividend that was paid on February 19, 2015.

In connection with the termination of the prior credit agreement, $0.5 million of the $2.4 million of unamortized deferred financing costs were expensed in the first quarter of 2015. The remaining balance of $1.9 million along with the $6.6 million in capitalized financing costs related to the Credit Agreement are being amortized to interest expense over the five-year term of the Credit Agreement. Capitalized financing costs, net of accumulated amortization, are presented as a deduction from the corresponding debt liability for all periods presented.

The Credit Agreement includes various covenants, limitations and events of default customary for similar facilities including a maximum leverage ratio of 3.50x and a minimum interest coverage ratio of 3.00x. HSNi was in compliance with all such covenants as of March 31, 2016 with a leverage ratio of 1.8x and an interest coverage ratio of 24.8x. The Credit Agreement also contains covenants that limit our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, pay dividends or make other distributions to third parties, repurchase or redeem our stock, make investments, sell assets, incur liens, enter into agreements restricting our subsidiaries' ability to pay dividends, enter into transactions with affiliates and consolidate, merge or sell all or substantially all of our assets. Dividends, loans or advances to HSNi by its subsidiaries are not restricted by the Credit Agreement.

Loans under the Credit Agreement bear interest at a per annum rate equal to LIBOR plus a predetermined margin that ranges from 1.25% to 2.25% or the Base Rate (as defined in the Credit Agreement) plus a predetermined margin that ranges from 0.25% to 1.25%.  HSNi can elect to borrow at either LIBOR or the Base Rate plus a predetermined margin which is determined by HSNi's leverage ratio. The interest rate on the $623.8 million outstanding long-term debt balance as of March 31, 2016 was 1.93%.  HSNi pays a commitment fee ranging from 0.20% to 0.40% (based on the leverage ratio) on the unused portion of the revolving credit facility. 

The amount available to HSNi under the revolving credit facility portion of the Credit Agreement is reduced by the amount of outstanding letters of credit issued under the revolving credit facility, which totaled $8.6 million as of March 31, 2016. The ability to draw funds under the revolving credit facility is dependent upon meeting the aforementioned financial covenants. As of March 31, 2016, the amount that could be borrowed under the revolving credit facility, after consideration of the financial covenants and the outstanding letters of credit, was approximately $615.1 million.

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Derivative Instruments (Note)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

HSNi uses derivatives in the management of its interest rate risk with respect to its variable rate debt. HSNi's strategy is to eliminate the cash flow risk on a portion of its variable rate debt caused by changes in the benchmark interest rate (LIBOR). Derivative instruments are not entered into for speculative purposes.

HSNi entered into a forward-starting interest rate swap agreement on December 20, 2012 with a notional amount of $187.5 million at a fixed rate of 0.8525%, resulting in an all-in fixed rate of 2.3525% based on HSNi's leverage ratio as of March 31, 2016. The interest rate swap took effect on January 31, 2014 with a maturity date in April 2017. Under this swap, HSNi pays at a fixed rate and receives payments at a variable rate based on one-month LIBOR. The swap effectively fixes the floating LIBOR-based interest of our outstanding LIBOR-based debt. The interest rate swap was designated and qualified as a cash flow hedge; therefore, the effective portion of the changes in fair value is recorded in accumulated other comprehensive income (loss). Any ineffective portions of the changes in fair value of the interest rate swap will be immediately recognized in earnings in the consolidated statements of operations. The changes in fair value of the interest rate swap (inclusive of reclassifications to net income and net of tax) for the three months ended March 31, 2016 and 2015 were losses of approximately $0.2 million and $0.5 million, respectively, and were included in other comprehensive income (loss).

The fair values of the interest rate swap at March 31, 2016, December 31, 2015 and March 31, 2015 were liabilities of $0.6 million, $0.2 million and $0.6 million, respectively, and were recorded in "Other long-term liabilities" in the consolidated balance sheets. HSNi estimates that approximately $0.5 million of unrealized losses included in accumulated other comprehensive loss related to this swap will be realized and reported in earnings within the next twelve months. See Note 8 for discussion of the fair value measurements concerning this interest rate swap.

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Fair Value Measurements (Note)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value assumptions are made at a specific point in time and changes in underlying assumptions could significantly affect these estimates. HSNi applies the following framework for measuring fair value which is based on a three-level hierarchy:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The following table summarizes the fair value of HSNi's other financial assets and liabilities which are measured at fair value on a recurring basis in the consolidated balance sheets (in thousands):

	March 31, 2016
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	552	$	—	$	552	$	—

	December 31, 2015
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	169	$	—	$	169	$	—

	March 31, 2015
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	596	$	—	$	596	$	—

HSNi's interest rate swap is carried on the balance sheet at fair value. The swap was entered into in December 2012 for the purpose of hedging the variability of interest expense and interest payments on HSNi's long-term variable rate debt. The fair value is based on a valuation model which utilizes interest rate yield curves and credit spreads as the significant inputs to the model. These inputs are observable in active markets (level 2 criteria). HSNi considers credit risk associated with its own standing as well as the credit standing of any counterparties involved in the valuation of its financial instruments.

The following table summarizes the fair value of HSNi’s financial assets and liabilities which are carried at cost (in thousands):

	March 31, 2016
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	493,750	$	493,750	$	—	$	493,750	$	—
Revolving credit facility	$	130,000	$	130,000	$	—	$	130,000	$	—

	December 31, 2015
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	500,000	$	500,000	$	—	$	500,000	$	—
Revolving credit facility	$	140,000	$	140,000	$	—	$	140,000	$	—

	March 31, 2015
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	500,000	$	500,000	$	—	$	500,000	$	—
Revolving credit facility	$	175,000	$	175,000	$	—	$	175,000	$	—

The fair value of the term loan was estimated by discounting expected cash flows at the rates currently offered to HSNi for debt of the same remaining maturities (level 2 criteria).

HSNi assesses the impairment of goodwill and indefinite-lived intangible assets at fair value at least annually during the fourth quarter and whenever events or circumstances indicate that the carrying value may not be fully recoverable. Cornerstone continues to assess its brand portfolio, which could result in the divestiture of underperforming, less strategic brands. HSNi considered but determined it had no triggering events requiring an impairment assessment of its long-lived and intangible assets existed as of March 31, 2016 and 2015.

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Income Taxes (Note)

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

HSNi calculates its interim income tax provision in accordance with the accounting guidance for income taxes in interim periods. At the end of each interim period, HSNi makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date income or loss. The tax or benefit related to significant or unusual items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur.

In addition, the effect of changes in enacted tax laws or rates, tax status, or judgment on the realizability of beginning-of-the-year deferred taxes in future years is recognized in the interim period in which the change occurs.

The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter.

For the three months ended March 31, 2016, HSNi recorded a tax provision of $17.1 million which represents an effective tax rate of 37.4%. For the three months ended March 31, 2015, HSNi recorded a tax provision of $20.0 million which represents an effective tax rate of 37.3%.

The Internal Revenue Service ("IRS") has concluded its examination of HSNi's consolidated federal income tax return for the year ended December 31, 2010 and its limited scope examination of HSNi's consolidated federal income tax return for the year ended December 31, 2011. No material adjustments resulted from these IRS examinations. There are currently no income tax examinations in progress. New York State concluded an income tax examination of the years ended December 31, 2011 through December 31, 2013. No material adjustment to our tax liabilities resulted from this examination.

HSNi and several companies previously owned by IAC/InterActiveCorp, or IAC, were spun-off from IAC on August 20, 2008. In connection with the spin-off, HSNi entered into a Tax Sharing Agreement with IAC. Pursuant to this agreement, each of the companies included in the spin-off (the "Spincos") was indemnified by IAC for additional tax liabilities related to consolidated or combined federal and state tax returns prepared and filed by IAC prior to the spin-off. However, each Spinco agreed to, among other things, assume any additional tax liabilities related to their separately filed state income tax returns. All examinations have concluded or statutes of limitations have expired related to IAC's consolidated or combined federal and state tax returns for years including HSNi operations prior to the spin-off.

The Tax Sharing Agreement also provides, among other things, that each Spinco indemnifies IAC and the other Spincos for any taxes resulting from the spin-off of such Spinco (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related shareholder litigation or controversies) to the extent such amounts result from any post spin-off (i) act or failure to act by such Spinco described in the covenants in the Tax Sharing Agreement, (ii) acquisition of equity, securities, or assets of such Spinco or a member of its group, and (iii) breach by such Spinco or any member of its group of any representation or covenant contained in the separation documents or in the documents relating to the IRS private letter ruling and/or tax opinions. This indemnification remains effective until IAC's tax returns for the two year period after the spin-off are no longer subject to examination.

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Stock-Based Awards (Note)

3 Months Ended

Mar. 31, 2016

Share-based Compensation [Abstract]

Stock-Based Awards

STOCK-BASED AWARDS

Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2016			2015
Selling and marketing	$	1,808		$	1,554
General and administrative	3,568			3,103
Stock-based compensation expense before income taxes	5,376			4,657
Income tax benefit	(1,876		)	(1,651		)
Stock-based compensation expense after income taxes	$	3,500		$	3,006

As of March 31, 2016, there was approximately $36.3 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 2.2 years.

The Second Amended and Restated 2008 Stock and Annual Incentive Plan, as amended (the “Plan”), authorizes the issuance of 8.0 million shares (8.8 million shares after giving effect to the anti-dilution provisions of the Plan related to the special cash dividend paid in February 2015) of HSNi common stock for new awards granted by HSNi. The purpose of the Plan is to assist HSNi in attracting, retaining and motivating officers, employees, directors and consultants, and to provide HSNi with the ability to provide incentives more directly linked to the profitability of HSNi’s business and increases in shareholder value. As of March 31, 2016, there were approximately 1.5 million shares of common stock available for grants under the Plan.

During the first quarter of 2016, HSNi granted approximately 92,000 performance share units ("PSUs") to certain executive employees. PSUs vest after a three year performance period. PSUs have rights to receive dividend equivalents that vest concurrently with the underlying PSUs once the requisite service has been rendered. Vesting percentages range between 0% and 200% of the target award based on HSNi's Total Shareholder Return relative to a peer group at the end of the performance period.

A summary of the stock-based awards granted during the three months endedMarch 31, 2016 is as follows:

	Three Months Ended March 31, 2016
	Number of Awards Granted	Weighted Average per Share Fair Value
Stock appreciation rights	928,990	$7.31
Restricted stock units	225,271	$44.89
Performance share units	92,290	$54.06
Employee stock purchase plan options	29,965	$12.18
Dividend equivalents due to quarterly dividend	5,724	-

The fair values of the options granted under the HSN, Inc. 2010 Employee Stock Purchase Plan and the stock appreciation rights are estimated on the grant date using the Black-Scholes option pricing model. The fair value of PSUs is estimated on the grant date using a Monte-Carlo simulation pricing model which estimates the potential outcome of reaching the market condition based on simulated future stock prices. The weighted average assumptions used in the valuation of each for the three months ended March 31, 2016 are as follows:

	Three Months Ended March 31, 2016
	Stock Appreciation Rights		Employee Stock Purchase Plan Options		Performance Share Units
Volatility factor	26.3	%	34.4	%	25.2	%
Risk-free interest rate	1.23	%	0.49	%	0.89	%
Expected term	4.5		0.5		2.9
Dividend yield	3.1	%	2.8	%	0.0	%

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Shareholders' Equity (Note)

3 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

Shareholders' Equity

SHAREHOLDERS’ EQUITY

Share Repurchase Program

Effective January 27, 2015, HSNi’s Board of Directors approved a share repurchase program which allows HSNi to purchase up to 4 million shares of its common stock from time to time through privately negotiated and/or open market transactions. The timing of 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 the three months ended March 31, 2016, HSNi acquired approximately 181,000 shares of its outstanding common stock for $8.7 million at an average price of $48.04. All shares were retired immediately following purchase. As of March 31, 2016, approximately 2.9 million shares remain authorized for repurchase under the program.

Dividend Policy

In the first quarter of 2016, HSNi's Board of Directors approved a quarterly cash dividend of $0.35 per common share resulting in a payment of $18.3 million on March 23, 2016 to HSNi's shareholders of record as of March 9, 2016.

In the second quarter of 2016, HSNi's Board of Directors approved a quarterly cash dividend of $0.35 per common share. The dividend will be paid on June 15, 2016 to HSNi's shareholders of record as of June 1, 2016.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes the cumulative gains and losses of derivative instruments that qualify as cash flow hedges. The following table provides a rollforward of accumulated other comprehensive income (loss) (in thousands):

	Three Months Ended March 31,
	2016			2015
Accumulated other comprehensive income (loss) as of January 1,	$	(95	)	$	127
Other comprehensive loss before reclassifications	(603		)	(1,124		)
Amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the consolidated statements of operations	200			320
Income tax benefit	154			305
Other comprehensive loss, net of tax	(249		)	(499		)
Accumulated other comprehensive income (loss) as of March 31,	$	(344	)	$	(372	)

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Commitments And Contingencies (Note)

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, HSNi is a party to various audits, claims and lawsuits. These audits or litigation may relate to claims involving property, personal injury, contract, intellectual property (including patent infringement), sales tax, product recalls, regulatory compliance, employment matters and other claims. HSNi has established reserves for specific legal, tax or other compliance matters for which it has determined the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain legal, tax or other matters where it believes an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that an unfavorable resolution of claims against HSNi, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on its liquidity, results of operations, financial condition or cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future and an unfavorable resolution of such a proceeding could have a material impact. Moreover, any claims or regulatory actions against HSNi, whether meritorious or not, could be time-consuming, result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources.

HSNi also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 9 for discussion related to income tax contingencies.

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Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Note)

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure

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.

A summary of HSNi’s liability associated with exit activities, which is recorded in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheets, are presented in the following table (in thousands):

	Employee Related Costs
Balance at January 1, 2016	$	3,221
Provisions	—
Payments	—
Adjustments	—
Balance at March 31, 2016	$	3,221

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Organization Recent Accounting Developments (Policies)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Developments

Recently Adopted Accounting Standard Updates

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The new standard is limited to the presentation of debt issuance costs and does not affect their recognition and measurement. ASU 2015-03 is effective for periods beginning after December 15, 2015, including interim periods within that annual period. HSNi retrospectively adopted ASU 2015-03 in the first quarter of 2016 resulting in the reclassification of its debt issuance costs from "Other non-current assets" to a deduction from "Long-term debt, less current maturities and net of unamortized deferred financing costs" in the consolidated balance sheets. See Note 6 for additional information regarding the deferred issuance costs.

In April 2015, the FASB issued ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. HSNi prospectively adopted ASU 2015-05 on January 1, 2016 and will apply this guidance to all arrangements entered into or materially modified after the effective date.

Accounting Standard Updates Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Additionally, ASU 2014-09 will disallow the capitalization of direct-response advertising costs which will impact the timing of recognition of Cornerstone's catalog production and distribution costs. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09. This standard will now become effective for HSNi in the first quarter of 2018. Early adoption is permitted in the first quarter of 2017. HSNi is in the process of assessing the impact of the adoption of ASU 2014-09 to its consolidated financial statements and is evaluating the accounting, transition method, disclosure requirements and timing of adoption.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis; however, early adoption is permitted. HSNi will adopt ASU 2015-11 on January 1, 2017. HSNi is currently assessing the potential impact ASU 2015-11 will have to its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 requires lessees to reflect most leases on their balance sheet as assets and obligations. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard is to be applied on a modified retrospective method. HSNi is currently assessing the timing of adoption of ASU 2016-02 and the impact it will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718) ("ASU 2016-09"). This standard makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. The effective date for the standard is for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted. HSNi is currently assessing the timing of adoption of ASU 2016-09 and the impact it will have on its consolidated financial statements and related disclosures.

Reclassifications

Reclassifications were made to prior period amounts to conform to the current year's presentation. Changes included the reclassification of certain operating expenses in the consolidated statement of operations and reclassification of deferred income taxes and deferred financing costs in the consolidated balance sheets due to the implementation of recent accounting standard updates. Current deferred tax assets of $31.1 million in the March 31, 2015 consolidated balance sheet were reclassified as non-current and netted against non-current deferred tax liabilities as a result of retrospectively adopting ASU 2015-17, Balance Sheet Classification of Deferred Taxes, in the fourth quarter of 2015.

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Significant Accounting Policies Signficant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Accounting Estimates

HSNi prepares its financial statements in conformity with GAAP. These principles require management to make certain estimates and assumptions during the preparation of its consolidated financial statements. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. In the opinion of HSNi's management, the assumptions underlying these interim unaudited financial statements are reasonable.

Significant estimates underlying the accompanying consolidated financial statements include: the determination of the lower of cost or market adjustment for inventory; sales returns and other revenue allowances; the allowance for doubtful accounts; the recoverability of long-lived assets; the impairment of intangible assets; the annual expected effective tax rate; the determination of deferred income taxes, including related valuation allowances; the accrual for actual, pending or threatened litigation, claims and assessments; and assumptions related to the determination of incentive compensation and contingent consideration.

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Property And Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Schedule Of Property And Equipment

The balance of property and equipment, net, is as follows (in thousands):

	March 31,			December 31,			March 31,
	2016			2015			2015
Capitalized software	$	237,202		$	234,249		$	225,455
Computer and broadcast equipment	93,557			91,533			90,821
Buildings and leasehold improvements	110,887			108,656			105,940
Furniture and other equipment	97,434			96,512			91,106
Projects in progress	51,860			55,294			34,549
Land and land improvements	10,635			10,597			10,542
	601,575			596,841			558,413
Less: accumulated depreciation and amortization	(395,231		)	(385,048		)	(364,390		)
Total property and equipment, net	$	206,344		$	211,793		$	194,023

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting Information, Profit (Loss) [Abstract]

Adjusted EBITDA To Operating Income (Loss) And Consolidated Net Income

The following tables reconcile Adjusted EBITDA to operating income for HSNi’s operating segments and to HSNi’s consolidated net income (in thousands):

	Three Months Ended March 31, 2016									Three Months Ended March 31, 2015
	HSN			Cornerstone			Total			HSN			Cornerstone			Total
Adjusted EBITDA	$	60,690		$	5,042		$	65,732		$	66,190		$	6,961		$	73,151
Stock-based compensation expense	(4,039		)	(1,337		)	(5,376		)	(3,607		)	(1,050		)	(4,657		)
Depreciation and amortization	(7,003		)	(3,522		)	(10,525		)	(7,419		)	(3,830		)	(11,249		)
Loss on disposition of fixed assets	(3		)	1			(2		)	(236		)	—			(236		)
Operating income	$	49,645		$	184		49,829			$	54,928		$	2,081		57,009
Total other expense, net							(4,147		)							(3,297		)
Income before income taxes							45,682									53,712
Income tax provision							(17,097		)							(20,023		)
Net income							$	28,585								$	33,689

Financial Information By Segment

The net sales for each of HSNi's reportable segments are as follows (in thousands):

	Three Months Ended March 31,
	2016		2015
Net sales:
HSN	$	578,383	$	600,492
Cornerstone	238,382		241,395
Total	$	816,765	$	841,887

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Basic And Diluted Earnings Per Share

The following table presents HSNi’s basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended March 31,
	2016		2015
Net income	$28,585		$33,689
Weighted average number of shares outstanding:
Basic	52,378		52,573
Dilutive effect of stock-based compensation awards	541		1,187
Diluted	52,919		53,760
Net income per share:
Basic	$	0.55	$	0.64
Diluted	$	0.54	$	0.63
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	1,919		527

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2016

Long-term Debt, Unclassified [Abstract]

Schedule Of Long-Term Debt

The balance of long-term debt, including current maturities, is as follows (in thousands):

	March 31,			December 31,			March 31,
	2016			2015			2015
Secured credit agreement expiring January 27, 2020:
Term loan	$	493,750		$	500,000		$	500,000
Revolving credit facility	130,000			140,000			175,000
Long-term debt	623,750			640,000			675,000
Unamortized deferred financing costs	(6,448		)	(6,892		)	(8,193		)
Long-term debt, net of unamortized deferred financing costs	617,302			633,108			666,807
Less: current maturities	(25,000		)	(25,000		)	(6,250		)
Long-term debt, less current maturities and net of unamortized deferred financing costs	$	592,302		$	608,108		$	660,557

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value For Other Financial Liabilities

The following table summarizes the fair value of HSNi's other financial assets and liabilities which are measured at fair value on a recurring basis in the consolidated balance sheets (in thousands):

	March 31, 2016
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	552	$	—	$	552	$	—

	December 31, 2015
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	169	$	—	$	169	$	—

	March 31, 2015
		Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
				Level 1		Level 2		Level 3
Liabilities:
Interest rate swap		$	596	$	—	$	596	$	—

Fair Value Of Assets And Liabilities

The following table summarizes the fair value of HSNi’s financial assets and liabilities which are carried at cost (in thousands):

	March 31, 2016
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	493,750	$	493,750	$	—	$	493,750	$	—
Revolving credit facility	$	130,000	$	130,000	$	—	$	130,000	$	—

	December 31, 2015
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	500,000	$	500,000	$	—	$	500,000	$	—
Revolving credit facility	$	140,000	$	140,000	$	—	$	140,000	$	—

	March 31, 2015
	Carrying Value		Fair Value		Fair Value Measurement Category
					Level 1		Level 2		Level 3
Term loan expiring January 27, 2020	$	500,000	$	500,000	$	—	$	500,000	$	—
Revolving credit facility	$	175,000	$	175,000	$	—	$	175,000	$	—

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Stock-Based Awards (Tables)

3 Months Ended

Mar. 31, 2016

Share-based Compensation [Abstract]

Stock-Based Compensation Expense

Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2016			2015
Selling and marketing	$	1,808		$	1,554
General and administrative	3,568			3,103
Stock-based compensation expense before income taxes	5,376			4,657
Income tax benefit	(1,876		)	(1,651		)
Stock-based compensation expense after income taxes	$	3,500		$	3,006

Summary of Stock-Based Awards Granted

A summary of the stock-based awards granted during the three months endedMarch 31, 2016 is as follows:

	Three Months Ended March 31, 2016
	Number of Awards Granted	Weighted Average per Share Fair Value
Stock appreciation rights	928,990	$7.31
Restricted stock units	225,271	$44.89
Performance share units	92,290	$54.06
Employee stock purchase plan options	29,965	$12.18
Dividend equivalents due to quarterly dividend	5,724	-

Weighted Average Assumptions Used In Black-Scholes Option Pricing Model

The weighted average assumptions used in the valuation of each for the three months ended March 31, 2016 are as follows:

	Three Months Ended March 31, 2016
	Stock Appreciation Rights		Employee Stock Purchase Plan Options		Performance Share Units
Volatility factor	26.3	%	34.4	%	25.2	%
Risk-free interest rate	1.23	%	0.49	%	0.89	%
Expected term	4.5		0.5		2.9
Dividend yield	3.1	%	2.8	%	0.0	%

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Shareholders' Equity Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table provides a rollforward of accumulated other comprehensive income (loss) (in thousands):

	Three Months Ended March 31,
	2016			2015
Accumulated other comprehensive income (loss) as of January 1,	$	(95	)	$	127
Other comprehensive loss before reclassifications	(603		)	(1,124		)
Amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the consolidated statements of operations	200			320
Income tax benefit	154			305
Other comprehensive loss, net of tax	(249		)	(499		)
Accumulated other comprehensive income (loss) as of March 31,	$	(344	)	$	(372	)

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Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Tables)

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost

A summary of HSNi’s liability associated with exit activities, which is recorded in “Accrued expenses and other current liabilities” in the accompanying consolidated balance sheets, are presented in the following table (in thousands):

	Employee Related Costs
Balance at January 1, 2016	$	3,221
Provisions	—
Payments	—
Adjustments	—
Balance at March 31, 2016	$	3,221

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Organization Reclassifications (Details) $ in Millions	Mar. 31, 2015 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deferred Tax Assets, Net, Current	$ 31.1

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Property And Equipment (Schedule Of Property And Equipment) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Property, Plant and Equipment [Abstract]
Capitalized software	$ 237,202	$ 234,249	$ 225,455
Computer and broadcast equipment	93,557	91,533	90,821
Buildings and leasehold improvements	110,887	108,656	105,940
Furniture and other equipment	97,434	96,512	91,106
Projects in progress	51,860	55,294	34,549
Land and land improvements	10,635	10,597	10,542
Property and equipment, gross	601,575	596,841	558,413
Less: accumulated depreciation and amortization	(395,231)	(385,048)	(364,390)
Total property and equipment, net	$ 206,344	$ 211,793	$ 194,023

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Segment Information (Adjusted EBITDA To Operating Income (Loss) And Consolidated Net Income) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Adjusted EBITDA	$ 65,732	$ 73,151
Stock-based compensation expense	(5,376)	(4,657)
Depreciation and amortization	(10,525)	(11,249)
Loss on disposition of fixed assets	(2)	(236)
Operating income	49,829	57,009
Total other expense, net	(4,147)	(3,297)
Income before income taxes	45,682	53,712
Income tax provision	(17,097)	(20,023)
Net income	28,585	33,689	$ 169,239
HSN [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	60,690	66,190
Stock-based compensation expense	(4,039)	(3,607)
Depreciation and amortization	(7,003)	(7,419)
Loss on disposition of fixed assets	(3)	(236)
Operating income	49,645	54,928
Cornerstone [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	5,042	6,961
Stock-based compensation expense	(1,337)	(1,050)
Depreciation and amortization	(3,522)	(3,830)
Loss on disposition of fixed assets	1	0
Operating income	$ 184	$ 2,081

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Segment Information (Financial Information By Segment) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Net sales	$ 816,765	$ 841,887
HSN [Member]
Segment Reporting Information [Line Items]
Net sales	578,383	600,492
Cornerstone [Member]
Segment Reporting Information [Line Items]
Net sales	$ 238,382	$ 241,395

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Earnings Per Share (Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Net income:
Net income	$ 28,585	$ 33,689	$ 169,239
Weighted average number of shares outstanding:
Basic	52,378	52,573
Dilutive effect of stock-based compensation awards	541	1,187
Diluted	52,919	53,760
Net income per share:
Basic (usd per share)	$ 0.55	$ 0.64
Diluted (usd per share)	$ 0.54	$ 0.63
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	1,919	527

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Long-Term Debt (Schedule Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Jan. 27, 2015
Debt Instrument [Line Items]
Less: current maturities	$ (25,000)	$ (25,000)	$ (6,250)
Long-term debt, less current maturities and net of unamortized deferred financing costs	592,302	608,108	660,557
Term Loan [Member]
Debt Instrument [Line Items]
Secured credit	493,750	500,000	500,000
Revolving credit facility [Member]
Debt Instrument [Line Items]
Secured credit	130,000	140,000	175,000
Credit Agreement Terminated January 27, 2015 [Member]
Debt Instrument [Line Items]
Deferred Finance Costs, Noncurrent, Net		(2,400)		$ (1,900)
Long-term debt, net of unamortized deferred financing costs				228,100
Credit Agreement 1.25B [Member]
Debt Instrument [Line Items]
Secured credit				1,250,000
Long-term Debt, Gross	623,750	640,000	675,000
Deferred Finance Costs, Noncurrent, Net	(6,448)	(6,892)	(8,193)	$ (6,600)
Long-term debt, net of unamortized deferred financing costs	617,302	633,108	666,807
Less: current maturities	(25,000)	(25,000)	(6,250)
Credit Agreement 1.25B [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Secured credit	493,750	500,000	500,000
Credit Agreement 1.25B [Member] | Revolving credit facility [Member]
Debt Instrument [Line Items]
Secured credit	$ 130,000	$ 140,000	$ 175,000

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Long-Term Debt (Narrative) (Details)			3 Months Ended
	Feb. 19, 2015 USD ($)	Jan. 27, 2015 USD ($)	Mar. 31, 2016 USD ($) Rate	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Borrowings under term loan			$ 0	$ 500,000,000
Dividends, Cash	$ 524,000,000
Revolving credit facility [Member]
Debt Instrument [Line Items]
Secured credit			130,000,000	175,000,000	$ 140,000,000
Credit Agreement Terminated January 27, 2015 [Member]
Debt Instrument [Line Items]
Long-term Debt		$ 228,100,000
Write off of Deferred Debt Issuance Cost				500,000
Deferred Finance Costs, Noncurrent, Net		1,900,000			2,400,000
Credit Agreement 1.25B [Member]
Long-term Debt, Unclassified [Abstract]
Long-term Debt, Gross			623,750,000	675,000,000	640,000,000
Debt Instrument [Line Items]
Secured credit		$ 1,250,000,000
Term of debt		5 years
Maximum borrowing capacity		$ 1,750,000,000
Long-term Debt			617,302,000	666,807,000	633,108,000
Deferred Finance Costs, Noncurrent, Net		$ 6,600,000	$ 6,448,000	8,193,000	6,892,000
Maximum leverage ratio, required		3.50
Minimum interest coverage ratio, required		3.00
Actual leverage ratio			1.80
Actual interest coverage ratio			24.8
Debt Instrument, Interest Rate, Effective Percentage | Rate			1.93%
Credit Agreement 1.25B [Member] | Revolving credit facility [Member]
Debt Instrument [Line Items]
Secured credit			$ 130,000,000	$ 175,000,000	$ 140,000,000
Revolving credit facility		$ 750,000,000
Borrowings under term loan	200,000,000
Letters of Credit Outstanding, Amount			8,600,000
Line of Credit Facility, Remaining Borrowing Capacity			$ 615,100,000
Credit Agreement 1.25B [Member] | Long-term Debt [Member]
Debt Instrument [Line Items]
Secured credit		500,000,000
Borrowings under term loan	$ 300,000,000	$ 200,000,000
Credit Agreement 1.25B [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage		1.25%
Debt Instrument, Interest Rate, Effective Percentage		0.25%
Line of Credit Facility, Commitment Fee Percentage		0.20%
Credit Agreement 1.25B [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage		2.25%
Debt Instrument, Interest Rate, Effective Percentage		1.25%
Line of Credit Facility, Commitment Fee Percentage		0.40%
First Tier Subsidiaries [Member] | Credit Agreement 1.25B [Member]
Debt Instrument [Line Items]
Secured rate		65.00%
HSNi Subsidiaries [Member] | Credit Agreement 1.25B [Member]
Debt Instrument [Line Items]
Secured rate		100.00%

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Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 20, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative, notional amount				$ 187,500
Derivative, fixed interest rate	2.3525%			0.8525%
Change in fair value of derivative instrument, net of tax	$ (249)	$ (499)
Interest Rate Derivative Liabilities, at Fair Value	552	$ 596	$ 169
Estimated unrealized loss to be realized in the next twelve months	$ 500

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Fair Value Measurements (Fair Value Of Other Financial Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Derivative Liabilities, at Fair Value	$ 552	$ 169	$ 596
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Derivative Liabilities, at Fair Value	0	0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Derivative Liabilities, at Fair Value	552	169	596
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest Rate Derivative Liabilities, at Fair Value	$ 0	$ 0	$ 0

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Fair Value Measurements (Fair Value Of Assets And Liabilities) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Term Loan [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, carrying value	$ 493,750	$ 500,000	$ 500,000
Term loan, fair value	493,750	500,000	500,000
Term Loan [Member] | Level 1 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, fair value	0	0	0
Term Loan [Member] | Level 2 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, fair value	493,750	500,000	500,000
Term Loan [Member] | Level 3 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, fair value	0	0	0
Revolving Credit Facility [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, carrying value	130,000	140,000	175,000
Term loan, fair value	130,000	140,000	175,000
Revolving Credit Facility [Member] | Level 1 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, fair value	0	0	0
Revolving Credit Facility [Member] | Level 2 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, fair value	130,000	140,000	175,000
Revolving Credit Facility [Member] | Level 3 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Term loan, fair value	$ 0	$ 0	$ 0

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit)	$ 17,097	$ 20,023
Effective Income Tax Rate, Continuing Operations	37.40%	37.30%

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Stock-Based Awards (Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense before income taxes	$ 5,376	$ 4,657
Income tax benefit	(1,876)	(1,651)
Stock-based compensation expense after income taxes	3,500	3,006
Selling and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated Share-based compensation expense	1,808	1,554
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated Share-based compensation expense	$ 3,568	$ 3,103

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Stock-Based Awards (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Jan. 27, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 36.3
Weighted average period of recognition of unrecognized compensation cost, years	2 years 2 months
New awards authorized	8,800,000	8,000,000
Available for grants	1,500,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	200.00%
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards Granted	92,000

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Stock-Based Awards Stock-Based Awards (Summary of Stock-Based Awards Granted) (Details)	3 Months Ended
	Mar. 31, 2016 $ / shares Rate shares
Stock appreciation rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards Granted	928,990
Weighted Average per Share Fair Value | $ / shares	$ 7.31
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards Granted	225,271
Weighted Average per Share Fair Value | $ / shares	$ 44.89
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards Granted	92,000
Weighted Average per Share Fair Value | $ / shares	$ 54.06
Employee stock purchase plan options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards Granted	29,965
Weighted Average per Share Fair Value | $ / shares	$ 12.18
Dividend equivalents due to quarterly dividend
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Awards Granted	5,724
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | Rate	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | Rate	200.00%

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Stock-Based Awards (Weighted Average Assumptions Used In Black-Scholes Option Pricing Model) (Details)	3 Months Ended
	Mar. 31, 2016 Rate
Stock Appreciation Rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility factor	26.30%
Risk-free interest rate	1.23%
Expected term	4 years 6 months
Dividend yield	3.10%
Employee stock purchase plan options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility factor	34.40%
Risk-free interest rate	0.49%
Expected term	6 months
Dividend yield	2.80%
Performance share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility factor	25.20%
Risk-free interest rate	0.89%
Expected term	2 years 11 months
Dividend yield	0.00%

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Shareholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended	12 Months Ended
	Mar. 09, 2016	Mar. 31, 2016	Dec. 31, 2015	Jan. 27, 2015
Share Repurchase Program [Line Items]
Share repurchased and retired		181
Value of shares repurchased and retired		$ 8,700
Outstanding common stock acquired, average price		$ 48.04
Dividends, Common Stock, Cash	$ 18,300	$ 18,300	$ 597,864
Common Stock, Dividends, Per Share, Cash Paid	$ 0.35
4 Million Share Program Approved 1/27/2015 [Member]
Share Repurchase Program [Line Items]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased				4,000
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased		2,900

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Shareholders' Equity Shareholders' Equity (Schedule of Accumulated Other Comprehensive Income(Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss) [Abstract]
Accumulated other comprehensive income (loss) as of January 1,			$ (95)	$ 127
Other comprehensive loss before reclassifications	$ (603)	$ (1,124)
Amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the consolidated statements of operations	200	320
Income tax benefit	154	305
Other comprehensive loss, net of tax	(249)	(499)
Accumulated other comprehensive loss	$ (344)	$ (372)	$ (95)

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Shareholders' Equity Dividend Policy (Details) - $ / shares	Jun. 15, 2016	Mar. 09, 2016
Dividends Payable [Line Items]
Common Stock, Dividends, Per Share, Cash Paid		$ 0.35
Subsequent Event [Member]
Dividends Payable [Line Items]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.35

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Commitments And Contingencies (Narrative) (Details)	Mar. 31, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Contingency reserve	$ 0

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Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Narrative) (Details) - HSN [Member] $ in Millions	Jun. 01, 2015	Mar. 31, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Number of Positions Eliminated	350
Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost		$ 4
Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost		5
Employee Severance [Member] | Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost		3
Employee Severance [Member] | Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost		$ 4

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Costs Associated with an Exit Activity Costs Associated with an Exit Activity (Schedule of Restructuring Reserve by Type) (Details) - HSN [Member] - Employee Severance [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	$ 3,221	$ 3,221
Provisions	0
Payments	0
Adjustments	$ 0