Annual report pursuant to Section 13 and 15(d)

Acquisition (Note)

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Acquisition (Note)
 12 Months Ended
Dec. 31, 2014
Business Combinations [Abstract]  
Acquisition
ACQUISITION
In April 2012, HSNi, through Cornerstone, acquired substantially all of the assets and liabilities of Chasing Fireflies, LLC, a leading direct-to-consumer premium children's and family lifestyle brand. The purchase price was $22.9 million in cash and contingent consideration valued at $6.5 million as of the acquisition date. The fair value of the contingent consideration was estimated by applying a probability-weighted income approach. The acquisition was accounted for as a business combination and the total purchase consideration was assigned to the assets acquired, primarily inventory and other assets totaling $8.6 million and liabilities assumed totaling $2.6 million, at their estimated fair value as of the acquisition date. The allocation of the identifiable intangible assets and goodwill included $13.5 million primarily for trade names and customer relationships and $9.9 million for goodwill. Proforma information was not presented for this acquisition as it was not material to HSNi's consolidated results of operations or financial position.

Chasing Fireflies did not achieve the performance targets to earn the outstanding contingent consideration for the years ended December 31, 2014 and December 31, 2013; therefore, HSNi reduced the fair value of the contingent consideration by $1.0 million and $3.6 million, respectively, which was included in "General and administrative expense" in the accompanying consolidated statements of operations.

While performing its annual impairment testing in the fourth quarter of fiscal 2013 for HSNi's goodwill and indefinite-lived intangible assets, HSNi determined the fair value of the indefinite-lived intangible assets from the Chasing Fireflies acquisition was lower than its carrying value; therefore, an impairment charge of $3.0 million was recorded during the fourth quarter of fiscal 2013 and was included in "General and administrative expense" in the accompanying consolidated statements of operations. See Note 3 for a further discussion on goodwill and indefinite-lived intangible assets.