Project Venus Key Next Steps Arthur C. Martinez James Follo Thomas McInerney Special Committee Internal Organization Initial information requests, diligence and file sharing Development of long term financial model Organization of materials for “internal” virtual data room Mindy Grossman, CEO Rod Little, Chief Financial Officer Greg Henchel, Chief Legal Officer Michael Attinella, CFO, HSN Segment Harold Herman, VP, Senior Counsel Bill Hunter, SVP, Corporate Controller Erick Cortes, VP, FP&A HSNi Management Internal Evaluation Assessment of standalone plan – – – – – Standalone strategic positioning and industry trends Base plan and alternative cases Key initiatives, opportunities for upside and risk assessment Value of standalone margin improvement potential Value creation for shareholders Centerview Partners Blair Effron, Partner Jack Levy, Partner Todd Davison, Partner Jim Christian, Managing Dir. Nolan Scaperotti, Principal Armaan Pai, Analyst Georgia Forbes, Analyst Goldman Sachs Gregg Lemkau, Managing Dir. David Friedland, Managing Dir. Jennifer Davis, Managing Dir. Dan Shefter, Advisory Dir. Stefan Duffner, Vice President Anne van der Voorden, Assoc. Jack Smith, Analyst Vera Shi, Analyst Evaluation of alternatives – Identification and financial analysis of non-control transaction alternatives and feasibility assessment Evaluation of combination with Q – Strategic positioning of pro forma company – Valuation analysis and synergy potential George (“Gar”) Bason, Partner Marc Williams, Partner Evan Rosen, Associate Alexander Simmons, Law Clerk Davis Polk Process/External Interaction Timeline and next steps Public/shareholder relations strategy When/how we expect to engage with Q going forward Other Advisors Kekst E&Y/Deloitte 1 Mobilization of the Working Group Key Next Steps and Initial Topics to Discuss
Illustrative Near-Term Timeline Timeline subject to when/how we expect to engage with Q going forward Week of January 9th: – Internal organization and kick-off – Initial information sharing, including standalone plan – Continue development of long term financial model Week of January 16th: – Full-day advisor diligence session with management (January 19th in St. Petersburg) – Continued development of long term financial model and potential alternative cases – Identification and analysis of HSNi’s strategic alternatives, potential strategic partners, etc. Week of January 23rd: – Continued analysis and diligence of standalone plan and review of alternatives – Discuss next steps for evaluation and schedule alternative review session with Committee Tentative HSNi Earnings 2 Board Meeting Federal Holiday February SuMTuWThFSa 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 2 3 4 January SuMTuWThFSa 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3 4 Path to Board Meeting Key Events
Summary of Information Request List Historical Financials – – – Estimated 4Q results Quarterly P&L and cash flow (including detailed expenses, adjustments, allocations, fixed vs. variable costs, etc.) Key performance indicators (e.g., price and volume, ticket sizes, return rates, customer demographics, etc.) Business Trends – Detail on trends by product, category, channel, etc. Projected Financials – FY2017 budget/plan and supporting assumptions – Longer-term financial model and supporting assumptions (including balance sheet and cash flow items) Growth Drivers – Detail on capital/investment and advertising/marketing budgets – Potential additional areas of investment (e.g., new products/geographies, other initiatives) Industry Research – Company or industry reports done internally or by third parties, including consulting strategy presentations Financial Materials Reviewed with the Board (Last ~2 Years) – December Board presentation and other relevant presentations/memos – Annual budgets, performance vs. budget, forecast updates and revisions Capitalization and Other – Detail on equity/debt capitalization, leases, PP&E, etc. 3
