Document and Entity Information
Document and Entity Information Document | 9 Months Ended |
Sep. 30, 2015shares | |
Document Information [Abstract] | |
Entity Registrant Name | QVC INC |
Entity Central Index Key | 1,254,699 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 1 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2015 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Current Reporting Status submitted electronically | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 363 | $ 347 |
Restricted cash | 12 | 12 |
Accounts receivable, less allowance for doubtful accounts of $80 at September 30, 2015 and $91 at December 31, 2014 | 874 | 1,196 |
Inventories | 1,166 | 882 |
Deferred income taxes | 212 | 210 |
Prepaid expenses | 53 | 50 |
Total current assets | 2,680 | 2,697 |
Noncurrent assets: | ||
Property and equipment, net of accumulated depreciation of $919 at September 30, 2015 and $884 at December 31, 2014 | 997 | 1,026 |
Cable and satellite television distribution rights, net | 364 | 461 |
Goodwill | 5,051 | 5,091 |
Other intangible assets, net | 2,997 | 3,143 |
Other noncurrent assets | 58 | 58 |
Total assets | 12,147 | 12,476 |
Current liabilities: | ||
Current portion of debt and capital lease obligations | 9 | 9 |
Accounts payable-trade | 722 | 629 |
Accrued liabilities | 714 | 885 |
Total current liabilities | 1,445 | 1,523 |
Noncurrent liabilities: | ||
Long-term portion of debt and capital lease obligations | 4,534 | 4,620 |
Deferred compensation | 14 | 17 |
Deferred income taxes | 1,033 | 1,121 |
Other long-term liabilities | 183 | 149 |
Total liabilities | 7,209 | 7,430 |
QVC, Inc. stockholder's equity: | ||
Common stock, $0.01 par value, 1 authorized share | 0 | 0 |
Additional paid-in capital | 6,830 | 6,787 |
Accumulated deficit | (1,884) | (1,805) |
Accumulated other comprehensive loss | (116) | (39) |
Total QVC, Inc. stockholder's equity | 4,830 | 4,943 |
Noncontrolling interest | 108 | 103 |
Total equity | 4,938 | 5,046 |
Total liabilities and equity | $ 12,147 | $ 12,476 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts | $ 80 | $ 91 |
Accumulated depreciation | $ 919 | $ 884 |
Common stock par value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 1 | 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net revenue | $ 2,007 | $ 2,020 | $ 5,943 | $ 6,020 |
Cost of goods sold | 1,266 | 1,266 | 3,721 | 3,772 |
Gross profit | 741 | 754 | 2,222 | 2,248 |
Operating expenses: | ||||
Operating | 174 | 178 | 517 | 536 |
Selling, general and administrative, including stock-based compensation | 146 | 153 | 443 | 456 |
Depreciation | 33 | 34 | 101 | 100 |
Amortization | 108 | 113 | 341 | 336 |
Operating expenses | 461 | 478 | 1,402 | 1,428 |
Operating income | 280 | 276 | 820 | 820 |
Other (expense) income: | ||||
Equity in losses of investee | (3) | (2) | (7) | (5) |
Interest expense, net | (49) | (60) | (158) | (182) |
Foreign currency gain | 12 | 2 | 11 | 2 |
Loss on extinguishment of debt | 0 | (48) | (21) | (48) |
Nonoperating expense | (40) | (108) | (175) | (233) |
Income before income taxes | 240 | 168 | 645 | 587 |
Income tax expense | (86) | (65) | (243) | (222) |
Net income | 154 | 103 | 402 | 365 |
Less net income attributable to the noncontrolling interest | (8) | (8) | (25) | (27) |
Net income attributable to QVC, Inc. stockholder | $ 146 | $ 95 | $ 377 | $ 338 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income | $ 154 | $ 103 | $ 402 | $ 365 |
Foreign currency translation adjustments | 3 | (116) | (77) | (98) |
Total comprehensive income (loss) | 157 | (13) | 325 | 267 |
Comprehensive income attributable to noncontrolling interest | (11) | (1) | (25) | (23) |
Comprehensive income (loss) attributable to QVC, Inc. stockholder | $ 146 | $ (14) | $ 300 | $ 244 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Net income | $ 402 | $ 365 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in losses of investee | 7 | 5 |
Deferred income taxes | (78) | (147) |
Foreign currency gain | (11) | (2) |
Depreciation | 101 | 100 |
Amortization | 341 | 336 |
Noncash interest | 6 | 7 |
Loss on extinguishment of debt | 21 | 48 |
Stock-based compensation | 24 | 34 |
Change in other long-term liabilities | 17 | 58 |
Effects of changes in working capital items | (50) | 8 |
Net cash provided by operating activities | 780 | 812 |
Investing activities: | ||
Capital expenditures | (132) | (99) |
Expenditures for cable and satellite television distribution rights | (48) | (30) |
Decreases in restricted cash | 0 | (2) |
Changes in other noncurrent assets | (1) | (1) |
Other investing activities | 2 | 1 |
Net cash used in investing activities | (179) | (127) |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (1,565) | (2,396) |
Principal borrowings of debt from senior secured credit facility | 1,470 | 726 |
Proceeds from issuance of senior secured notes, net of original issue discount | 0 | 1,997 |
Payment of debt origination fees | (3) | (25) |
Payment of bond premium fees | (18) | (32) |
Dividends paid to Liberty | (444) | (764) |
Dividends paid to noncontrolling interest | (20) | (25) |
Other financing activities | (1) | (5) |
Net cash (used in) provided by financing activities | (581) | (524) |
Effect of foreign exchange rate changes on cash and cash equivalents | (4) | (32) |
Net increase in cash and cash equivalents | 16 | 129 |
Cash and cash equivalents, beginning of period | 347 | 457 |
Cash and cash equivalents, end of period | 363 | 586 |
Effects of changes in working capital items: | ||
Decrease in accounts receivable | 319 | 341 |
Increase in inventories | (298) | (168) |
Increase in prepaid expenses | (5) | (7) |
Increase in accounts payable-trade | 84 | 127 |
Decrease in accrued liabilities and other | (150) | (285) |
Effects of changes in working capital items | $ (50) | $ 8 |
Consolidated Statement of Equit
Consolidated Statement of Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Noncontrolling interest |
Balance, December 31, 2014 at Dec. 31, 2014 | $ 5,046 | $ 0 | $ 6,787 | $ (1,805) | $ (39) | $ 103 |
Balance beginning (in shares) at Dec. 31, 2014 | 1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 402 | 0 | 377 | 0 | 25 | |
Foreign currency translation adjustments | (77) | 0 | 0 | (77) | 0 | |
Dividends paid to Liberty and noncontrolling interest and other | (476) | 0 | (456) | 0 | (20) | |
Impact of tax liability allocation and indemnification agreement with Liberty | 13 | 13 | 0 | 0 | 0 | |
Minimum withholding taxes on net share settlements of stock-based compensation | (7) | (7) | 0 | 0 | 0 | |
Excess tax benefit resulting from stock-based compensation | 13 | 13 | 0 | 0 | 0 | |
Stock-based compensation | 24 | 24 | 0 | 0 | 0 | |
Balance, September 30, 2015 at Sep. 30, 2015 | $ 4,938 | $ 0 | $ 6,830 | $ (1,884) | $ (116) | $ 108 |
Balance ending (in shares) at Sep. 30, 2015 | 1 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation [Abstract] | |
Basis of presentation | Basis of Presentation QVC, Inc. (unless otherwise indicated or required by the context, the terms "we," "our," "us," the "Company" and "QVC" refer to QVC, Inc. and its consolidated subsidiaries) is a retailer of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised shopping programs, the Internet and mobile applications. In the United States, QVC's live programming is distributed via its nationally televised shopping program 24 hours per day, 364 days per year ("QVC-U.S."). Internationally, QVC's program services are based in Germany ("QVC-Germany"), Japan ("QVC-Japan"), the United Kingdom ("QVC-U.K.") and Italy ("QVC-Italy"). QVC-Germany distributes its program 24 hours per day with 17 hours of live programming, QVC-Japan distributes live programming 24 hours per day, and QVC-U.K. distributes its program 24 hours per day with 16 hours of live programming. Effective March 9, 2015, QVC-U.K. reduced its total live programming from 17 hours to 16 hours by distributing recorded programming during the 1 a.m. to 2 a.m. hour. QVC-Italy distributes programming live for 17 hours per day on satellite and digital terrestrial television and an additional seven hours per day of recorded programming on satellite and seven hours per day of general interest programming on digital terrestrial television. In June 2015, QVC expanded its global presence into France ("QVC-France"), launching its website on June 23, 2015 followed by the launch of television programming on August 1, 2015. On weekdays, QVC-France distributes programming live for eight hours per day, and an additional 14 hours per day of recorded programming and two hours per day of general interest programming. On weekends, QVC-France distributes programming live for 12 hours per day, and an additional 10 hours per day of recorded programming and two hours per day of general interest programming. The Company's Japanese operations are conducted through a joint venture with Mitsui & Co., LTD ("Mitsui") for a television and multimedia retailing service in Japan. QVC-Japan is owned 60% by the Company and 40% by Mitsui. The Company and Mitsui share in all profits and losses based on their respective ownership interests. During the nine months ended September 30, 2015 and 2014 , QVC-Japan paid dividends to Mitsui of $20 million and $25 million , respectively. The Company also has a joint venture with CNR Media Group, formerly known as China Broadcasting Corporation, a limited liability company owned by China National Radio (''CNR''). The Company owns a 49% interest in a CNR subsidiary, CNR Home Shopping Co., Ltd. (''CNRS''). CNRS operates a retail business in China through a shopping television channel with an associated website. Live programming is distributed for 17 hours per day and recorded programming for seven hours per day. This joint venture is accounted for as an equity method investment recorded as equity in losses of investee in the condensed consolidated statements of operations. We are an indirect wholly owned subsidiary of Liberty Interactive Corporation ("Liberty"), which owns interests in a broad range of digital commerce businesses. On October 3, 2014, we declared and paid a dividend in cash to Liberty in the amount of $1 billion with funds drawn from the Company's credit facility. Additionally, Liberty reattributed from the Interactive Group to the Ventures Group $970 million in cash and certain of its digital commerce companies, including Backcountry.com, Inc., Bodybuilding.com, LLC, CommerceHub, Provide Commerce, Inc., Evite, Inc. and LMC Right Start, Inc. As a result of these transactions, the Interactive Group is now referred to as the QVC Group, which tracks our Company, zulily (defined below) (as of October 1, 2015) and Liberty's 38% equity interest in HSN, Inc., one of our two closest televised shopping competitors, along with cash and certain liabilities. The Liberty Interactive tracking stock trading symbol "LINTA" was changed to "QVCA" and the "LINTB" trading symbol was changed to "QVCB," effective October 7, 2014. Effective June 4, 2015, the name of the “Liberty Interactive common stock” was changed to the “QVC Group common stock.” On October 1, 2015, Liberty acquired all of the outstanding shares of zulily, inc. ("zulily") (now known as zulily, llc). zulily is an online retailer offering customers a fun and entertaining shopping experience with a fresh selection of new product styles launched each day. zulily is attributed to the QVC Group and we believe that its business is complementary to our Company. The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany accounts and transactions were eliminated in consolidation. The accompanying (a) condensed consolidated balance sheet as of December 31, 2014 , which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in QVC's Annual Report on Form 10-K for the year ended December 31, 2014 . The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates include, but are not limited to, sales returns, uncollectible receivables, inventory obsolescence, depreciable lives of fixed assets, internally-developed software, valuation of acquired intangible assets and goodwill, income taxes and stock-based compensation. On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14 which defers the effective date of ASU No. 2014-09 to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for annual reporting periods beginning after December 15, 2016, which was the original effective date. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. On April 7, 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability. This ASU intends to simplify the presentation of debt issuance costs. This standard will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable International Financial Reporting Standards. Subsequent to the issuance of ASU 2015-03, the SEC staff made an announcement regarding the presentation of debt issuance costs associated with line-of-credit arrangements, which was codified by the FASB in ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . The amendments in these new accounting standards are effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2015 and interim periods within those years. Early adoption is permitted for financial statements that have not been previously issued and retrospective application is required for each balance sheet presented. We plan to adopt this new guidance in the fourth quarter of 2015. The Company has determined there is no significant effect of the standards on its ongoing financial reporting. In April 2015, the FASB issued ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement , which provides explicit guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The new guidance clarifies that if a cloud computing arrangement includes a software license, the customer should account for the license consistent with its accounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. This new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2015. The Company has determined there is no significant effect of the standard on its ongoing financial reporting. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory , that changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. The new principle is part of the FASB’s simplification initiative and applies to entities that measure inventory using a method other than last-in, first-out (LIFO) or the retail inventory method. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016. The Company has determined there is no significant effect of the standard on its ongoing financial reporting. In September 2015, the FASB issued ASU 2015-16 , Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2015. The Company has determined there is no significant effect of the standard on its ongoing financial reporting. Certain prior period amounts have been reclassified to conform with the current period presentation. |
Cable and Satellite Television
Cable and Satellite Television Distribution Rights, Net | 9 Months Ended |
Sep. 30, 2015 | |
Cable and Satellite Television Distribution Rights [Abstract] | |
Cable and Satellite Television Distribution Rights, Net | Cable and Satellite Television Distribution Rights, Net Cable and satellite television distribution rights consisted of the following: (in millions) September 30, 2015 December 31, 2014 Cable and satellite television distribution rights $ 2,258 2,308 Less accumulated amortization (1,894 ) (1,847 ) Cable and satellite television distribution rights, net $ 364 461 The Company recorded amortization expense of $45 million and $46 million for the three months ended September 30, 2015 and 2014 , respectively, related to cable and satellite television distribution rights. For the nine months ended September 30, 2015 and 2014 , amortization expense for cable and satellite television distribution rights was $140 million and $139 million , respectively. As of September 30, 2015 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2015 $ 43 2016 171 2017 118 2018 12 2019 9 The decrease in future amortization expense in 2018 is primarily due to the end of affiliation agreement terms for contracts in place at the time of Liberty's acquisition of QVC in 2003. |
Goodwill (Notes)
Goodwill (Notes) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill disclosure | Goodwill The changes in the carrying amount of goodwill for the nine months ended September 30, 2015 were as follows: (in millions) QVC-U.S. QVC-Germany QVC-Japan QVC-U.K. QVC-Italy Total Balance as of December 31, 2014 $ 4,190 308 253 203 137 5,091 Exchange rate fluctuations — (24 ) (1 ) (4 ) (11 ) (40 ) Balance as of September 30, 2015 $ 4,190 284 252 199 126 5,051 |
Other Intangible Assets, Net
Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2015 | |
Other Intangible Assets [Abstract] | |
Intangible assets disclosure | Other Intangible Assets, Net Other intangible assets consisted of the following: September 30, 2015 December 31, 2014 (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 594 (404 ) 190 568 (369 ) 199 Affiliate and customer relationships 2,414 (2,076 ) 338 2,428 (1,958 ) 470 Debt origination fees 53 (12 ) 41 60 (14 ) 46 Trademarks (indefinite life) 2,428 — 2,428 2,428 — 2,428 $ 5,489 (2,492 ) 2,997 5,484 (2,341 ) 3,143 The Company recorded amortization expense of $63 million and $67 million for the three months ended September 30, 2015 and 2014 , respectively, related to other intangible assets. For the nine months ended September 30, 2015 and 2014 , amortization expense for other intangible assets was $201 million and $197 million , respectively. As of September 30, 2015 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2015 $ 69 2016 267 2017 175 2018 31 2019 9 The decrease in future amortization expense in 2018 is primarily due to the end of the useful lives of the affiliate and customer relationships in place at the time of Liberty's acquisition of QVC in 2003. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Liabilities [Abstract] | |
Accrued liabilities | Accrued Liabilities Accrued liabilities consisted of the following: (in millions) September 30, 2015 December 31, 2014 Accounts payable non-trade $ 185 200 Accrued compensation and benefits 115 110 Deferred revenue 90 85 Allowance for sales returns 84 109 Income taxes 72 137 Sales and other taxes 49 83 Accrued interest 47 79 Other 72 82 $ 714 885 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt disclosure | Long-Term Debt Long-term debt consisted of the following: (in millions) September 30, 2015 December 31, 2014 3.125% Senior Secured Notes due 2019, net of original issue discount $ 399 399 7.375% Senior Secured Notes due 2020 — 500 5.125% Senior Secured Notes due 2022 500 500 4.375% Senior Secured Notes due 2023, net of original issue discount 750 750 4.85% Senior Secured Notes due 2024, net of original issue discount 600 600 4.45% Senior Secured Notes due 2025, net of original issue discount 599 599 5.45% Senior Secured Notes due 2034, net of original issue discount 399 399 5.95% Senior Secured Notes due 2043, net of original issue discount 300 300 Senior secured credit facility 920 508 Capital lease obligations 76 74 Total debt 4,543 4,629 Less current portion (9 ) (9 ) Long-term portion of debt and capital lease obligations $ 4,534 4,620 Senior Secured Notes All of QVC's senior secured notes are secured by the capital stock of QVC and certain of its subsidiaries and have equal priority to the senior secured credit facility. The interest on all of QVC's senior secured notes is payable semi-annually. On April 15, 2015, QVC completed the redemption of $500 million principal amount of its 7.375% Senior Secured Notes due 2020, whereby holders received consideration of $1,036.88 for each $1,000 of principal tendered. As a result of the redemption, the Company recorded an extinguishment loss in the condensed consolidated statements of operations of $21 million for the nine months ended September 30, 2015 . Senior Secured Credit Facility On March 9, 2015, QVC amended and restated its senior secured credit facility (the "Second Amended and Restated Credit Agreement"), which is a multi-currency facility that provides for a $2.25 billion revolving credit facility with a $250 million sub-limit for standby letters of credit and $1.5 billion of uncommitted incremental revolving loan commitments or incremental term loans. QVC may elect that the loans extended under the senior secured credit facility bear interest at a rate per annum equal to the ABR or LIBOR, as each is defined in the senior secured credit facility agreement, plus a margin of 0.25% to 1.75% depending on various factors. Each loan may be prepaid in whole or in part without penalty at any time other than customary breakage costs. Any amounts prepaid on the revolving credit facility may be reborrowed. Payment of loans may be accelerated following certain customary events of default. The senior secured credit facility is secured by the capital stock of QVC. The purpose of the amendment was to, among other things, extend the maturity of our senior secured credit facility to March 9, 2020 and lower the interest rate on borrowings. QVC had $1.3 billion available under the terms of the senior secured credit facility at September 30, 2015 (see Note 13). The interest rate on the senior secured credit facility was 1.7% at September 30, 2015 . The Second Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on the Company and each of its restricted subsidiaries (subject to certain exceptions) with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting the Company’s consolidated leverage ratio, which is defined in QVC’s senior secured credit facility as the ratio of consolidated total debt to consolidated Adjusted OIBDA for the most recent four fiscal quarter period. The Company defines Adjusted OIBDA as revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). Other Debt Related Information QVC was in compliance with all of its debt covenants at September 30, 2015 . During the quarter, there were no significant changes to QVC's debt credit ratings. The weighted average rate applicable to all of the outstanding debt (excluding capital leases) was 4.1% as of September 30, 2015 . |
Leases and Transponder Service
Leases and Transponder Service Agreements | 9 Months Ended |
Sep. 30, 2015 | |
Leases and Transponder Service Agreements [Abstract] | |
Leases of lessee disclosure | Leases and Transponder Service Arrangements Future minimum payments under noncancelable operating leases and capital transponder leases with initial terms of one year or more and the lease related to our West Coast Distribution Center at September 30, 2015 consisted of the following: (in millions) Capital transponders Operating leases Build to suit lease Remainder of 2015 $ 3 5 — 2016 11 20 — 2017 12 18 5 2018 14 16 6 2019 13 13 6 Thereafter 29 96 79 Total $ 82 168 96 The Company has entered into twelve separate capital lease agreements with transponder suppliers to transmit its signals in the U.S., Germany and France at an aggregate monthly cost of $1 million . Depreciation expense related to the transponders was $3 million for both the three months ended September 30, 2015 and 2014 . For the nine months ended September 30, 2015 and 2014 , depreciation expense related to the transponders was $10 million and $9 million , respectively. Total future minimum capital lease payments of $82 million include $6 million of imputed interest. The transponder service agreements for our U.S. transponders expire between 2019 and 2023. The transponder service agreements for our international transponders expire between 2019 and 2024. Expenses for operating leases, principally for data processing equipment, facilities, satellite uplink service agreements and the West Coast Distribution Center land, amounted to $7 million and $6 million for the three months ended September 30, 2015 and 2014 , respectively. For the nine months ended September 30, 2015 and 2014 , expenses for operating leases were $19 million and $20 million , respectively. On July 2, 2015, QVC entered into a lease (the “Lease”) for a new distribution center. Pursuant to the Lease, the landlord is building an approximately one million square foot rental building in Ontario, California (the “Premises”), and thereafter will lease the Premises to QVC as its new west coast distribution center for an initial term of 15 years . Under the Lease, QVC is required to pay an initial base rent of approximately $6 million a year, increasing to approximately $8 million a year by the final year of the initial term, as well as all real estate taxes and other building operating costs. QVC also has an option to extend the term of the Lease for up to two consecutive terms of 10 years each. QVC has the right to obtain the Premises and related land from the landlord by entering into an amended and restated lease at any time during the twenty-fifth or twenty-sixth months of the Lease's initial term with a $10 million initial payment and annual payments of $12 million over a term of 13 years . We have concluded that we are the deemed owner (for accounting purposes only) of the Premises during the construction period under build to suit lease accounting. Building construction began in July of 2015. During the construction period, we are recording estimated project construction costs incurred by the landlord as a construction-in-progress asset and a corresponding long-term liability in “Property and equipment, net” and “Other long-term liabilities,” respectively, on our consolidated balance sheet. In addition, the Company will pay for normal tenant improvements and certain structural improvements and will record these amounts as part of the construction-in-progress asset. As of September 30, 2015 the construction-in-progress asset related to the West Coast Distribution Center was $14 million . Once the landlord completes the construction of the Premises (estimated to be mid 2016), we will evaluate the Lease in order to determine whether the Lease meets the criteria for “sale-leaseback” treatment under U.S. GAAP. If the Lease meets the “sale-leaseback” criteria, we will remove the asset and the related liability from our consolidated balance sheet and treat the Lease as either an operating or capital lease based on the our assessment of the accounting guidance. However, we currently expect that upon completion of construction of the Premises that the Lease will not meet the "sale-leaseback" criteria. If the Lease does not meet “sale-leaseback” criteria, we will treat the Lease as a financing obligation and lease payments will be attributed to: (1) a reduction of the principal financing obligation; (2) imputed interest expense; and (3) land lease expense representing an imputed cost to lease the underlying land of the Premises. In addition, the building asset will be depreciated over its estimated useful life. Although we will not begin making monthly lease payments pursuant to the Lease until February 2017, the portion of the lease obligations allocated to the land are being treated for accounting purposes as an operating lease that commenced in 2015. If the Company does not exercise its right to obtain the Premises and related land, the Company will derecognize both the net book values of the asset and the financing obligation at the conclusion of the lease term. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income Taxes The Company calculates its interim income tax provision by applying its best estimate of the annual expected effective tax rate to its ordinary year-to-date income or loss. The tax or benefit related to significant, unusual or extraordinary 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. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on the prior quarters is included in the tax expense for the current quarter. For the three months ended September 30, 2015 , the Company recorded a tax provision of $86 million , which represented an effective tax rate of 35.8% . For the nine months ended September 30, 2015 , the Company recorded a tax provision of $243 million , which represented an effective tax rate of 37.7% . These rates differ from the U.S. federal income tax rate of 35.0% due primarily to state tax expense. QVC is party to ongoing discussions with the Internal Revenue Service under the Compliance Assurance Process audit program. The Company files Federal tax returns on a consolidated basis with its parent company, Liberty. The Company, or one of its subsidiaries, files income tax returns in various states and foreign jurisdictions. As of September 30, 2015 , the Company, or one of its subsidiaries, was under examination in California, New York State, New York City, and Pennsylvania as well as in Germany, the U.K. and Italy. The amounts of the tax-related balances due to Liberty at September 30, 2015 and December 31, 2014 were $15 million and $55 million , respectively, and were included in accrued liabilities in the accompanying condensed consolidated balance sheets. The Company is a party to a Tax Liability Allocation and Indemnification Agreement (the “Tax Agreement”) with Liberty. The Tax Agreement establishes the methodology for the calculation and payment of income taxes in connection with the consolidation of the Company with Liberty for income tax purposes. Generally, the Tax Agreement provides that the Company will pay Liberty an amount equal to the tax liability, if any, that it would have if it were to file as a consolidated group separate and apart from Liberty, with exceptions for the treatment and timing of certain items, including but not limited to deferred intercompany transactions, credits, and net operating and capital losses. To the extent that the separate company tax expense is different from the payment terms of the Tax Agreement, the difference is recorded as either a dividend or capital contribution. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company has contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that the amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements. Network and information systems, including the Internet and telecommunication systems, third party delivery services and other technologies are critical to our business activities. Substantially all our customer orders, fulfillment and delivery services are dependent upon the use of network and information systems, including the use of third party telecommunication and delivery service providers. If information systems including the Internet or telecommunication services are disrupted, or if the third party delivery services experience a disruption in their transportation delivery services, we could face a significant disruption in fulfilling our customer orders and shipment of our products. We have active disaster recovery programs in place to help mitigate risks associated with these critical business activities. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value disclosures | Assets and Liabilities Measured at Fair Value For assets and liabilities required to be reported or disclosed at fair value, U.S. GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs, other than quoted market prices included within Level 1, are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company's assets and liabilities measured or disclosed at fair value were as follows: Fair value measurements at September 30, 2015 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 235 235 — — Long-term liabilities: Debt (note 6) 4,397 — 4,397 — Fair value measurements at December 31, 2014 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 245 245 — — Long-term liabilities: Debt (note 6) 4,626 — 4,626 — The majority of the Company's Level 2 financial liabilities are debt instruments with quoted market prices that are not considered to be traded on "active markets," as defined in U.S. GAAP. Accordingly, the financial instruments are reported in the foregoing tables as Level 2 fair value instruments. |
Information about QVC's Operati
Information about QVC's Operating Segments | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment reporting disclosure | Information about QVC's Operating Segments Each of the Company's operating segments are retailers of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised-shopping programs as well as via the Internet and mobile applications in certain markets. The Company has identified six reportable operating segments: the United States, Germany, Japan, the United Kingdom, Italy and France. The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as net revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per subscriber equivalent. The Company defines Adjusted OIBDA as revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). The Company believes this measure is an important indicator of the operational strength and performance of its segments, including the ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking among our businesses and identify strategies to improve performance. This measure of performance excludes depreciation, amortization and stock-based compensation, that are included in the measurement of operating income pursuant to U.S. GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. GAAP. Performance measures Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (in millions) Net Adjusted Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 1,420 333 1,368 329 4,168 988 4,025 955 QVC-Germany 199 36 229 42 602 110 706 121 QVC-Japan 192 35 216 41 590 111 673 131 QVC-U.K. 168 33 173 31 497 96 516 91 QVC-Italy 28 — 34 (1 ) 86 (3 ) 100 (5 ) QVC-France — (7 ) — (3 ) — (16 ) — (3 ) Consolidated QVC $ 2,007 430 2,020 439 5,943 1,286 6,020 1,290 Net revenue amounts by product category are not available from our general purpose financial statements. Other information Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 15 97 14 98 47 303 41 290 QVC-Germany 7 7 8 9 20 23 24 28 QVC-Japan 5 2 5 3 15 6 14 7 QVC-U.K. 3 2 5 3 11 8 13 10 QVC-Italy 2 — 2 — 7 1 8 1 QVC-France 1 — — — 1 — — — Consolidated QVC $ 33 108 34 113 101 341 100 336 September 30, 2015 December 31, 2014 (in millions) Total Capital Total Capital QVC-U.S. $ 9,925 98 10,133 141 QVC-Germany 851 7 915 10 QVC-Japan 619 2 644 2 QVC-U.K. 500 10 537 16 QVC-Italy 224 2 245 13 QVC-France 28 13 2 1 Consolidated QVC $ 12,147 132 12,476 183 Long-lived assets, net of accumulated depreciation, by geographic area were as follows: (in millions) September 30, 2015 December 31, 2014 QVC-U.S. $ 479 463 QVC-Germany 180 209 QVC-Japan 161 176 QVC-U.K. 107 120 QVC-Italy 48 57 QVC-France 22 1 Consolidated QVC $ 997 1,026 The following table provides a reconciliation of Adjusted OIBDA to income before income taxes: Three months ended September 30, Nine months ended September 30, (in millions) 2015 2014 2015 2014 Adjusted OIBDA $ 430 439 1,286 1,290 Stock-based compensation (9 ) (16 ) (24 ) (34 ) Depreciation and amortization (141 ) (147 ) (442 ) (436 ) Equity in losses of investee (3 ) (2 ) (7 ) (5 ) Interest expense, net (49 ) (60 ) (158 ) (182 ) Foreign currency gain 12 2 11 2 Loss on extinguishment of debt — (48 ) (21 ) (48 ) Income before income taxes $ 240 168 645 587 |
Other Comprehensive Income
Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2015 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Comprehensive Income (Loss) | Other Comprehensive (Loss) Income The change in the component of accumulated other comprehensive (loss) income, net of taxes ("AOCI"), is summarized as follows: (in millions) Foreign currency translation adjustments AOCI Balance at January 1, 2015 $ (39 ) (39 ) Other comprehensive loss attributable to QVC, Inc. stockholder (77 ) (77 ) Balance at September 30, 2015 (116 ) (116 ) Balance at January 1, 2014 $ 139 139 Other comprehensive loss attributable to QVC, Inc. stockholder (94 ) (94 ) Balance at September 30, 2014 45 45 The component of other comprehensive income is reflected in QVC's condensed consolidated statements of comprehensive income, net of taxes. The following table summarizes the tax effects related to the component of other comprehensive income: (in millions) Before-tax amount Tax benefit Net-of-tax amount Three months ended September 30, 2015: Foreign currency translation adjustments $ (9 ) 12 3 Other comprehensive (loss) income (9 ) 12 3 Three months ended September 30, 2014: Foreign currency translation adjustments $ (145 ) 29 (116 ) Other comprehensive loss (145 ) 29 (116 ) Nine months ended September 30, 2015: Foreign currency translation adjustments $ (89 ) 12 (77 ) Other comprehensive loss (89 ) 12 (77 ) Nine months ended September 30, 2014: Foreign currency translation adjustments $ (124 ) 26 (98 ) Other comprehensive loss (124 ) 26 (98 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent to September 30, 2015 , QVC declared and paid a dividend to Liberty in the amount of $910 million to support Liberty’s purchase of zulily. We borrowed from our Senior Secured Credit Facility to fund this dividend. |
Guarantor_Non-Guarantor Subsidi
Guarantor/Non-Guarantor Subsidiary Financial Information | 9 Months Ended |
Sep. 30, 2015 | |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
Guarantor/Non-guarantor Subsidiary Financial Information | Guarantor/Non-guarantor Subsidiary Financial Information The following information contains the condensed consolidating financial statements for the Company, the parent on a stand-alone basis (QVC, Inc.), the combined subsidiary guarantors (Affiliate Relations Holdings, Inc.; Affiliate Investment, Inc.; AMI 2, Inc.; ER Marks, Inc.; QVC International Ltd; QVC Rocky Mount, Inc.; QVC San Antonio, LLC; Global Holdings I, Inc.; and Global Holdings II, Inc.) and the combined non-guarantor subsidiaries pursuant to Rule 3-10 of Regulation S-X. Certain non-guarantor subsidiaries are majority-owned by QVC International Ltd, which is a guarantor subsidiary. These condensed consolidating financial statements have been prepared from the Company's financial information on the same basis of accounting as the Company's condensed consolidated financial statements. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, such as management fees, royalty revenue and expense, interest income and expense and gains on intercompany asset transfers. In the fourth quarter of 2014 the Company revised the presentation of intercompany management expense (income) and prior period amounts have been reclassified to conform with the current period presentation. Goodwill and other intangible assets have been allocated to the subsidiaries based on management’s estimates. Certain costs have been partially allocated to all of the subsidiaries of the Company. During the nine months ended September 30, 2014, an intangible asset held by certain non-guarantor subsidiaries was sold to QVC, Inc. resulting in a gain of $20 million reflected in intercompany interest and other income for the non-guarantor subsidiaries and also included in equity in earnings of subsidiaries for the subsidiary guarantors. The gain is eliminated in the eliminations column. The impact of these earnings has been eliminated in the presentation of intangible assets and equity in earnings of subsidiaries of the parent company. The subsidiary guarantors are 100% owned by the Company. All guarantees are full and unconditional and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its U.S. subsidiaries, including the guarantors, by dividend or loan. The Company has not presented separate notes and other disclosures concerning the subsidiary guarantors as the Company has determined that such material information is available in the notes to the Company's condensed consolidated financial statements. Condensed Consolidating Balance Sheets September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 135 226 — 363 Restricted cash 9 — 3 — 12 Accounts receivable, net 660 — 214 — 874 Inventories 899 — 267 — 1,166 Deferred income taxes 175 26 11 — 212 Prepaid expenses 24 — 29 — 53 Total current assets 1,769 161 750 — 2,680 Property and equipment, net 277 67 653 — 997 Cable and satellite television distribution rights, net — 315 49 — 364 Goodwill 4,191 — 860 — 5,051 Other intangible assets, net 899 2,050 48 — 2,997 Other noncurrent assets 6 — 52 — 58 Investments in subsidiaries 3,662 2,679 — (6,341 ) — Total assets $ 10,804 5,272 2,412 (6,341 ) 12,147 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 6 — 9 Accounts payable-trade 493 — 229 — 722 Accrued liabilities 136 160 418 — 714 Intercompany accounts payable (receivable) 500 1,303 (1,803 ) — — Total current liabilities 1,132 1,463 (1,150 ) — 1,445 Long-term portion of debt and capital lease obligations 4,480 — 54 — 4,534 Deferred compensation 14 — — — 14 Deferred income taxes 237 780 16 — 1,033 Other long-term liabilities 111 — 72 — 183 Total liabilities 5,974 2,243 (1,008 ) — 7,209 Equity: QVC, Inc. stockholder's equity 4,830 3,029 3,312 (6,341 ) 4,830 Noncontrolling interest — — 108 — 108 Total equity 4,830 3,029 3,420 (6,341 ) 4,938 Total liabilities and equity $ 10,804 5,272 2,412 (6,341 ) 12,147 Condensed Consolidating Balance Sheets December 31, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 123 222 — 347 Restricted cash 10 — 2 — 12 Accounts receivable, net 909 — 287 — 1,196 Inventories 680 — 202 — 882 Deferred income taxes 192 — 18 — 210 Prepaid expenses 25 — 25 — 50 Total current assets 1,818 123 756 — 2,697 Property and equipment, net 273 68 685 — 1,026 Cable and satellite television distribution rights, net — 388 73 — 461 Goodwill 4,184 — 907 — 5,091 Other intangible assets, net 1,023 2,051 69 — 3,143 Other noncurrent assets 1 — 57 — 58 Investments in subsidiaries 4,681 1,386 — (6,067 ) — Total assets $ 11,980 4,016 2,547 (6,067 ) 12,476 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 2 — 7 — 9 Accounts payable-trade 420 — 209 — 629 Accrued liabilities 282 143 460 — 885 Intercompany accounts payable (receivable) 1,384 (921 ) (463 ) — — Total current liabilities 2,088 (778 ) 213 — 1,523 Long-term portion of debt and capital lease obligations 4,565 — 55 — 4,620 Deferred compensation 16 — 1 — 17 Deferred income taxes 269 877 (25 ) — 1,121 Other long-term liabilities 99 — 50 — 149 Total liabilities 7,037 99 294 — 7,430 Equity: QVC, Inc. stockholder's equity 4,943 3,917 2,150 (6,067 ) 4,943 Noncontrolling interest — — 103 — 103 Total equity 4,943 3,917 2,253 (6,067 ) 5,046 Total liabilities and equity $ 11,980 4,016 2,547 (6,067 ) 12,476 Condensed Consolidating Statements of Operations Three months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,458 223 641 (315 ) 2,007 Cost of goods sold 905 27 385 (51 ) 1,266 Gross profit 553 196 256 (264 ) 741 Operating expenses: Operating 95 63 88 (72 ) 174 Selling, general and administrative, including stock-based compensation 255 — 83 (192 ) 146 Depreciation 11 2 20 — 33 Amortization 56 40 12 — 108 417 105 203 (264 ) 461 Operating income 136 91 53 — 280 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Interest expense, net (50 ) — 1 — (49 ) Foreign currency gain 2 7 3 — 12 Intercompany interest (expense) income (1 ) (21 ) 22 — — (49 ) (14 ) 23 — (40 ) Income before income taxes 87 77 76 — 240 Income tax expense (23 ) (25 ) (38 ) — (86 ) Equity in earnings of subsidiaries, net of tax 90 37 — (127 ) — Net income 154 89 38 (127 ) 154 Less net income attributable to the noncontrolling interest (8 ) — (8 ) 8 (8 ) Net income attributable to QVC, Inc. stockholder $ 146 89 30 (119 ) 146 Condensed Consolidating Statements of Operations Three months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,404 210 745 (339 ) 2,020 Cost of goods sold 873 27 430 (64 ) 1,266 Gross profit 531 183 315 (275 ) 754 Operating expenses: Operating 115 61 95 (93 ) 178 Selling, general and administrative, including stock-based compensation 250 — 85 (182 ) 153 Depreciation 10 1 23 — 34 Amortization 56 39 18 — 113 431 101 221 (275 ) 478 Operating income 100 82 94 — 276 Other (expense) income: Equity in losses of investee — — (2 ) — (2 ) Interest expense, net (60 ) — — — (60 ) Foreign currency gain (loss) 6 (2 ) (2 ) — 2 Loss on extinguishment of debt (48 ) — — — (48 ) Intercompany interest (expense) income (6 ) 13 (7 ) — — (108 ) 11 (11 ) — (108 ) (Loss) income before income taxes (8 ) 93 83 — 168 Income tax expense (15 ) (29 ) (21 ) — (65 ) Equity in earnings of subsidiaries, net of tax 126 13 — (139 ) — Net income 103 77 62 (139 ) 103 Less net income attributable to the noncontrolling interest (8 ) — (8 ) 8 (8 ) Net income attributable to QVC, Inc. stockholder $ 95 77 54 (131 ) 95 Condensed Consolidating Statements of Operations Nine months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,282 645 1,938 (922 ) 5,943 Cost of goods sold 2,632 75 1,153 (139 ) 3,721 Gross profit 1,650 570 785 (783 ) 2,222 Operating expenses: Operating 294 181 266 (224 ) 517 Selling, general and administrative, including stock-based compensation 757 — 245 (559 ) 443 Depreciation 32 6 63 — 101 Amortization 175 121 45 — 341 1,258 308 619 (783 ) 1,402 Operating income 392 262 166 — 820 Other (expense) income: Equity in losses of investee — — (7 ) — (7 ) Interest expense, net (157 ) — (1 ) — (158 ) Foreign currency gain (loss) 7 (6 ) 10 — 11 Loss on extinguishment of debt (21 ) — — — (21 ) Intercompany interest (expense) income (7 ) (30 ) 37 — — (178 ) (36 ) 39 — (175 ) Income before income taxes 214 226 205 — 645 Income tax expense (63 ) (101 ) (79 ) — (243 ) Equity in earnings of subsidiaries, net of tax 251 145 — (396 ) — Net income 402 270 126 (396 ) 402 Less net income attributable to the noncontrolling interest (25 ) — (25 ) 25 (25 ) Net income attributable to QVC, Inc. stockholder $ 377 270 101 (371 ) 377 Condensed Consolidating Statements of Operations Nine months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,133 601 2,196 (910 ) 6,020 Cost of goods sold 2,565 75 1,308 (176 ) 3,772 Gross profit 1,568 526 888 (734 ) 2,248 Operating expenses: Operating 276 174 295 (209 ) 536 Selling, general and administrative, including stock-based compensation 713 — 268 (525 ) 456 Depreciation 29 4 67 — 100 Amortization 166 115 55 — 336 1,184 293 685 (734 ) 1,428 Operating income 384 233 203 — 820 Other (expense) income: Equity in losses of investee — — (5 ) — (5 ) Interest expense, net (173 ) — (9 ) — (182 ) Foreign currency gain (loss) 3 (2 ) 1 — 2 Loss on extinguishment of debt (48 ) — — — (48 ) Intercompany interest and other (expense) income (16 ) 39 (3 ) (20 ) — (234 ) 37 (16 ) (20 ) (233 ) Income before income taxes 150 270 187 (20 ) 587 Income tax expense (22 ) (81 ) (119 ) — (222 ) Equity in earnings (losses) of subsidiaries, net of tax 237 (6 ) — (231 ) — Net income 365 183 68 (251 ) 365 Less net income attributable to the noncontrolling interest (27 ) — (27 ) 27 (27 ) Net income attributable to QVC, Inc. stockholder $ 338 183 41 (224 ) 338 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 154 89 38 (127 ) 154 Foreign currency translation adjustments 3 — 3 (3 ) 3 Total comprehensive income 157 89 41 (130 ) 157 Comprehensive income attributable to noncontrolling interest (11 ) — (11 ) 11 (11 ) Comprehensive income attributable to QVC, Inc. stockholder $ 146 89 30 (119 ) 146 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 103 77 62 (139 ) 103 Foreign currency translation adjustments (116 ) — (116 ) 116 (116 ) Total comprehensive (loss) income (13 ) 77 (54 ) (23 ) (13 ) Comprehensive income attributable to noncontrolling interest (1 ) — (1 ) 1 (1 ) Comprehensive (loss) income attributable to QVC, Inc. stockholder $ (14 ) 77 (55 ) (22 ) (14 ) Condensed Consolidating Statements of Comprehensive Income Nine months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 402 270 126 (396 ) 402 Foreign currency translation adjustments (77 ) — (77 ) 77 (77 ) Total comprehensive income 325 270 49 (319 ) 325 Comprehensive income attributable to noncontrolling interest (25 ) — (25 ) 25 (25 ) Comprehensive income attributable to QVC, Inc. stockholder $ 300 270 24 (294 ) 300 Condensed Consolidating Statements of Comprehensive Income Nine months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 365 183 68 (251 ) 365 Foreign currency translation adjustments (98 ) — (98 ) 98 (98 ) Total comprehensive income (loss) 267 183 (30 ) (153 ) 267 Comprehensive income attributable to noncontrolling interest (23 ) — (23 ) 23 (23 ) Comprehensive income (loss) attributable to QVC, Inc. stockholder $ 244 183 (53 ) (130 ) 244 Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 351 152 277 — 780 Investing activities: Capital expenditures (90 ) (6 ) (36 ) — (132 ) Expenditures for cable and satellite television distribution rights, net — (45 ) (3 ) — (48 ) Decrease (increase) in restricted cash 1 — (1 ) — — Changes in other noncurrent assets — — (1 ) — (1 ) Other investing activities 2 — — — 2 Intercompany investing activities 339 382 — (721 ) — Net cash provided by (used in) investing activities 252 331 (41 ) (721 ) (179 ) Financing activities: Principal payments of debt and capital lease obligations (1,560 ) — (5 ) — (1,565 ) Principal borrowings of debt from senior secured credit facility 1,470 — — — 1,470 Payment of debt origination fees (3 ) — — — (3 ) Payment of bond premium fees (18 ) — — — (18 ) Other financing activities (1 ) — — — (1 ) Dividends paid to Liberty (444 ) — — — (444 ) Dividends paid to noncontrolling interest — — (20 ) — (20 ) Net short-term intercompany debt (repayments) borrowings (884 ) 2,224 (1,340 ) — — Other intercompany financing activities 837 (2,695 ) 1,137 721 — Net cash (used in) provided by financing activities (603 ) (471 ) (228 ) 721 (581 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (4 ) — (4 ) Net increase in cash and cash equivalents — 12 4 — 16 Cash and cash equivalents, beginning of period 2 123 222 — 347 Cash and cash equivalents, end of period $ 2 135 226 — 363 Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 311 273 228 — 812 Investing activities: Capital expenditures (103 ) (3 ) 27 (20 ) (99 ) Expenditures for cable and satellite television distribution rights, net — (30 ) — — (30 ) Decrease in restricted cash 1 — 1 — 2 Changes in other noncurrent assets (1 ) — — — (1 ) Other investing activities 1 — — — 1 Intercompany investing activities 258 78 — (336 ) — Net cash provided by (used in) investing activities 156 45 28 (356 ) (127 ) Financing activities: Principal payments of debt and capital lease obligations (2,388 ) — (8 ) — (2,396 ) Principal borrowings of debt from senior secured credit facility 726 — — — 726 Proceeds from issuance of senior secured notes, net of original issue discount 1,997 — — — 1,997 Payment of debt origination fees (25 ) — — — (25 ) Payment of bond premium fees (32 ) — — — (32 ) Other financing activities (5 ) — — — (5 ) Dividends paid to Liberty (764 ) — — — (764 ) Dividends paid to noncontrolling interest — — (25 ) — (25 ) Net short-term intercompany debt borrowings (repayments) 90 76 (166 ) — — Other intercompany financing activities (143 ) (302 ) 89 356 — Net cash used in financing activities (544 ) (226 ) (110 ) 356 (524 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (32 ) — (32 ) Net (decrease) increase in cash and cash equivalents (77 ) 92 114 — 129 Cash and cash equivalents, beginning of period 78 133 246 — 457 Cash and cash equivalents, end of period $ 1 225 360 — 586 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Basis of Presentation [Abstract] | |
New accounting pronouncements policy | On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a retrospective or cumulative effect transition method. In August 2015, the FASB issued ASU No. 2015-14 which defers the effective date of ASU No. 2014-09 to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early application is permitted for annual reporting periods beginning after December 15, 2016, which was the original effective date. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. On April 7, 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability. This ASU intends to simplify the presentation of debt issuance costs. This standard will more closely align the presentation of debt issuance costs under U.S. GAAP with the presentation under comparable International Financial Reporting Standards. Subsequent to the issuance of ASU 2015-03, the SEC staff made an announcement regarding the presentation of debt issuance costs associated with line-of-credit arrangements, which was codified by the FASB in ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . The amendments in these new accounting standards are effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2015 and interim periods within those years. Early adoption is permitted for financial statements that have not been previously issued and retrospective application is required for each balance sheet presented. We plan to adopt this new guidance in the fourth quarter of 2015. The Company has determined there is no significant effect of the standards on its ongoing financial reporting. In April 2015, the FASB issued ASU 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement , which provides explicit guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The new guidance clarifies that if a cloud computing arrangement includes a software license, the customer should account for the license consistent with its accounting for other software licenses. If the arrangement does not include a software license, the customer should account for the arrangement as a service contract. This new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2015. The Company has determined there is no significant effect of the standard on its ongoing financial reporting. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory , that changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. The new principle is part of the FASB’s simplification initiative and applies to entities that measure inventory using a method other than last-in, first-out (LIFO) or the retail inventory method. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2016. The Company has determined there is no significant effect of the standard on its ongoing financial reporting. In September 2015, the FASB issued ASU 2015-16 , Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2015. The Company has determined there is no significant effect of the standard on its ongoing financial reporting. |
Cable and Satellite Televisio23
Cable and Satellite Television Distribution Rights, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Cable and Satellite Television Distribution Rights [Abstract] | |
Schedule of cable and satellite television distribution rights | Cable and satellite television distribution rights consisted of the following: (in millions) September 30, 2015 December 31, 2014 Cable and satellite television distribution rights $ 2,258 2,308 Less accumulated amortization (1,894 ) (1,847 ) Cable and satellite television distribution rights, net $ 364 461 |
Schedule of future amortization expense | As of September 30, 2015 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2015 $ 43 2016 171 2017 118 2018 12 2019 9 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying amount of goodwill for the nine months ended September 30, 2015 were as follows: (in millions) QVC-U.S. QVC-Germany QVC-Japan QVC-U.K. QVC-Italy Total Balance as of December 31, 2014 $ 4,190 308 253 203 137 5,091 Exchange rate fluctuations — (24 ) (1 ) (4 ) (11 ) (40 ) Balance as of September 30, 2015 $ 4,190 284 252 199 126 5,051 |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Intangible Assets [Abstract] | |
Schedule of acquired intangible assets by class | Other intangible assets consisted of the following: September 30, 2015 December 31, 2014 (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 594 (404 ) 190 568 (369 ) 199 Affiliate and customer relationships 2,414 (2,076 ) 338 2,428 (1,958 ) 470 Debt origination fees 53 (12 ) 41 60 (14 ) 46 Trademarks (indefinite life) 2,428 — 2,428 2,428 — 2,428 $ 5,489 (2,492 ) 2,997 5,484 (2,341 ) 3,143 |
Schedule of finite-lived intangible assets future amortization expense | As of September 30, 2015 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2015 $ 69 2016 267 2017 175 2018 31 2019 9 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Liabilities [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following: (in millions) September 30, 2015 December 31, 2014 Accounts payable non-trade $ 185 200 Accrued compensation and benefits 115 110 Deferred revenue 90 85 Allowance for sales returns 84 109 Income taxes 72 137 Sales and other taxes 49 83 Accrued interest 47 79 Other 72 82 $ 714 885 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt consisted of the following: (in millions) September 30, 2015 December 31, 2014 3.125% Senior Secured Notes due 2019, net of original issue discount $ 399 399 7.375% Senior Secured Notes due 2020 — 500 5.125% Senior Secured Notes due 2022 500 500 4.375% Senior Secured Notes due 2023, net of original issue discount 750 750 4.85% Senior Secured Notes due 2024, net of original issue discount 600 600 4.45% Senior Secured Notes due 2025, net of original issue discount 599 599 5.45% Senior Secured Notes due 2034, net of original issue discount 399 399 5.95% Senior Secured Notes due 2043, net of original issue discount 300 300 Senior secured credit facility 920 508 Capital lease obligations 76 74 Total debt 4,543 4,629 Less current portion (9 ) (9 ) Long-term portion of debt and capital lease obligations $ 4,534 4,620 |
Leases and Transponder Servic28
Leases and Transponder Service Agreements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Leases and Transponder Service Agreements [Abstract] | |
Future minimum lease payments | Future minimum payments under noncancelable operating leases and capital transponder leases with initial terms of one year or more and the lease related to our West Coast Distribution Center at September 30, 2015 consisted of the following: (in millions) Capital transponders Operating leases Build to suit lease Remainder of 2015 $ 3 5 — 2016 11 20 — 2017 12 18 5 2018 14 16 6 2019 13 13 6 Thereafter 29 96 79 Total $ 82 168 96 |
Assets and Liabilities Measur29
Assets and Liabilities Measured at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | The Company's assets and liabilities measured or disclosed at fair value were as follows: Fair value measurements at September 30, 2015 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 235 235 — — Long-term liabilities: Debt (note 6) 4,397 — 4,397 — Fair value measurements at December 31, 2014 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 245 245 — — Long-term liabilities: Debt (note 6) 4,626 — 4,626 — |
Information about QVC's Opera30
Information about QVC's Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Adjusted OIBDA by Segment | Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (in millions) Net Adjusted Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 1,420 333 1,368 329 4,168 988 4,025 955 QVC-Germany 199 36 229 42 602 110 706 121 QVC-Japan 192 35 216 41 590 111 673 131 QVC-U.K. 168 33 173 31 497 96 516 91 QVC-Italy 28 — 34 (1 ) 86 (3 ) 100 (5 ) QVC-France — (7 ) — (3 ) — (16 ) — (3 ) Consolidated QVC $ 2,007 430 2,020 439 5,943 1,286 6,020 1,290 |
Schedule of Depreciation and Amortization by Segment | Three months ended September 30, Nine months ended September 30, 2015 2014 2015 2014 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 15 97 14 98 47 303 41 290 QVC-Germany 7 7 8 9 20 23 24 28 QVC-Japan 5 2 5 3 15 6 14 7 QVC-U.K. 3 2 5 3 11 8 13 10 QVC-Italy 2 — 2 — 7 1 8 1 QVC-France 1 — — — 1 — — — Consolidated QVC $ 33 108 34 113 101 341 100 336 |
Schedule of Capital Expenditures and Total Assets by Segment | September 30, 2015 December 31, 2014 (in millions) Total Capital Total Capital QVC-U.S. $ 9,925 98 10,133 141 QVC-Germany 851 7 915 10 QVC-Japan 619 2 644 2 QVC-U.K. 500 10 537 16 QVC-Italy 224 2 245 13 QVC-France 28 13 2 1 Consolidated QVC $ 12,147 132 12,476 183 |
Long-Lived Assets by Segment | Long-lived assets, net of accumulated depreciation, by geographic area were as follows: (in millions) September 30, 2015 December 31, 2014 QVC-U.S. $ 479 463 QVC-Germany 180 209 QVC-Japan 161 176 QVC-U.K. 107 120 QVC-Italy 48 57 QVC-France 22 1 Consolidated QVC $ 997 1,026 |
Reconciliation of Adjusted OIBDA to Income before Income Taxes | The following table provides a reconciliation of Adjusted OIBDA to income before income taxes: Three months ended September 30, Nine months ended September 30, (in millions) 2015 2014 2015 2014 Adjusted OIBDA $ 430 439 1,286 1,290 Stock-based compensation (9 ) (16 ) (24 ) (34 ) Depreciation and amortization (141 ) (147 ) (442 ) (436 ) Equity in losses of investee (3 ) (2 ) (7 ) (5 ) Interest expense, net (49 ) (60 ) (158 ) (182 ) Foreign currency gain 12 2 11 2 Loss on extinguishment of debt — (48 ) (21 ) (48 ) Income before income taxes $ 240 168 645 587 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The change in the component of accumulated other comprehensive (loss) income, net of taxes ("AOCI"), is summarized as follows: (in millions) Foreign currency translation adjustments AOCI Balance at January 1, 2015 $ (39 ) (39 ) Other comprehensive loss attributable to QVC, Inc. stockholder (77 ) (77 ) Balance at September 30, 2015 (116 ) (116 ) Balance at January 1, 2014 $ 139 139 Other comprehensive loss attributable to QVC, Inc. stockholder (94 ) (94 ) Balance at September 30, 2014 45 45 |
Schedule of Component of Comprehensive Income (Loss) | The following table summarizes the tax effects related to the component of other comprehensive income: (in millions) Before-tax amount Tax benefit Net-of-tax amount Three months ended September 30, 2015: Foreign currency translation adjustments $ (9 ) 12 3 Other comprehensive (loss) income (9 ) 12 3 Three months ended September 30, 2014: Foreign currency translation adjustments $ (145 ) 29 (116 ) Other comprehensive loss (145 ) 29 (116 ) Nine months ended September 30, 2015: Foreign currency translation adjustments $ (89 ) 12 (77 ) Other comprehensive loss (89 ) 12 (77 ) Nine months ended September 30, 2014: Foreign currency translation adjustments $ (124 ) 26 (98 ) Other comprehensive loss (124 ) 26 (98 ) |
Guarantor_Non-Guarantor Subsi32
Guarantor/Non-Guarantor Subsidiary Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Current Period | Condensed Consolidating Balance Sheets September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 135 226 — 363 Restricted cash 9 — 3 — 12 Accounts receivable, net 660 — 214 — 874 Inventories 899 — 267 — 1,166 Deferred income taxes 175 26 11 — 212 Prepaid expenses 24 — 29 — 53 Total current assets 1,769 161 750 — 2,680 Property and equipment, net 277 67 653 — 997 Cable and satellite television distribution rights, net — 315 49 — 364 Goodwill 4,191 — 860 — 5,051 Other intangible assets, net 899 2,050 48 — 2,997 Other noncurrent assets 6 — 52 — 58 Investments in subsidiaries 3,662 2,679 — (6,341 ) — Total assets $ 10,804 5,272 2,412 (6,341 ) 12,147 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 6 — 9 Accounts payable-trade 493 — 229 — 722 Accrued liabilities 136 160 418 — 714 Intercompany accounts payable (receivable) 500 1,303 (1,803 ) — — Total current liabilities 1,132 1,463 (1,150 ) — 1,445 Long-term portion of debt and capital lease obligations 4,480 — 54 — 4,534 Deferred compensation 14 — — — 14 Deferred income taxes 237 780 16 — 1,033 Other long-term liabilities 111 — 72 — 183 Total liabilities 5,974 2,243 (1,008 ) — 7,209 Equity: QVC, Inc. stockholder's equity 4,830 3,029 3,312 (6,341 ) 4,830 Noncontrolling interest — — 108 — 108 Total equity 4,830 3,029 3,420 (6,341 ) 4,938 Total liabilities and equity $ 10,804 5,272 2,412 (6,341 ) 12,147 |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Prior Period | Condensed Consolidating Balance Sheets December 31, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 123 222 — 347 Restricted cash 10 — 2 — 12 Accounts receivable, net 909 — 287 — 1,196 Inventories 680 — 202 — 882 Deferred income taxes 192 — 18 — 210 Prepaid expenses 25 — 25 — 50 Total current assets 1,818 123 756 — 2,697 Property and equipment, net 273 68 685 — 1,026 Cable and satellite television distribution rights, net — 388 73 — 461 Goodwill 4,184 — 907 — 5,091 Other intangible assets, net 1,023 2,051 69 — 3,143 Other noncurrent assets 1 — 57 — 58 Investments in subsidiaries 4,681 1,386 — (6,067 ) — Total assets $ 11,980 4,016 2,547 (6,067 ) 12,476 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 2 — 7 — 9 Accounts payable-trade 420 — 209 — 629 Accrued liabilities 282 143 460 — 885 Intercompany accounts payable (receivable) 1,384 (921 ) (463 ) — — Total current liabilities 2,088 (778 ) 213 — 1,523 Long-term portion of debt and capital lease obligations 4,565 — 55 — 4,620 Deferred compensation 16 — 1 — 17 Deferred income taxes 269 877 (25 ) — 1,121 Other long-term liabilities 99 — 50 — 149 Total liabilities 7,037 99 294 — 7,430 Equity: QVC, Inc. stockholder's equity 4,943 3,917 2,150 (6,067 ) 4,943 Noncontrolling interest — — 103 — 103 Total equity 4,943 3,917 2,253 (6,067 ) 5,046 Total liabilities and equity $ 11,980 4,016 2,547 (6,067 ) 12,476 |
Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Current Period | Condensed Consolidating Statements of Operations Three months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,458 223 641 (315 ) 2,007 Cost of goods sold 905 27 385 (51 ) 1,266 Gross profit 553 196 256 (264 ) 741 Operating expenses: Operating 95 63 88 (72 ) 174 Selling, general and administrative, including stock-based compensation 255 — 83 (192 ) 146 Depreciation 11 2 20 — 33 Amortization 56 40 12 — 108 417 105 203 (264 ) 461 Operating income 136 91 53 — 280 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Interest expense, net (50 ) — 1 — (49 ) Foreign currency gain 2 7 3 — 12 Intercompany interest (expense) income (1 ) (21 ) 22 — — (49 ) (14 ) 23 — (40 ) Income before income taxes 87 77 76 — 240 Income tax expense (23 ) (25 ) (38 ) — (86 ) Equity in earnings of subsidiaries, net of tax 90 37 — (127 ) — Net income 154 89 38 (127 ) 154 Less net income attributable to the noncontrolling interest (8 ) — (8 ) 8 (8 ) Net income attributable to QVC, Inc. stockholder $ 146 89 30 (119 ) 146 Condensed Consolidating Statements of Operations Nine months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,282 645 1,938 (922 ) 5,943 Cost of goods sold 2,632 75 1,153 (139 ) 3,721 Gross profit 1,650 570 785 (783 ) 2,222 Operating expenses: Operating 294 181 266 (224 ) 517 Selling, general and administrative, including stock-based compensation 757 — 245 (559 ) 443 Depreciation 32 6 63 — 101 Amortization 175 121 45 — 341 1,258 308 619 (783 ) 1,402 Operating income 392 262 166 — 820 Other (expense) income: Equity in losses of investee — — (7 ) — (7 ) Interest expense, net (157 ) — (1 ) — (158 ) Foreign currency gain (loss) 7 (6 ) 10 — 11 Loss on extinguishment of debt (21 ) — — — (21 ) Intercompany interest (expense) income (7 ) (30 ) 37 — — (178 ) (36 ) 39 — (175 ) Income before income taxes 214 226 205 — 645 Income tax expense (63 ) (101 ) (79 ) — (243 ) Equity in earnings of subsidiaries, net of tax 251 145 — (396 ) — Net income 402 270 126 (396 ) 402 Less net income attributable to the noncontrolling interest (25 ) — (25 ) 25 (25 ) Net income attributable to QVC, Inc. stockholder $ 377 270 101 (371 ) 377 |
Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Prior Period | Condensed Consolidating Statements of Operations Nine months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,133 601 2,196 (910 ) 6,020 Cost of goods sold 2,565 75 1,308 (176 ) 3,772 Gross profit 1,568 526 888 (734 ) 2,248 Operating expenses: Operating 276 174 295 (209 ) 536 Selling, general and administrative, including stock-based compensation 713 — 268 (525 ) 456 Depreciation 29 4 67 — 100 Amortization 166 115 55 — 336 1,184 293 685 (734 ) 1,428 Operating income 384 233 203 — 820 Other (expense) income: Equity in losses of investee — — (5 ) — (5 ) Interest expense, net (173 ) — (9 ) — (182 ) Foreign currency gain (loss) 3 (2 ) 1 — 2 Loss on extinguishment of debt (48 ) — — — (48 ) Intercompany interest and other (expense) income (16 ) 39 (3 ) (20 ) — (234 ) 37 (16 ) (20 ) (233 ) Income before income taxes 150 270 187 (20 ) 587 Income tax expense (22 ) (81 ) (119 ) — (222 ) Equity in earnings (losses) of subsidiaries, net of tax 237 (6 ) — (231 ) — Net income 365 183 68 (251 ) 365 Less net income attributable to the noncontrolling interest (27 ) — (27 ) 27 (27 ) Net income attributable to QVC, Inc. stockholder $ 338 183 41 (224 ) 338 Condensed Consolidating Statements of Operations Three months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,404 210 745 (339 ) 2,020 Cost of goods sold 873 27 430 (64 ) 1,266 Gross profit 531 183 315 (275 ) 754 Operating expenses: Operating 115 61 95 (93 ) 178 Selling, general and administrative, including stock-based compensation 250 — 85 (182 ) 153 Depreciation 10 1 23 — 34 Amortization 56 39 18 — 113 431 101 221 (275 ) 478 Operating income 100 82 94 — 276 Other (expense) income: Equity in losses of investee — — (2 ) — (2 ) Interest expense, net (60 ) — — — (60 ) Foreign currency gain (loss) 6 (2 ) (2 ) — 2 Loss on extinguishment of debt (48 ) — — — (48 ) Intercompany interest (expense) income (6 ) 13 (7 ) — — (108 ) 11 (11 ) — (108 ) (Loss) income before income taxes (8 ) 93 83 — 168 Income tax expense (15 ) (29 ) (21 ) — (65 ) Equity in earnings of subsidiaries, net of tax 126 13 — (139 ) — Net income 103 77 62 (139 ) 103 Less net income attributable to the noncontrolling interest (8 ) — (8 ) 8 (8 ) Net income attributable to QVC, Inc. stockholder $ 95 77 54 (131 ) 95 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Current Period | Condensed Consolidating Statements of Comprehensive Income Nine months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 402 270 126 (396 ) 402 Foreign currency translation adjustments (77 ) — (77 ) 77 (77 ) Total comprehensive income 325 270 49 (319 ) 325 Comprehensive income attributable to noncontrolling interest (25 ) — (25 ) 25 (25 ) Comprehensive income attributable to QVC, Inc. stockholder $ 300 270 24 (294 ) 300 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 154 89 38 (127 ) 154 Foreign currency translation adjustments 3 — 3 (3 ) 3 Total comprehensive income 157 89 41 (130 ) 157 Comprehensive income attributable to noncontrolling interest (11 ) — (11 ) 11 (11 ) Comprehensive income attributable to QVC, Inc. stockholder $ 146 89 30 (119 ) 146 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Prior Period | Condensed Consolidating Statements of Comprehensive Income Nine months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 365 183 68 (251 ) 365 Foreign currency translation adjustments (98 ) — (98 ) 98 (98 ) Total comprehensive income (loss) 267 183 (30 ) (153 ) 267 Comprehensive income attributable to noncontrolling interest (23 ) — (23 ) 23 (23 ) Comprehensive income (loss) attributable to QVC, Inc. stockholder $ 244 183 (53 ) (130 ) 244 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 103 77 62 (139 ) 103 Foreign currency translation adjustments (116 ) — (116 ) 116 (116 ) Total comprehensive (loss) income (13 ) 77 (54 ) (23 ) (13 ) Comprehensive income attributable to noncontrolling interest (1 ) — (1 ) 1 (1 ) Comprehensive (loss) income attributable to QVC, Inc. stockholder $ (14 ) 77 (55 ) (22 ) (14 ) |
Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Current Period | Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 351 152 277 — 780 Investing activities: Capital expenditures (90 ) (6 ) (36 ) — (132 ) Expenditures for cable and satellite television distribution rights, net — (45 ) (3 ) — (48 ) Decrease (increase) in restricted cash 1 — (1 ) — — Changes in other noncurrent assets — — (1 ) — (1 ) Other investing activities 2 — — — 2 Intercompany investing activities 339 382 — (721 ) — Net cash provided by (used in) investing activities 252 331 (41 ) (721 ) (179 ) Financing activities: Principal payments of debt and capital lease obligations (1,560 ) — (5 ) — (1,565 ) Principal borrowings of debt from senior secured credit facility 1,470 — — — 1,470 Payment of debt origination fees (3 ) — — — (3 ) Payment of bond premium fees (18 ) — — — (18 ) Other financing activities (1 ) — — — (1 ) Dividends paid to Liberty (444 ) — — — (444 ) Dividends paid to noncontrolling interest — — (20 ) — (20 ) Net short-term intercompany debt (repayments) borrowings (884 ) 2,224 (1,340 ) — — Other intercompany financing activities 837 (2,695 ) 1,137 721 — Net cash (used in) provided by financing activities (603 ) (471 ) (228 ) 721 (581 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (4 ) — (4 ) Net increase in cash and cash equivalents — 12 4 — 16 Cash and cash equivalents, beginning of period 2 123 222 — 347 Cash and cash equivalents, end of period $ 2 135 226 — 363 |
Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Prior Period | Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2014 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 311 273 228 — 812 Investing activities: Capital expenditures (103 ) (3 ) 27 (20 ) (99 ) Expenditures for cable and satellite television distribution rights, net — (30 ) — — (30 ) Decrease in restricted cash 1 — 1 — 2 Changes in other noncurrent assets (1 ) — — — (1 ) Other investing activities 1 — — — 1 Intercompany investing activities 258 78 — (336 ) — Net cash provided by (used in) investing activities 156 45 28 (356 ) (127 ) Financing activities: Principal payments of debt and capital lease obligations (2,388 ) — (8 ) — (2,396 ) Principal borrowings of debt from senior secured credit facility 726 — — — 726 Proceeds from issuance of senior secured notes, net of original issue discount 1,997 — — — 1,997 Payment of debt origination fees (25 ) — — — (25 ) Payment of bond premium fees (32 ) — — — (32 ) Other financing activities (5 ) — — — (5 ) Dividends paid to Liberty (764 ) — — — (764 ) Dividends paid to noncontrolling interest — — (25 ) — (25 ) Net short-term intercompany debt borrowings (repayments) 90 76 (166 ) — — Other intercompany financing activities (143 ) (302 ) 89 356 — Net cash used in financing activities (544 ) (226 ) (110 ) 356 (524 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (32 ) — (32 ) Net (decrease) increase in cash and cash equivalents (77 ) 92 114 — 129 Cash and cash equivalents, beginning of period 78 133 246 — 457 Cash and cash equivalents, end of period $ 1 225 360 — 586 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | Oct. 03, 2014 | Mar. 08, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 |
General business information | |||||
Dividend paid to noncontrolling interest | $ 20 | $ 25 | |||
Cash dividends paid to Liberty | $ (444) | $ (764) | |||
Liberty | |||||
General business information | |||||
Cash dividends paid to Liberty | $ 1,000 | ||||
CNR Home Shopping Co., Ltd. | |||||
General business information | |||||
Equity method investment, ownership percentage | 49.00% | 49.00% | |||
QVC-Japan | |||||
General business information | |||||
Investment owned, percent of net assets | 60.00% | 60.00% | |||
Noncontrolling interest, ownership percentage by noncontrolling owners | 40.00% | 40.00% | |||
Liberty Ventures Group | |||||
General business information | |||||
Cash dividends paid to Liberty | $ 970 | ||||
HSN, Inc. | |||||
General business information | |||||
Parent ownership in equity investment | 38.00% | 38.00% | |||
Live Programming - U.S. | |||||
General business information | |||||
Hours of distribution per day | 24 hours | ||||
Days per year of programming | 364 days | ||||
Live Programming - France | |||||
General business information | |||||
Hours of Distribution Each Day, Weekdays | 8 hours | ||||
Hours of Distribution Each Day, Weekends | 12 hours | ||||
Recorded Programming - France | |||||
General business information | |||||
Hours of Distribution Each Day, Weekdays | 14 hours | ||||
Hours of Distribution Each Day, Weekends | 10 hours | ||||
General Interest Programming - France | |||||
General business information | |||||
Hours of Distribution Each Day, Weekdays | 2 hours | ||||
Hours of Distribution Each Day, Weekends | 2 hours | ||||
Distribution - Germany | |||||
General business information | |||||
Hours of distribution per day | 24 hours | ||||
Live Programming - Germany | |||||
General business information | |||||
Hours of distribution per day | 17 hours | ||||
Live Programming - Japan | |||||
General business information | |||||
Hours of distribution per day | 24 hours | ||||
Distribution - U.K. | |||||
General business information | |||||
Hours of distribution per day | 24 hours | ||||
Live Programming - U.K. | |||||
General business information | |||||
Hours of distribution per day | 17 hours | 16 hours | |||
Live Programming - Italy | |||||
General business information | |||||
Hours of distribution per day | 17 hours | ||||
Recorded Programming - Italy | |||||
General business information | |||||
Hours of distribution per day | 7 hours | ||||
Live Programming - CNRS | |||||
General business information | |||||
Hours of distribution per day | 17 hours | ||||
Recorded Programming - CNRS | |||||
General business information | |||||
Hours of distribution per day | 7 hours |
Cable and Satellite Televisio34
Cable and Satellite Television Distribution Rights, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Cable and satellite television distribution rights, net | $ 2,997 | $ 2,997 | $ 3,143 | ||
Amortization | 108 | $ 113 | 341 | $ 336 | |
Cable and satellite television distribution rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cable and satellite television distribution rights | 2,258 | 2,258 | 2,308 | ||
Less accumulated amortization | (1,894) | (1,894) | (1,847) | ||
Cable and satellite television distribution rights, net | 364 | 364 | $ 461 | ||
Amortization | $ 45 | $ 46 | $ 140 | $ 139 |
Cable and Satellite Televisio35
Cable and Satellite Television Distribution Rights, Net (Future Amortization Expense) (Details) $ in Millions | Sep. 30, 2015USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2015 | $ 69 |
2,016 | 267 |
2,017 | 175 |
2,018 | 31 |
2,019 | 9 |
Cable and satellite television distribution rights | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2015 | 43 |
2,016 | 171 |
2,017 | 118 |
2,018 | 12 |
2,019 | $ 9 |
Goodwill Goodwill (Details)
Goodwill Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | $ 5,091 |
Exchange rate fluctuations | (40) |
Balance as of September 30, 2015 | 5,051 |
QVC-U.S. | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | 4,190 |
Exchange rate fluctuations | 0 |
Balance as of September 30, 2015 | 4,190 |
QVC-Germany | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | 308 |
Exchange rate fluctuations | (24) |
Balance as of September 30, 2015 | 284 |
QVC-Japan | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | 253 |
Exchange rate fluctuations | (1) |
Balance as of September 30, 2015 | 252 |
QVC-U.K. | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | 203 |
Exchange rate fluctuations | (4) |
Balance as of September 30, 2015 | 199 |
QVC-Italy | |
Goodwill [Line Items] | |
Balance as of December 31, 2014 | 137 |
Exchange rate fluctuations | (11) |
Balance as of September 30, 2015 | $ 126 |
Other Intangible Assets, Net (O
Other Intangible Assets, Net (Other Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Gross cost | |||||
Purchased and internally developed software | $ 594 | $ 594 | $ 568 | ||
Affiliate and customer relationships | 2,414 | 2,414 | 2,428 | ||
Debt origination fees | 53 | 53 | 60 | ||
Trademarks (indefinite life) | 2,428 | 2,428 | 2,428 | ||
Other intangible assets (excluding goodwill), gross | 5,489 | 5,489 | 5,484 | ||
Accumulated amortization | |||||
Purchased and internally developed software | (404) | (404) | (369) | ||
Affiliate and customer relationships | (2,076) | (2,076) | (1,958) | ||
Debt origination fees | (12) | (12) | (14) | ||
Other intangible assets (excluding goodwill), accumulated amortization | (2,492) | (2,492) | (2,341) | ||
Other intangible assets, net | |||||
Purchased and internally developed software | 190 | 190 | 199 | ||
Affiliate and customer relationships | 338 | 338 | 470 | ||
Debt origination fees | 41 | 41 | 46 | ||
Other intangible assets (excluding goodwill), net | 2,997 | 2,997 | $ 3,143 | ||
Amortization of other intangible assets | $ 63 | $ 67 | $ 201 | $ 197 |
Other Intangible Assets, Net (F
Other Intangible Assets, Net (Future Amortization Expense) (Details) $ in Millions | Sep. 30, 2015USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2015 | $ 69 |
2,016 | 267 |
2,017 | 175 |
2,018 | 31 |
2,019 | $ 9 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Accrued Liabilities [Abstract] | ||
Accounts payable non-trade | $ 185 | $ 200 |
Accrued compensation and benefits | 115 | 110 |
Deferred revenue | 90 | 85 |
Allowance for sales returns | 84 | 109 |
Income taxes | 72 | 137 |
Sales and other taxes | 49 | 83 |
Accrued interest | 47 | 79 |
Other | 72 | 82 |
Accrued liabilities | $ 714 | $ 885 |
Long-Term Debt (Debt) (Details)
Long-Term Debt (Debt) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Apr. 15, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 4,543 | $ 4,629 | |
Less current portion | (9) | (9) | |
Long-term portion of debt and capital lease obligations | 4,534 | 4,620 | |
3.125% Senior Secured Notes due 2019, net of original issue discount | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 399 | 399 | |
Debt instrument interest rate stated percentage | 3.125% | ||
7.375% Senior Secured Notes due 2020 | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 0 | 500 | |
Debt instrument interest rate stated percentage | 7.375% | 7.375% | |
5.125% Senior Secured Notes due 2022 | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 500 | 500 | |
Debt instrument interest rate stated percentage | 5.125% | ||
4.375% Senior Secured Notes due 2023, net of original issue discount | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 750 | 750 | |
Debt instrument interest rate stated percentage | 4.375% | ||
4.85% Senior Secured Notes due 2024, net of original issue discount | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 600 | 600 | |
Debt instrument interest rate stated percentage | 4.85% | ||
4.45% Senior Secured Notes due 2025, net of original issue discount | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 599 | 599 | |
Debt instrument interest rate stated percentage | 4.45% | ||
5.45% Senior Secured Notes due 2034, net of original issue discount | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 399 | 399 | |
Debt instrument interest rate stated percentage | 5.45% | ||
5.95% Senior Secured Notes due 2043, net of original issue discount | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 300 | 300 | |
Debt instrument interest rate stated percentage | 5.95% | ||
Senior secured credit facility | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 920 | 508 | |
Capital lease obligations | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 76 | $ 74 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Apr. 15, 2015 | Mar. 09, 2015 | |
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt | $ 0 | $ (48,000,000) | $ (21,000,000) | $ (48,000,000) | ||
Line of credit facility maximum borrowing capacity | $ 2,250,000,000 | |||||
Line of credit facility standby letter of credit | 250,000,000 | |||||
Line of credit facility uncommitted loan | $ 1,500,000,000 | |||||
Debt instrument lower range of basis spread on variable rate | 0.25% | |||||
Debt instrument higher range of basis spread on variable rate | 1.75% | |||||
Line of credit facility remaining borrowing capacity | $ 1,300,000,000 | $ 1,300,000,000 | ||||
Line of credit facility interest rate at period end | 1.70% | 1.70% | ||||
Debt weighted average interest rate | 4.10% | 4.10% | ||||
7.375% Senior Secured Notes due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 500,000,000 | |||||
Debt instrument interest rate stated percentage | 7.375% | 7.375% | 7.375% | |||
Debt Instrument, Repurchase Price Including Premium | $ 1,036.88 | |||||
Debt Insturment, Face Value of Individual Bonds Repurchased | $ 1,000 |
Leases and Transponder Servic42
Leases and Transponder Service Agreements (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)ft² | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)ft² | Sep. 30, 2014USD ($) | |
Capital transponders | ||||
Remainder of 2015 | $ 3 | $ 3 | ||
2,016 | 11 | 11 | ||
2,017 | 12 | 12 | ||
2,018 | 14 | 14 | ||
2,019 | 13 | 13 | ||
Thereafter | 29 | 29 | ||
Total | 82 | 82 | ||
Operating leases | ||||
Remainder of 2015 | 5 | 5 | ||
2,016 | 20 | 20 | ||
2,017 | 18 | 18 | ||
2,018 | 16 | 16 | ||
2,019 | 13 | 13 | ||
Thereafter | 96 | 96 | ||
Total | 168 | 168 | ||
Built to suit lease | ||||
Remainder of 2015 | 0 | 0 | ||
2,016 | 0 | 0 | ||
2,017 | 5 | 5 | ||
2,018 | 6 | 6 | ||
2,019 | 6 | 6 | ||
Thereafter | 79 | 79 | ||
Total | $ 96 | $ 96 | ||
Capital leased assets, number of units | 12 | 12 | ||
Capital transponder monthly lease expense | $ 1 | $ 1 | ||
Capital leases depreciation expense | 3 | $ 3 | 10 | $ 9 |
Imputed interest on capital lease | 6 | 6 | ||
Operating leases expense net | $ 7 | $ 6 | $ 19 | $ 20 |
Area of lease (in sqft) | ft² | 1,000,000 | 1,000,000 | ||
Initial term of lease | 15 years | |||
Minimum base rent | $ 6 | |||
Maximum base rent | $ 8 | |||
Number of extension options | 2 | |||
Term of lease extensions | 10 years | |||
Amended arrangement initial payment | $ 10 | |||
Amended arrangement annual installment payments | $ 12 | |||
Amended arrangement payment term | 13 years | |||
Construction in progress, gross | $ 14 | $ 14 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | |||||
Income tax expense | $ (86) | $ (65) | $ (243) | $ (222) | |
Effective income tax rate reconciliation, percent | 35.80% | 37.70% | |||
UNITED STATES | |||||
Income Tax Contingency [Line Items] | |||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 35.00% | ||||
Liberty | Tax Agreement | |||||
Income Tax Contingency [Line Items] | |||||
Current tax payments due to related parties | $ 15 | $ 15 | $ 55 |
Assets and Liabilities Measur44
Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash equivalents | $ 235 | $ 245 |
Long-term liabilities: | ||
Debt (note 6) | 4,397 | 4,626 |
Level 1 | ||
Current assets: | ||
Cash equivalents | 235 | 245 |
Level 2 | ||
Long-term liabilities: | ||
Debt (note 6) | $ 4,397 | $ 4,626 |
Information about QVC's Opera45
Information about QVC's Operating Segments (Revenue and Adjusted OIBDA by Segment) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Segment | Sep. 30, 2014USD ($) | |
Segment Reporting [Abstract] | ||||
Number of operating segments | Segment | 6 | |||
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 2,007 | $ 2,020 | $ 5,943 | $ 6,020 |
Adjusted OIBDA | 430 | 439 | 1,286 | 1,290 |
QVC-U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1,420 | 1,368 | 4,168 | 4,025 |
Adjusted OIBDA | 333 | 329 | 988 | 955 |
QVC-Germany | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 199 | 229 | 602 | 706 |
Adjusted OIBDA | 36 | 42 | 110 | 121 |
QVC-Japan | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 192 | 216 | 590 | 673 |
Adjusted OIBDA | 35 | 41 | 111 | 131 |
QVC-U.K. | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 168 | 173 | 497 | 516 |
Adjusted OIBDA | 33 | 31 | 96 | 91 |
QVC-Italy | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 28 | 34 | 86 | 100 |
Adjusted OIBDA | 0 | (1) | (3) | (5) |
QVC-France | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Adjusted OIBDA | $ (7) | $ (3) | $ (16) | $ (3) |
Information about QVC's Opera46
Information about QVC's Operating Segments (Depreciation/Amortization by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Depreciation | $ 33 | $ 34 | $ 101 | $ 100 |
Amortization | 108 | 113 | 341 | 336 |
QVC-U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 15 | 14 | 47 | 41 |
Amortization | 97 | 98 | 303 | 290 |
QVC-Germany | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 7 | 8 | 20 | 24 |
Amortization | 7 | 9 | 23 | 28 |
QVC-Japan | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 5 | 5 | 15 | 14 |
Amortization | 2 | 3 | 6 | 7 |
QVC-U.K. | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 3 | 5 | 11 | 13 |
Amortization | 2 | 3 | 8 | 10 |
QVC-Italy | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 2 | 2 | 7 | 8 |
Amortization | 0 | 0 | 1 | 1 |
QVC-France | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 1 | 0 | 1 | 0 |
Amortization | $ 0 | $ 0 | $ 0 | $ 0 |
Information about QVC's Opera47
Information about QVC's Operating Segments (Total Assets and CAPEX by Segment) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Total assets | $ 12,147 | $ 12,476 |
Capital expenditures | 132 | 183 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,925 | 10,133 |
Capital expenditures | 98 | 141 |
QVC-Germany | ||
Segment Reporting Information [Line Items] | ||
Total assets | 851 | 915 |
Capital expenditures | 7 | 10 |
QVC-Japan | ||
Segment Reporting Information [Line Items] | ||
Total assets | 619 | 644 |
Capital expenditures | 2 | 2 |
QVC-U.K. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 500 | 537 |
Capital expenditures | 10 | 16 |
QVC-Italy | ||
Segment Reporting Information [Line Items] | ||
Total assets | 224 | 245 |
Capital expenditures | 2 | 13 |
QVC-France | ||
Segment Reporting Information [Line Items] | ||
Total assets | 28 | 2 |
Capital expenditures | $ 13 | $ 1 |
Information about QVC's Opera48
Information about QVC's Operating Segments (Long-lived Assets by Segment) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 997 | $ 1,026 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 479 | 463 |
QVC-Germany | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 180 | 209 |
QVC-Japan | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 161 | 176 |
QVC-U.K. | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 107 | 120 |
QVC-Italy | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 48 | 57 |
QVC-France | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 22 | $ 1 |
Information about QVC's Opera49
Information about QVC's Operating Segments (Reconciliation of Adjusted OIBDA to Income before Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting [Abstract] | ||||
Adjusted OIBDA | $ 430 | $ 439 | $ 1,286 | $ 1,290 |
Stock-based compensation | (9) | (16) | (24) | (34) |
Depreciation and amortization | (141) | (147) | (442) | (436) |
Equity in losses of investee | (3) | (2) | (7) | (5) |
Interest expense, net | (49) | (60) | (158) | (182) |
Foreign currency gain | 12 | 2 | 11 | 2 |
Loss on extinguishment of debt | 0 | (48) | (21) | (48) |
Income before income taxes | $ 240 | $ 168 | $ 645 | $ 587 |
Other Comprehensive Income (Acc
Other Comprehensive Income (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Foreign currency translation adjustments | ||
Beginning balance | $ (39) | $ 139 |
Other comprehensive loss attributable to QVC, Inc. stockholder | (77) | (94) |
Ending balance | (116) | 45 |
AOCI | ||
Beginning balance | (39) | 139 |
Other comprehensive loss attributable to QVC, Inc. stockholder | (77) | (94) |
Ending balance | $ (116) | $ 45 |
Other Comprehensive Income (Com
Other Comprehensive Income (Component of Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Foreign currency translation adjustments before tax | $ (9) | $ (145) | $ (89) | $ (124) |
Tax (expense) benefit from foreign currency translation gain (loss) | 12 | 29 | 12 | 26 |
Foreign currency translation adjustments | $ 3 | $ (116) | $ (77) | $ (98) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Nov. 05, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Subsequent Event [Line Items] | |||
Dividends paid to Liberty | $ (444) | $ (764) | |
Liberty | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividends paid to Liberty | $ 910 |
Guarantor_Non-Guarantor Subsi53
Guarantor/Non-Guarantor Subsidiary Financial Information (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2015 | |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | ||
Intercompany Gain | $ 20 | |
Subsidiary Guarantors, Ownership Percentage | 100.00% |
Guarantor_Non-Guarantor Subsi54
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Financial Position) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ||||
Cash and cash equivalents | $ 363 | $ 347 | $ 586 | $ 457 |
Restricted cash | 12 | 12 | ||
Accounts receivable, net | 874 | 1,196 | ||
Inventories | 1,166 | 882 | ||
Deferred income taxes | 212 | 210 | ||
Prepaid expenses | 53 | 50 | ||
Total current assets | 2,680 | 2,697 | ||
Property and equipment, net | 997 | 1,026 | ||
Cable and satellite television distribution rights, net | 364 | 461 | ||
Goodwill | 5,051 | 5,091 | ||
Other intangible assets, net | 2,997 | 3,143 | ||
Other noncurrent assets | 58 | 58 | ||
Investments in subsidiaries | 0 | 0 | ||
Total assets | 12,147 | 12,476 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 9 | 9 | ||
Accounts payable-trade | 722 | 629 | ||
Accrued liabilities | 714 | 885 | ||
Intercompany accounts payable (receivable) | 0 | 0 | ||
Total current liabilities | 1,445 | 1,523 | ||
Long-term portion of debt and capital lease obligations | 4,534 | 4,620 | ||
Deferred compensation | 14 | 17 | ||
Deferred income taxes | 1,033 | 1,121 | ||
Other long-term liabilities | 183 | 149 | ||
Total liabilities | 7,209 | 7,430 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 4,830 | 4,943 | ||
Noncontrolling interest | 108 | 103 | ||
Total equity | 4,938 | 5,046 | ||
Total liabilities and equity | 12,147 | 12,476 | ||
Parent issuer- QVC, Inc. | ||||
Current assets: | ||||
Cash and cash equivalents | 2 | 2 | 1 | 78 |
Restricted cash | 9 | 10 | ||
Accounts receivable, net | 660 | 909 | ||
Inventories | 899 | 680 | ||
Deferred income taxes | 175 | 192 | ||
Prepaid expenses | 24 | 25 | ||
Total current assets | 1,769 | 1,818 | ||
Property and equipment, net | 277 | 273 | ||
Cable and satellite television distribution rights, net | 0 | 0 | ||
Goodwill | 4,191 | 4,184 | ||
Other intangible assets, net | 899 | 1,023 | ||
Other noncurrent assets | 6 | 1 | ||
Investments in subsidiaries | 3,662 | 4,681 | ||
Total assets | 10,804 | 11,980 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 3 | 2 | ||
Accounts payable-trade | 493 | 420 | ||
Accrued liabilities | 136 | 282 | ||
Intercompany accounts payable (receivable) | 500 | 1,384 | ||
Total current liabilities | 1,132 | 2,088 | ||
Long-term portion of debt and capital lease obligations | 4,480 | 4,565 | ||
Deferred compensation | 14 | 16 | ||
Deferred income taxes | 237 | 269 | ||
Other long-term liabilities | 111 | 99 | ||
Total liabilities | 5,974 | 7,037 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 4,830 | 4,943 | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | 4,830 | 4,943 | ||
Total liabilities and equity | 10,804 | 11,980 | ||
Combined subsidiary guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 135 | 123 | 225 | 133 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Deferred income taxes | 26 | 0 | ||
Prepaid expenses | 0 | 0 | ||
Total current assets | 161 | 123 | ||
Property and equipment, net | 67 | 68 | ||
Cable and satellite television distribution rights, net | 315 | 388 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 2,050 | 2,051 | ||
Other noncurrent assets | 0 | 0 | ||
Investments in subsidiaries | 2,679 | 1,386 | ||
Total assets | 5,272 | 4,016 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 0 | 0 | ||
Accounts payable-trade | 0 | 0 | ||
Accrued liabilities | 160 | 143 | ||
Intercompany accounts payable (receivable) | 1,303 | (921) | ||
Total current liabilities | 1,463 | (778) | ||
Long-term portion of debt and capital lease obligations | 0 | 0 | ||
Deferred compensation | 0 | 0 | ||
Deferred income taxes | 780 | 877 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 2,243 | 99 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 3,029 | 3,917 | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | 3,029 | 3,917 | ||
Total liabilities and equity | 5,272 | 4,016 | ||
Combined non-guarantor subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 226 | 222 | 360 | 246 |
Restricted cash | 3 | 2 | ||
Accounts receivable, net | 214 | 287 | ||
Inventories | 267 | 202 | ||
Deferred income taxes | 11 | 18 | ||
Prepaid expenses | 29 | 25 | ||
Total current assets | 750 | 756 | ||
Property and equipment, net | 653 | 685 | ||
Cable and satellite television distribution rights, net | 49 | 73 | ||
Goodwill | 860 | 907 | ||
Other intangible assets, net | 48 | 69 | ||
Other noncurrent assets | 52 | 57 | ||
Investments in subsidiaries | 0 | 0 | ||
Total assets | 2,412 | 2,547 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 6 | 7 | ||
Accounts payable-trade | 229 | 209 | ||
Accrued liabilities | 418 | 460 | ||
Intercompany accounts payable (receivable) | (1,803) | (463) | ||
Total current liabilities | (1,150) | 213 | ||
Long-term portion of debt and capital lease obligations | 54 | 55 | ||
Deferred compensation | 0 | 1 | ||
Deferred income taxes | 16 | (25) | ||
Other long-term liabilities | 72 | 50 | ||
Total liabilities | (1,008) | 294 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 3,312 | 2,150 | ||
Noncontrolling interest | 108 | 103 | ||
Total equity | 3,420 | 2,253 | ||
Total liabilities and equity | 2,412 | 2,547 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Prepaid expenses | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Cable and satellite television distribution rights, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other noncurrent assets | 0 | 0 | ||
Investments in subsidiaries | (6,341) | (6,067) | ||
Total assets | (6,341) | (6,067) | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 0 | 0 | ||
Accounts payable-trade | 0 | 0 | ||
Accrued liabilities | 0 | 0 | ||
Intercompany accounts payable (receivable) | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Long-term portion of debt and capital lease obligations | 0 | 0 | ||
Deferred compensation | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | (6,341) | (6,067) | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | (6,341) | (6,067) | ||
Total liabilities and equity | $ (6,341) | $ (6,067) |
Guarantor_Non-Guarantor Subsi55
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | $ 2,007 | $ 2,020 | $ 5,943 | $ 6,020 |
Cost of goods sold | 1,266 | 1,266 | 3,721 | 3,772 |
Gross profit | 741 | 754 | 2,222 | 2,248 |
Operating expenses: | ||||
Operating | 174 | 178 | 517 | 536 |
Selling, general and administrative, including stock-based compensation | 146 | 153 | 443 | 456 |
Depreciation | 33 | 34 | 101 | 100 |
Amortization | 108 | 113 | 341 | 336 |
Operating expenses | 461 | 478 | 1,402 | 1,428 |
Operating income | 280 | 276 | 820 | 820 |
Other (expense) income: | ||||
Equity in losses of investee | (3) | (2) | (7) | (5) |
Interest expense, net | (49) | (60) | (158) | (182) |
Foreign currency gain | 12 | 2 | 11 | 2 |
Loss on extinguishment of debt | 0 | (48) | (21) | (48) |
Intercompany interest (expense) income | 0 | 0 | 0 | 0 |
Nonoperating expense | (40) | (108) | (175) | (233) |
Income before income taxes | 240 | 168 | 645 | 587 |
Income tax expense | (86) | (65) | (243) | (222) |
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | 0 |
Net income | 154 | 103 | 402 | 365 |
Less net income attributable to the noncontrolling interest | (8) | (8) | (25) | (27) |
Net income attributable to QVC, Inc. stockholder | 146 | 95 | 377 | 338 |
Parent issuer- QVC, Inc. | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | 1,458 | 1,404 | 4,282 | 4,133 |
Cost of goods sold | 905 | 873 | 2,632 | 2,565 |
Gross profit | 553 | 531 | 1,650 | 1,568 |
Operating expenses: | ||||
Operating | 95 | 115 | 294 | 276 |
Selling, general and administrative, including stock-based compensation | 255 | 250 | 757 | 713 |
Depreciation | 11 | 10 | 32 | 29 |
Amortization | 56 | 56 | 175 | 166 |
Operating expenses | 417 | 431 | 1,258 | 1,184 |
Operating income | 136 | 100 | 392 | 384 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | 0 | 0 | 0 |
Interest expense, net | (50) | (60) | (157) | (173) |
Foreign currency gain | 2 | 6 | 7 | 3 |
Loss on extinguishment of debt | (48) | (21) | (48) | |
Intercompany interest (expense) income | (1) | (6) | (7) | (16) |
Nonoperating expense | (49) | (108) | (178) | (234) |
Income before income taxes | 87 | (8) | 214 | 150 |
Income tax expense | (23) | (15) | (63) | (22) |
Equity in earnings of subsidiaries, net of tax | 90 | 126 | 251 | 237 |
Net income | 154 | 103 | 402 | 365 |
Less net income attributable to the noncontrolling interest | (8) | (8) | (25) | (27) |
Net income attributable to QVC, Inc. stockholder | 146 | 95 | 377 | 338 |
Combined subsidiary guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | 223 | 210 | 645 | 601 |
Cost of goods sold | 27 | 27 | 75 | 75 |
Gross profit | 196 | 183 | 570 | 526 |
Operating expenses: | ||||
Operating | 63 | 61 | 181 | 174 |
Selling, general and administrative, including stock-based compensation | 0 | 0 | 0 | 0 |
Depreciation | 2 | 1 | 6 | 4 |
Amortization | 40 | 39 | 121 | 115 |
Operating expenses | 105 | 101 | 308 | 293 |
Operating income | 91 | 82 | 262 | 233 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | 0 | 0 | 0 |
Interest expense, net | 0 | 0 | 0 | 0 |
Foreign currency gain | 7 | (2) | (6) | (2) |
Loss on extinguishment of debt | 0 | 0 | 0 | |
Intercompany interest (expense) income | (21) | 13 | (30) | 39 |
Nonoperating expense | (14) | 11 | (36) | 37 |
Income before income taxes | 77 | 93 | 226 | 270 |
Income tax expense | (25) | (29) | (101) | (81) |
Equity in earnings of subsidiaries, net of tax | 37 | 13 | 145 | (6) |
Net income | 89 | 77 | 270 | 183 |
Less net income attributable to the noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to QVC, Inc. stockholder | 89 | 77 | 270 | 183 |
Combined non-guarantor subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | 641 | 745 | 1,938 | 2,196 |
Cost of goods sold | 385 | 430 | 1,153 | 1,308 |
Gross profit | 256 | 315 | 785 | 888 |
Operating expenses: | ||||
Operating | 88 | 95 | 266 | 295 |
Selling, general and administrative, including stock-based compensation | 83 | 85 | 245 | 268 |
Depreciation | 20 | 23 | 63 | 67 |
Amortization | 12 | 18 | 45 | 55 |
Operating expenses | 203 | 221 | 619 | 685 |
Operating income | 53 | 94 | 166 | 203 |
Other (expense) income: | ||||
Equity in losses of investee | (3) | (2) | (7) | (5) |
Interest expense, net | 1 | 0 | (1) | (9) |
Foreign currency gain | 3 | (2) | 10 | 1 |
Loss on extinguishment of debt | 0 | 0 | 0 | |
Intercompany interest (expense) income | 22 | (7) | 37 | (3) |
Nonoperating expense | 23 | (11) | 39 | (16) |
Income before income taxes | 76 | 83 | 205 | 187 |
Income tax expense | (38) | (21) | (79) | (119) |
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | 0 |
Net income | 38 | 62 | 126 | 68 |
Less net income attributable to the noncontrolling interest | (8) | (8) | (25) | (27) |
Net income attributable to QVC, Inc. stockholder | 30 | 54 | 101 | 41 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | (315) | (339) | (922) | (910) |
Cost of goods sold | (51) | (64) | (139) | (176) |
Gross profit | (264) | (275) | (783) | (734) |
Operating expenses: | ||||
Operating | (72) | (93) | (224) | (209) |
Selling, general and administrative, including stock-based compensation | (192) | (182) | (559) | (525) |
Depreciation | 0 | 0 | 0 | 0 |
Amortization | 0 | 0 | 0 | 0 |
Operating expenses | (264) | (275) | (783) | (734) |
Operating income | 0 | 0 | 0 | 0 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | 0 | 0 | 0 |
Interest expense, net | 0 | 0 | 0 | 0 |
Foreign currency gain | 0 | 0 | 0 | 0 |
Loss on extinguishment of debt | 0 | 0 | 0 | |
Intercompany interest (expense) income | 0 | 0 | 0 | (20) |
Nonoperating expense | 0 | 0 | 0 | (20) |
Income before income taxes | 0 | 0 | 0 | (20) |
Income tax expense | 0 | 0 | 0 | 0 |
Equity in earnings of subsidiaries, net of tax | (127) | (139) | (396) | (231) |
Net income | (127) | (139) | (396) | (251) |
Less net income attributable to the noncontrolling interest | 8 | 8 | 25 | 27 |
Net income attributable to QVC, Inc. stockholder | $ (119) | $ (131) | $ (371) | $ (224) |
Guarantor_Non-Guarantor Subsi56
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | $ 154 | $ 103 | $ 402 | $ 365 |
Foreign currency translation adjustments | 3 | (116) | (77) | (98) |
Total comprehensive income | 157 | (13) | 325 | 267 |
Comprehensive income attributable to noncontrolling interest | (11) | (1) | (25) | (23) |
Comprehensive income attributable to QVC, Inc. stockholder | 146 | (14) | 300 | 244 |
Parent issuer- QVC, Inc. | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 154 | 103 | 402 | 365 |
Foreign currency translation adjustments | 3 | (116) | (77) | (98) |
Total comprehensive income | 157 | (13) | 325 | 267 |
Comprehensive income attributable to noncontrolling interest | (11) | (1) | (25) | (23) |
Comprehensive income attributable to QVC, Inc. stockholder | 146 | (14) | 300 | 244 |
Combined subsidiary guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 89 | 77 | 270 | 183 |
Foreign currency translation adjustments | 0 | 0 | 0 | 0 |
Total comprehensive income | 89 | 77 | 270 | 183 |
Comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Comprehensive income attributable to QVC, Inc. stockholder | 89 | 77 | 270 | 183 |
Combined non-guarantor subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 38 | 62 | 126 | 68 |
Foreign currency translation adjustments | 3 | (116) | (77) | (98) |
Total comprehensive income | 41 | (54) | 49 | (30) |
Comprehensive income attributable to noncontrolling interest | (11) | (1) | (25) | (23) |
Comprehensive income attributable to QVC, Inc. stockholder | 30 | (55) | 24 | (53) |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (127) | (139) | (396) | (251) |
Foreign currency translation adjustments | (3) | 116 | 77 | 98 |
Total comprehensive income | (130) | (23) | (319) | (153) |
Comprehensive income attributable to noncontrolling interest | 11 | 1 | 25 | 23 |
Comprehensive income attributable to QVC, Inc. stockholder | $ (119) | $ (22) | $ (294) | $ (130) |
Guarantor_Non-Guarantor Subsi57
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Cash Flow) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities: | ||
Net cash provided by operating activities | $ 780 | $ 812 |
Investing activities: | ||
Capital expenditures | (132) | (99) |
Expenditures for cable and satellite television distribution rights | (48) | (30) |
Decreases in restricted cash | 0 | 2 |
Changes in other noncurrent assets | (1) | (1) |
Other investing activities | 2 | 1 |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (179) | (127) |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (1,565) | (2,396) |
Principal borrowings of debt from senior secured credit facility | 1,470 | 726 |
Proceeds from issuance of senior secured notes, net of original issue discount | 0 | 1,997 |
Payment of debt origination fees | (3) | (25) |
Payment of bond premium fees | (18) | (32) |
Other financing activities | (1) | (5) |
Dividends paid to Liberty | (444) | (764) |
Dividends paid to noncontrolling interest | (20) | (25) |
Net short-term intercompany debt (repayments) borrowings | 0 | 0 |
Other intercompany financing activities | 0 | 0 |
Net cash (used in) provided by financing activities | (581) | (524) |
Effect of foreign exchange rate changes on cash and cash equivalents | (4) | (32) |
Net increase in cash and cash equivalents | 16 | 129 |
Cash and cash equivalents, beginning of period | 347 | 457 |
Cash and cash equivalents, end of period | 363 | 586 |
Parent issuer- QVC, Inc. | ||
Operating activities: | ||
Net cash provided by operating activities | 351 | 311 |
Investing activities: | ||
Capital expenditures | (90) | (103) |
Expenditures for cable and satellite television distribution rights | 0 | 0 |
Decreases in restricted cash | 1 | 1 |
Changes in other noncurrent assets | 0 | (1) |
Other investing activities | 2 | 1 |
Intercompany investing activities | 339 | 258 |
Net cash used in investing activities | 252 | 156 |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (1,560) | (2,388) |
Principal borrowings of debt from senior secured credit facility | 1,470 | 726 |
Proceeds from issuance of senior secured notes, net of original issue discount | 1,997 | |
Payment of debt origination fees | (3) | (25) |
Payment of bond premium fees | (18) | (32) |
Other financing activities | (1) | (5) |
Dividends paid to Liberty | (444) | (764) |
Dividends paid to noncontrolling interest | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | (884) | 90 |
Other intercompany financing activities | 837 | (143) |
Net cash (used in) provided by financing activities | (603) | (544) |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase in cash and cash equivalents | 0 | (77) |
Cash and cash equivalents, beginning of period | 2 | 78 |
Cash and cash equivalents, end of period | 2 | 1 |
Combined subsidiary guarantors | ||
Operating activities: | ||
Net cash provided by operating activities | 152 | 273 |
Investing activities: | ||
Capital expenditures | (6) | (3) |
Expenditures for cable and satellite television distribution rights | (45) | (30) |
Decreases in restricted cash | 0 | 0 |
Changes in other noncurrent assets | 0 | 0 |
Other investing activities | 0 | 0 |
Intercompany investing activities | 382 | 78 |
Net cash used in investing activities | 331 | 45 |
Financing activities: | ||
Principal payments of debt and capital lease obligations | 0 | 0 |
Principal borrowings of debt from senior secured credit facility | 0 | 0 |
Proceeds from issuance of senior secured notes, net of original issue discount | 0 | |
Payment of debt origination fees | 0 | 0 |
Payment of bond premium fees | 0 | 0 |
Other financing activities | 0 | 0 |
Dividends paid to Liberty | 0 | 0 |
Dividends paid to noncontrolling interest | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | 2,224 | 76 |
Other intercompany financing activities | (2,695) | (302) |
Net cash (used in) provided by financing activities | (471) | (226) |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase in cash and cash equivalents | 12 | 92 |
Cash and cash equivalents, beginning of period | 123 | 133 |
Cash and cash equivalents, end of period | 135 | 225 |
Combined non-guarantor subsidiaries | ||
Operating activities: | ||
Net cash provided by operating activities | 277 | 228 |
Investing activities: | ||
Capital expenditures | (36) | 27 |
Expenditures for cable and satellite television distribution rights | (3) | 0 |
Decreases in restricted cash | (1) | 1 |
Changes in other noncurrent assets | (1) | 0 |
Other investing activities | 0 | 0 |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (41) | 28 |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (5) | (8) |
Principal borrowings of debt from senior secured credit facility | 0 | 0 |
Proceeds from issuance of senior secured notes, net of original issue discount | 0 | |
Payment of debt origination fees | 0 | 0 |
Payment of bond premium fees | 0 | 0 |
Other financing activities | 0 | 0 |
Dividends paid to Liberty | 0 | 0 |
Dividends paid to noncontrolling interest | (20) | (25) |
Net short-term intercompany debt (repayments) borrowings | (1,340) | (166) |
Other intercompany financing activities | 1,137 | 89 |
Net cash (used in) provided by financing activities | (228) | (110) |
Effect of foreign exchange rate changes on cash and cash equivalents | (4) | (32) |
Net increase in cash and cash equivalents | 4 | 114 |
Cash and cash equivalents, beginning of period | 222 | 246 |
Cash and cash equivalents, end of period | 226 | 360 |
Eliminations | ||
Operating activities: | ||
Net cash provided by operating activities | 0 | 0 |
Investing activities: | ||
Capital expenditures | 0 | (20) |
Expenditures for cable and satellite television distribution rights | 0 | 0 |
Decreases in restricted cash | 0 | 0 |
Changes in other noncurrent assets | 0 | 0 |
Other investing activities | 0 | 0 |
Intercompany investing activities | (721) | (336) |
Net cash used in investing activities | (721) | (356) |
Financing activities: | ||
Principal payments of debt and capital lease obligations | 0 | 0 |
Principal borrowings of debt from senior secured credit facility | 0 | 0 |
Proceeds from issuance of senior secured notes, net of original issue discount | 0 | |
Payment of debt origination fees | 0 | 0 |
Payment of bond premium fees | 0 | 0 |
Other financing activities | 0 | 0 |
Dividends paid to Liberty | 0 | 0 |
Dividends paid to noncontrolling interest | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | 0 | 0 |
Other intercompany financing activities | 721 | 356 |
Net cash (used in) provided by financing activities | 721 | 356 |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | $ 0 | $ 0 |