Document and Entity Information
Document and Entity Information Document | 9 Months Ended |
Sep. 30, 2017shares | |
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, 2017 |
Document Fiscal Year Focus | 2,017 |
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, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 343 | $ 284 |
Restricted cash | 11 | 10 |
Accounts receivable, less allowance for doubtful accounts of $84 at September 30, 2017 and $97 at December 31, 2016 | 888 | 1,246 |
Inventories | 1,164 | 950 |
Prepaid expenses and other current assets | 55 | 46 |
Total current assets | 2,461 | 2,536 |
Noncurrent assets: | ||
Property and equipment, net of accumulated depreciation of $1,161 at September 30, 2017 and $1,004 at December 31, 2016 | 998 | 1,031 |
Television distribution rights, net | 78 | 183 |
Goodwill | 5,066 | 4,995 |
Other intangible assets, net | 2,599 | 2,738 |
Other noncurrent assets | 61 | 62 |
Total assets | 11,263 | 11,545 |
Current liabilities: | ||
Current portion of debt and capital lease obligations | 17 | 14 |
Accounts payable-trade | 726 | 678 |
Accrued liabilities | 630 | 769 |
Total current liabilities | 1,373 | 1,461 |
Noncurrent liabilities: | ||
Long-term portion of debt and capital lease obligations | 5,073 | 5,275 |
Deferred income taxes | 730 | 778 |
Other long-term liabilities | 127 | 136 |
Total liabilities | 7,303 | 7,650 |
QVC, Inc. stockholder's equity: | ||
Common stock, $0.01 par value, 1 authorized share | 0 | 0 |
Additional paid-in capital | 6,867 | 6,851 |
Accumulated deficit | (2,904) | (2,832) |
Accumulated other comprehensive loss | (118) | (224) |
Total QVC, Inc. stockholder's equity | 3,845 | 3,795 |
Noncontrolling interest | 115 | 100 |
Total equity | 3,960 | 3,895 |
Total liabilities and equity | $ 11,263 | $ 11,545 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 84 | $ 97 |
Accumulated depreciation | $ 1,161 | $ 1,004 |
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net revenue | $ 2,010 | $ 1,948 | $ 5,954 | $ 6,024 |
Cost of goods sold | 1,282 | 1,251 | 3,755 | 3,816 |
Gross profit | 728 | 697 | 2,199 | 2,208 |
Operating expenses: | ||||
Operating | 145 | 140 | 419 | 428 |
Selling, general and administrative, including stock-based compensation | 180 | 172 | 489 | 533 |
Depreciation | 38 | 38 | 116 | 103 |
Amortization | 91 | 116 | 324 | 345 |
Operating expenses | 454 | 466 | 1,348 | 1,409 |
Operating income | 274 | 231 | 851 | 799 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | (2) | (3) | (4) |
Interest expense, net | (54) | (52) | (165) | (159) |
Foreign currency gain (loss) | 4 | 5 | (6) | 27 |
Nonoperating expense | (50) | (49) | (174) | (136) |
Income before income taxes | 224 | 182 | 677 | 663 |
Income tax expense | (58) | (66) | (225) | (244) |
Net income | 166 | 116 | 452 | 419 |
Less net income attributable to the noncontrolling interest | (12) | (9) | (33) | (28) |
Net income attributable to QVC, Inc. stockholder | $ 154 | $ 107 | $ 419 | $ 391 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 166 | $ 116 | $ 452 | $ 419 |
Foreign currency translation adjustments, net of tax | 28 | (3) | 110 | 36 |
Total comprehensive income | 194 | 113 | 562 | 455 |
Comprehensive income attributable to noncontrolling interest | (12) | (11) | (37) | (46) |
Comprehensive income attributable to QVC, Inc. stockholder | $ 182 | $ 102 | $ 525 | $ 409 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 452 | $ 419 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in losses of investee | 3 | 4 |
Deferred income taxes | (73) | (68) |
Foreign currency loss (gain) | 6 | (27) |
Depreciation | 116 | 103 |
Amortization | 324 | 345 |
Change in fair value of financial instruments and noncash interest | 5 | 5 |
Stock-based compensation | 23 | 24 |
Change in other long-term liabilities | (7) | 0 |
Effects of changes in working capital items | 58 | 44 |
Net cash provided by operating activities | 907 | 849 |
Investing activities: | ||
Capital expenditures | (83) | (140) |
Expenditures for television distribution rights | (35) | (8) |
Changes in other noncurrent assets | (2) | (2) |
Other investing activities | 0 | (3) |
Net cash used in investing activities | (120) | (153) |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (1,791) | (1,300) |
Principal borrowings of debt from senior secured credit facility | 1,574 | 1,048 |
Payment of debt origination fees | 0 | (2) |
Dividends paid to Liberty Interactive Corporation | (491) | (427) |
Dividends paid to noncontrolling interest | (22) | (21) |
Other financing activities | (10) | (9) |
Net cash used in financing activities | (740) | (711) |
Effect of foreign exchange rate changes on cash and cash equivalents | 12 | 7 |
Net increase (decrease) in cash and cash equivalents | 59 | (8) |
Cash and cash equivalents, beginning of period | 284 | 327 |
Cash and cash equivalents, end of period | 343 | 319 |
Effects of changes in working capital items: | ||
Decrease in accounts receivable | 369 | 583 |
Increase in inventories | (191) | (192) |
Increase in prepaid expenses and other current assets | (4) | (14) |
Increase (decrease) in accounts payable-trade | 20 | (40) |
Decrease in accrued liabilities and other | (136) | (293) |
Effects of changes in working capital items | $ 58 | $ 44 |
Consolidated Statement of Equit
Consolidated Statement of Equity - 9 months ended Sep. 30, 2017 - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Noncontrolling interest |
Balance, December 31, 2016 at Dec. 31, 2016 | $ 3,895 | $ 0 | $ 6,851 | $ (2,832) | $ (224) | $ 100 |
Balance beginning (in shares) at Dec. 31, 2016 | 1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 452 | 0 | 419 | 0 | 33 | |
Foreign currency translation adjustments, net of tax | 110 | 0 | 0 | 106 | 4 | |
Dividends paid to Liberty Interactive Corporation and noncontrolling interest and other | (513) | 0 | (491) | 0 | (22) | |
Impact of tax liability allocation and indemnification agreement with Liberty Interactive Corporation | 3 | 3 | 0 | 0 | 0 | |
Withholding taxes on net share settlements of stock-based compensation | (10) | (10) | 0 | 0 | 0 | |
Stock-based compensation | 23 | 23 | 0 | 0 | 0 | |
Balance, September 30, 2017 at Sep. 30, 2017 | $ 3,960 | $ 0 | $ 6,867 | $ (2,904) | $ (118) | $ 115 |
Balance ending (in shares) at Sep. 30, 2017 | 1 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation [Abstract] | |
Basis of presentation | Basis of Presentation QVC, Inc. and its consolidated subsidiaries ("QVC" or the "Company") 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 ("U.S."), QVC's televised shopping programs, including live and recorded content, are broadcast across multiple channels nationally on a full-time basis, including QVC, QVC2 (f/k/a QVC Plus) and Beauty iQ. The Company's U.S. programming is also available on QVC.com, QVC's U.S. website; mobile applications via streaming video; over-the-air broadcasters; and over-the-top content platforms (Roku, Apple TV, etc.). QVC believes that the Company's digital platforms complement the Company's televised shopping programs by allowing consumers to purchase a wide assortment of goods offered on QVC's televised programs, as well as other products that are available only on the Company's digital platforms. The Company views e-commerce as a natural extension of the Company's business, allowing the Company to stream live video and offer on-demand video segments of items recently presented live on QVC's televised programs. The Company's digital platforms allow shoppers to browse, research, compare and perform targeted searches for products, control the order-entry process and conveniently access their QVC account. QVC's international televised shopping programs, including live and recorded content, are distributed to households outside of the U.S., primarily in Germany, Austria, Japan, the United Kingdom ("U.K."), the Republic of Ireland, Italy and France. In some of the countries where QVC operates, QVC's televised shopping programs are broadcast across multiple QVC channels: QVC Beauty & Style and QVC Plus in Germany and QVC Beauty, QVC Extra, QVC Style and QVC +1 in the U.K. The programming created for most of these markets is also available via streaming video on QVC's digital platforms. QVC's international business employs product sourcing teams who select products tailored to the interests of each local market. The Company's Japanese operations ("QVC-Japan") 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, 2017 and 2016 , QVC-Japan paid dividends to Mitsui of $22 million and $21 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. 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. The Company is an indirect wholly-owned subsidiary of Liberty Interactive Corporation ("Liberty") , which owns interests in a broad range of digital commerce businesses, and is attributed to Liberty's QVC Group. The QVC Group common stock (Nasdaq: QVCA and QVCB) tracks the assets and liabilities of the QVC Group. The QVC Group tracks the Company, zulily, llc ("zulily") and Liberty's 38% equity interest in HSN, Inc. ("HSN"), one of the Company's two closest televised shopping competitors, cash and certain liabilities. On July 6, 2017, Liberty announced plans to acquire the remaining interest in HSN, which would make it a wholly-owned subsidiary of Liberty following the closing. On April 4, 2017, Liberty entered into an agreement with General Communication, Inc. ("GCI"), an Alaska corporation, and Liberty Interactive LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Liberty, whereby Liberty will acquire GCI through a reorganization in which certain assets and liabilities attributed to Liberty’s Ventures Group will be contributed to GCI in exchange for a controlling interest in GCI. Liberty will then effect a tax-free separation of its controlling interest in the combined company, leaving QVC Group common stock as the only outstanding common stock of Liberty. Neither the proposed transactions involving GCI nor the acquisition of HSN is conditioned on the completion of the other, and no assurance can be given as to which of these transactions will be completed first. The QVC Group does not represent a separate legal entity; rather, it represents those businesses, assets and liabilities that are attributed to that group. On October 1, 2015, Liberty acquired all of the outstanding shares of zulily, inc. (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 for a limited time period. zulily is attributed to the QVC Group and the Company believes that its business is complementary to the Company. zulily is not part of the results of operations or financial position of QVC presented in these condensed consolidated financial statements. During each of the nine months ended September 30, 2017 and 2016 , QVC and zulily engaged in multiple transactions relating to sales, sourcing of merchandise, marketing initiatives, business advisory services and software development. The gross value of these transactions totaled approximately $7 million and $11 million , respectively, which did not have a material impact on QVC's financial position, results of operations, or liquidity. On June 23, 2016 , QVC amended and restated its senior secured credit facility (the " Third Amended and Restated Credit Agreement ") increasing the revolving credit facility from $2.25 billion to $2.65 billion as explained further in note 6. The Third Amended and Restated Credit Agreement includes a $400 million tranche that may be borrowed by QVC or zulily. Under the terms of the Third Amended and Restated Credit Agreement , QVC and zulily are jointly and severally liable for all amounts borrowed on the $400 million tranche. In accordance with the accounting guidance for obligations resulting from joint and several liability arrangements, QVC will record a liability for amounts it has borrowed under the credit facility plus any additional amount it expects to repay on behalf of zulily. As of September 30, 2017 , there was $300 million borrowed by zulily on the $400 million tranche of the Third Amended and Restated Credit Agreement , none of which the Company expects to repay on behalf of zulily. The condensed consolidated financial statements include the accounts of QVC, Inc. 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, 2016 , 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 ("U.S. 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, 2016 . 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 (the "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. This new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing , which clarifies the identification of performance obligations and the implementation guidance for licensing, and in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients , which clarifies assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The updated guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a full retrospective or modified retrospective transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and early adoption is permitted only for fiscal years beginning after December 15, 2016. The Company has reviewed the applicable ASU and has selected the modified retrospective transition method. In addition, the Company expects to elect the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component when its payment terms are less than one year, as well as the practical expedient to exclude from the measurement of the transaction price sales and similar taxes collected from customers. To date, the Company has concluded it will recognize revenue at the time of shipment to its customers consistent with when title passes. This is a change from the current practice whereby the Company recognizes revenue at the time of delivery to the customers and deferred revenue is recorded to account for the shipments in-transit. At the current time, the Company is continuing to evaluate the impact of the standard including its determination of whether the Company acts as principal or agent in certain vendor arrangements. The Company is also evaluating the impact of the standard on the presentation and timing of credit card income for its QVC-branded credit card and its financial statement disclosures, among other areas. The Company has not quantified the effects of this pronouncement, but it is working through the relevant aspects to evaluate the quantitative effects of the new guidance. The Company plans to be able to quantify the effects of these ASU's no later than the fourth quarter of 2017 in its annual report for the year ending December 31, 2017. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which 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 Company adopted this guidance as of January 1, 2017, and there was no significant effect of the standard on its financial reporting. In January 2016, the FASB issued ASU No. 2016-01, Financial Statements - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which requires equity investments with readily determinable fair values (except those accounted for under the equity method of accounting or those that result in consolidation) to be measured at fair value with changes in fair value recognized in net income and simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company’s ongoing financial reporting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which revises the accounting treatment related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for the Company beginning on January 1, 2019 and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its ongoing financial reporting. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) : Improvements to Employee Share-Based Payment Accounting , which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this guidance in the third quarter of 2016. In accordance with the new guidance, excess tax benefits and tax deficiencies are recognized as income tax benefit or expense rather than as additional paid-in capital. The Company has elected to recognize forfeitures as they occur rather than continue to estimate expected forfeitures. In addition, pursuant to the new guidance, excess tax benefits are classified as an operating activity on the condensed consolidated statements of cash flows. The recognition of excess tax benefits and deficiencies are applied prospectively from January 1, 2016. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) : Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues to reduce the diversity in practice for appropriate classification on the statement of cash flows. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which requires an entity to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its condensed consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the measurement for impairment by calculating the difference between the carrying amount and the fair value of the reporting unit. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , to provide clarity to which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. |
Television Distribution Rights,
Television Distribution Rights, Net | 9 Months Ended |
Sep. 30, 2017 | |
Television Distribution Rights [Abstract] | |
Television Distribution Rights, Net | Television Distribution Rights, Net Television distribution rights consisted of the following: (in millions) September 30, 2017 December 31, 2016 Television distribution rights $ 2,348 2,279 Less accumulated amortization (2,270 ) (2,096 ) Television distribution rights, net $ 78 183 The Company recorded amortization expense of $39 million and $47 million for the three months ended September 30, 2017 and 2016 , respectively, related to television distribution rights. For the nine months ended September 30, 2017 and 2016 , amortization expense for television distribution rights was $141 million and $143 million , respectively.As of September 30, 2017 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2017 $ 11 2018 37 2019 16 2020 10 2021 3 |
Goodwill (Notes)
Goodwill (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill disclosure | Goodwill The changes in the carrying amount of goodwill for the nine months ended September 30, 2017 were as follows: (in millions) QVC-U.S. QVC-Germany QVC-Japan QVC-U.K. QVC-Italy Total Balance as of December 31, 2016 $ 4,190 267 258 161 119 4,995 Exchange rate fluctuations — 33 11 13 14 71 Balance as of September 30, 2017 $ 4,190 300 269 174 133 5,066 |
Other Intangible Assets, Net
Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2017 | |
Other Intangible Assets [Abstract] | |
Intangible assets disclosure | Other Intangible Assets, Net Other intangible assets consisted of the following: September 30, 2017 December 31, 2016 (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 696 (541 ) 155 646 (466 ) 180 Affiliate and customer relationships 2,416 (2,406 ) 10 2,397 (2,274 ) 123 Debt origination fees 8 (2 ) 6 8 (1 ) 7 Trademarks (indefinite life) 2,428 — 2,428 2,428 — 2,428 $ 5,548 (2,949 ) 2,599 5,479 (2,741 ) 2,738 The Company recorded amortization expense of $52 million and $69 million for the three months ended September 30, 2017 and 2016 , respectively, related to other intangible assets. For the nine months ended September 30, 2017 and 2016 , amortization expense for other intangible assets was $183 million and $202 million , respectively. As of September 30, 2017 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2017 $ 25 2018 83 2019 47 2020 15 2021 1 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities [Abstract] | |
Accrued liabilities | Accrued Liabilities Accrued liabilities consisted of the following: (in millions) September 30, 2017 December 31, 2016 Accounts payable non-trade $ 193 215 Accrued compensation and benefits 116 92 Allowance for sales returns 73 93 Deferred revenue 63 69 Sales and other taxes 50 62 Income taxes 40 120 Accrued interest 37 58 Other 58 60 $ 630 769 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt disclosure | Long-Term Debt and Capital Lease Obligations Long-term debt and capital lease obligations consisted of the following: (in millions) September 30, 2017 December 31, 2016 3.125% Senior Secured Notes due 2019, net of original issue discount $ 399 399 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 1,390 1,596 Capital lease obligations 74 69 Build to suit lease obligation 102 105 Less debt issuance costs, net (23 ) (28 ) Total debt and capital lease obligations 5,090 5,289 Less current portion (17 ) (14 ) Long-term portion of debt and capital lease obligations $ 5,073 5,275 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 QVC's senior secured credit facility. The interest on all of QVC's senior secured notes is payable semi-annually. Senior Secured Credit Facility On June 23, 2016, QVC entered into the Third Amended and Restated Credit Agreement with zulily as borrowers (collectively, the “Borrowers”), which is a multi-currency facility that provides for a $2.65 billion revolving credit facility with a $300 million sub-limit for standby letters of credit and $1.5 billion of uncommitted incremental revolving loan commitments or incremental term loans. The Third Amended and Restated Credit Agreement includes a $400 million tranche that may be borrowed by the Company or zulily with an additional $50 million sub-limit for standby letters of credit (see notes 1 and 13). The remaining $2.25 billion and any incremental loans may be borrowed only by the Company. Borrowings that are alternate base rate loans will bear interest at a per annum rate equal to the base rate plus a margin that varies between 0.25% and 0.75% depending on the Borrowers’ combined ratio of Consolidated Total Debt to Consolidated EBITDA for the most recent four fiscal quarter periods (the “Combined Consolidated Leverage Ratio”). Borrowings that are London Interbank Offered Rate ("LIBOR") loans will bear interest at a per annum rate equal to the applicable LIBOR rate plus a margin that varies between 1.25% and 1.75% depending on the Borrowers’ Combined Consolidated Leverage Ratio. Because the calculation of the Combined Consolidated Leverage Ratio was revised to include zulily, the effective interest rate margins, on the date that the Third Amended and Restated Credit Agreement was entered into, decreased from the interest rate margins under the previous bank credit facility. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed availability; provided that, if zulily ceases to be controlled by Liberty, all of its loans must be repaid and its letters of credit cash collateralized. The facility matures on June 23, 2021, except that $140 million of the $2.25 billion commitment available to QVC matures on March 9, 2020. Any amounts prepaid on the revolving facility may be reborrowed. Payment of loans may be accelerated following certain customary events of default. QVC had $950 million , including the remaining portion of the $400 million tranche that zulily may also borrow on, available under the terms of the Third Amended and Restated Credit Agreement at September 30, 2017 . The interest rate on the Third Amended and Restated Credit Agreement was 2.7% at September 30, 2017 . The purpose of the amendment was to, among other things, extend the maturity of the Company's senior secured credit facility, provide zulily the opportunity to borrow on the senior secured credit facility (see note 1), and lower the interest rate on borrowings. The payment and performance of the Borrowers’ obligations under the Third Amended and Restated Credit Agreement are guaranteed by each of QVC’s Material Domestic Subsidiaries (as defined in the Third Amended and Restated Credit Agreement). Further, the borrowings under the Third Amended and Restated Credit Agreement are secured, pari passu with QVC’s existing notes, by a pledge of all of the capital stock of QVC. The payment and performance of the Borrowers’ obligations with respect to the $400 million tranche available to both QVC and zulily are also guaranteed by each of zulily’s Material Domestic Subsidiaries (as defined in the Third Amended and Restated Credit Agreement ), if any, and are secured by a pledge of all of zulily’s equity interests. The Third Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on the Company and zulily and each of their respective 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 and the Borrowers’ Combined Consolidated Leverage Ratio. Interest Rate Swap Arrangements During the year ended December 31, 2016, QVC entered into a three-year interest rate swap arrangement with a notional amount of $125 million to mitigate the interest rate risk associated with interest payments related to its variable rate debt. The swap arrangement does not qualify as a cash flow hedge under U.S. GAAP. Accordingly, changes in the fair value of the swap are reflected in gain on financial instruments in the accompanying condensed consolidated statements of operations. At September 30, 2017 , the fair value of the swap instrument was in a net asset position of approximately $2 million which was included in other noncurrent assets. Other Debt Related Information QVC was in compliance with all of its debt covenants at September 30, 2017 . 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 and build to suit leases) prior to amortization of bond discounts and related debt issuance costs was 4.1% as of September 30, 2017 . |
Leases
Leases | 9 Months Ended |
Sep. 30, 2017 | |
Leases and Transponder Service Agreements [Abstract] | |
Leases of lessee disclosure | Leases Future minimum payments under noncancelable operating leases and capital transponder leases with initial terms of one year or more and the lease related to the Company's California distribution center (build to suit lease) at September 30, 2017 consisted of the following: (in millions) Capital Leases Operating leases Build to suit lease Remainder of 2017 $ 4 5 1 2018 16 18 6 2019 16 14 6 2020 13 11 6 2021 12 9 6 Thereafter 18 71 67 Total $ 79 128 92 The Company has entered into fourteen separate capital lease agreements with transponder and transmitter network 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 capital leases was $3 million for each of the three months ended September 30, 2017 and 2016 . For the nine months ended September 30, 2017 and 2016 , depreciation expense related to the capital leases was $9 million and $8 million , respectively. Total future minimum capital lease payments of $79 million include $5 million of imputed interest. The transponder service agreements for our U.S. transponders expire between 2019 and 2023 . The transponder and transmitter network service agreements for our international transponders expire between 2019 and 2027 . Expenses for operating leases, principally for data processing equipment, facilities, satellite uplink service agreements and the California distribution center land, amounted to $5 million and $6 million for the three months ended September 30, 2017 and 2016 , respectively. For the nine months ended September 30, 2017 and 2016 , expenses for operating leases were $17 million and $18 million , respectively. On July 2, 2015, QVC entered into a lease (the “Lease”) for a California distribution center. Pursuant to the Lease, the landlord built an approximately one million square foot rental building in Ontario, California (the “Premises”), and thereafter leased the Premises to QVC as its new California 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 per year, increasing to approximately $8 million per 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 purchase the Premises and related land from the landlord by entering into an amended and restated agreement at any time during the twenty-fifth or twenty-sixth months of the Lease's initial term, which will occur in June and July of 2018, with a $10 million initial payment and annual payments of $12 million over a term of 13 years . The Company concluded that it was 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, the Company recorded estimated project construction costs incurred by the landlord as a projects in progress asset and a corresponding long-term liability in Property and equipment, net and Other long-term liabilities, respectively, on its consolidated balance sheet. In addition, the Company paid for normal tenant improvements and certain structural improvements and recorded these amounts as part of the projects in progress asset. Upon completion of construction, the long-term liability was reclassified to debt. On August 29, 2016, the California distribution center officially opened. The Company evaluated whether the Lease met the criteria for "sale-leaseback" treatment under U.S. GAAP and concluded that it did not. Therefore, the Company treats the Lease as a financing obligation and lease payments are 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 is being depreciated over its estimated useful life of 20 years . Although the Company did not begin making monthly lease payments pursuant to the Lease until February 2017, the portion of the lease obligations allocated to the land has been treated for accounting purposes as an operating lease that commenced in 2015. If the Company does not exercise its right to purchase 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, 2017 | |
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 items that will be separately reported 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, 2017 , the Company recorded a tax provision of $58 million , which represented an effective tax rate of 25.9% . For the nine months ended September 30, 2017 , the Company recorded a tax provision of $225 million , which represented an effective tax rate of 33.2% . These rates differ from the U.S. federal income tax rate of 35.0% due primarily to the impact of discrete permanent differences related to foreign currency losses realized for tax purposes offset by 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, 2017 , the income tax returns of the Company, or one of its subsidiaries, were under examination in Germany for 2012 through 2014 and the U.K. for 2015. In addition, as of September 30, 2017, income tax returns of the Company, or one of its subsidiaries, were under examination in California, New York State, and Pennsylvania. 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. The amount of the tax-related balances due from Liberty at September 30, 2017 were $3 million . The amount of tax related balances due to Liberty at December 31, 2016 were $75 million . These amounts were included in accrued liabilities in the accompanying condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
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. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value disclosures | Financial Instruments and Fair Value Measurements 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, 2017 using (in millions) Total Quoted prices Significant other Significant Current assets: Cash equivalents $ 88 88 — — Noncurrent assets: Interest rate swap arrangements 2 — 2 — Long-term liabilities: Debt (note 6) 5,044 — 5,044 — Fair value measurements at December 31, 2016 using (in millions) Total Quoted prices Significant other observable inputs Significant unobservable Current assets: Cash equivalents $ 113 113 — — Noncurrent assets: Interest rate swap arrangements 2 — 2 — Long-term liabilities: Debt (note 6) 5,092 — 5,092 — 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. During the year ended December 31, 2016, QVC entered into a three-year interest rate swap arrangement with a notional amount of $125 million to mitigate the interest rate risk associated with interest payments related to its variable rate debt. The swap arrangement did not qualify as a cash flow hedge under U.S. GAAP. Accordingly, changes in the fair value of the swap are reflected in gain on financial instruments in the accompanying condensed consolidated statements of operations. At September 30, 2017 , the fair value of the swap instrument was in a net asset position of $2 million which is included in other noncurrent assets. |
Information about QVC's Operati
Information about QVC's Operating Segments | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment reporting disclosure | Information about QVC's Operating Segments The Company has identified two reportable operating segments: QVC-U.S. and QVC-International. Both 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. QVC's chief operating decision maker ("CODM") is QVC's Chief Executive Officer. QVC's CODM has ultimate responsibility for enterprise decisions. QVC's CODM determines, in particular, resource allocation for, and monitors performance of, the consolidated enterprise, QVC-U.S. and QVC-International. The segment managers have responsibility for operating decisions, allocating resources and assessing performance within their respective segments. QVC's CODM relies on internal management reporting that analyzes enterprise results and segment results to the Adjusted OIBDA level (see below). 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 the Company's 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, 2017 2016 2017 2016 (in millions) Net Adjusted Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 1,374 313 1,338 308 4,111 1,010 4,173 997 QVC-International 636 99 610 85 1,843 304 1,851 274 Consolidated QVC $ 2,010 412 1,948 393 5,954 1,314 6,024 1,271 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, 2017 2016 2017 2016 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 24 83 22 103 70 293 55 308 QVC-International 14 8 16 13 46 31 48 37 Consolidated QVC $ 38 91 38 116 116 324 103 345 September 30, 2017 December 31, 2016 (in millions) Total Capital Total Capital QVC-U.S. $ 9,107 63 9,595 152 QVC-International 2,156 20 1,950 27 Consolidated QVC $ 11,263 83 11,545 179 Long-lived assets, net of accumulated depreciation, by segment were as follows: (in millions) September 30, 2017 December 31, 2016 QVC-U.S. $ 552 594 QVC-International 446 437 Consolidated QVC $ 998 1,031 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) 2017 2016 2017 2016 Adjusted OIBDA $ 412 393 1,314 1,271 Stock-based compensation (9 ) (8 ) (23 ) (24 ) Depreciation and amortization (129 ) (154 ) (440 ) (448 ) Equity in losses of investee — (2 ) (3 ) (4 ) Interest expense, net (54 ) (52 ) (165 ) (159 ) Foreign currency gain (loss) 4 5 (6 ) 27 Income before income taxes $ 224 182 677 663 |
Other Comprehensive Income
Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2017 | |
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, net of taxes ("AOCL"), is summarized as follows: (in millions) Foreign currency translation adjustments AOCL Balance at January 1, 2017 $ (224 ) (224 ) Other comprehensive income attributable to QVC, Inc. stockholder 106 106 Balance at September 30, 2017 (118 ) (118 ) Balance at January 1, 2016 $ (140 ) (140 ) Other comprehensive income attributable to QVC, Inc. stockholder 18 18 Balance at September 30, 2016 (122 ) (122 ) 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 (expense) benefit Net-of-tax amount Three months ended September 30, 2017 Foreign currency translation adjustments $ 33 (5 ) 28 Other comprehensive income 33 (5 ) 28 Three months ended September 30, 2016 Foreign currency translation adjustments $ (7 ) 4 (3 ) Other comprehensive loss (7 ) 4 (3 ) Nine months ended September 30, 2017: Foreign currency translation adjustments $ 135 (25 ) 110 Other comprehensive income 135 (25 ) 110 Nine months ended September 30, 2016: Foreign currency translation adjustments $ 23 13 36 Other comprehensive income 23 13 36 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event Subsequent to September 30, 2017 , QVC declared and paid dividends to Liberty in the amount of $300 million . As of November 9, 2017, zulily had $275 million outstanding on the shared tranche within the Third Amended and Restated Credit Agreement. |
Guarantor_Non-Guarantor Subsidi
Guarantor/Non-Guarantor Subsidiary Financial Information | 9 Months Ended |
Sep. 30, 2017 | |
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 Rocky Mount, Inc.; QVC San Antonio, LLC; QVC Global Holdings I, Inc.; and QVC Global Holdings II, Inc.) and the combined non-guarantor subsidiaries pursuant to Rule 3-10 of Regulation S-X. In connection with the Third Amended and Restated Credit Agreement (see notes 1 and 6), QVC International Ltd is no longer a guarantor subsidiary, and is reflected with the combined non-guarantor subsidiaries. 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. 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. 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, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 3 50 290 — 343 Restricted cash 8 — 3 — 11 Accounts receivable, net 628 — 260 — 888 Inventories 868 — 296 — 1,164 Prepaid expenses and other current assets 26 1 28 — 55 Total current assets 1,533 51 877 — 2,461 Property and equipment, net 286 59 653 — 998 Television distribution rights, net — 78 — — 78 Goodwill 4,190 — 876 — 5,066 Other intangible assets, net 534 2,048 17 — 2,599 Other noncurrent assets 15 — 46 — 61 Investments in subsidiaries 3,190 64 — (3,254 ) — Total assets $ 9,748 2,300 2,469 (3,254 ) 11,263 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 14 — 17 Accounts payable-trade 458 — 268 — 726 Accrued liabilities 70 157 403 — 630 Intercompany accounts payable (receivable) 270 (1,434 ) 1,164 — — Total current liabilities 801 (1,277 ) 1,849 — 1,373 Long-term portion of debt and capital lease obligations 4,927 — 146 — 5,073 Deferred income taxes 73 718 (61 ) — 730 Other long-term liabilities 102 — 25 — 127 Total liabilities 5,903 (559 ) 1,959 — 7,303 Equity: QVC, Inc. stockholder's equity 3,845 2,859 395 (3,254 ) 3,845 Noncontrolling interest — — 115 — 115 Total equity 3,845 2,859 510 (3,254 ) 3,960 Total liabilities and equity $ 9,748 2,300 2,469 (3,254 ) 11,263 Condensed Consolidating Balance Sheets December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 97 185 — 284 Restricted cash 8 — 2 — 10 Accounts receivable, net 958 — 288 — 1,246 Inventories 726 — 224 — 950 Prepaid expenses and other current assets 22 — 24 — 46 Total current assets 1,716 97 723 — 2,536 Property and equipment, net 317 63 651 — 1,031 Television distribution rights, net — 167 16 — 183 Goodwill 4,190 — 805 — 4,995 Other intangible assets, net 666 2,049 23 — 2,738 Other noncurrent assets 15 — 47 — 62 Investments in subsidiaries 3,389 1,030 — (4,419 ) — Total assets $ 10,293 3,406 2,265 (4,419 ) 11,545 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 11 — 14 Accounts payable-trade 425 — 253 — 678 Accrued liabilities 74 234 461 — 769 Intercompany accounts payable (receivable) 623 (246 ) (377 ) — — Total current liabilities 1,125 (12 ) 348 — 1,461 Long-term portion of debt and capital lease obligations 5,132 — 143 — 5,275 Deferred income taxes 145 707 (74 ) — 778 Other long-term liabilities 96 — 40 — 136 Total liabilities 6,498 695 457 — 7,650 Equity: QVC, Inc. stockholder's equity 3,795 2,711 1,708 (4,419 ) 3,795 Noncontrolling interest — — 100 — 100 Total equity 3,795 2,711 1,808 (4,419 ) 3,895 Total liabilities and equity $ 10,293 3,406 2,265 (4,419 ) 11,545 Condensed Consolidating Statements of Operations Three months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,419 234 688 (331 ) 2,010 Cost of goods sold 864 37 422 (41 ) 1,282 Gross profit 555 197 266 (290 ) 728 Operating expenses: Operating 106 64 70 (95 ) 145 Selling, general and administrative, including stock-based compensation 262 — 113 (195 ) 180 Depreciation 17 2 19 — 38 Amortization 47 35 9 — 91 432 101 211 (290 ) 454 Operating income 123 96 55 — 274 Other (expense) income: Interest expense, net (54 ) — — — (54 ) Foreign currency (loss) gain (1 ) 1 4 — 4 Intercompany interest (expense) income (1 ) 23 (22 ) — — (56 ) 24 (18 ) — (50 ) Income before income taxes 67 120 37 — 224 Income tax expense (13 ) (24 ) (21 ) — (58 ) Equity in earnings of subsidiaries, net of tax 112 19 — (131 ) — Net income 166 115 16 (131 ) 166 Less net income attributable to the noncontrolling interest (12 ) — (12 ) 12 (12 ) Net income attributable to QVC, Inc. stockholder $ 154 115 4 (119 ) 154 Condensed Consolidating Statements of Operations Three months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,369 224 662 (307 ) 1,948 Cost of goods sold 847 38 416 (50 ) 1,251 Gross profit 522 186 246 (257 ) 697 Operating expenses: Operating 94 61 64 (79 ) 140 Selling, general and administrative, including stock-based compensation 246 — 104 (178 ) 172 Depreciation 16 1 21 — 38 Amortization 62 41 13 — 116 418 103 202 (257 ) 466 Operating income 104 83 44 — 231 Other (expense) income: Equity in losses of investee — — (2 ) — (2 ) Interest expense, net (52 ) — — — (52 ) Foreign currency gain 3 — 2 — 5 (49 ) — — — (49 ) Income before income taxes 55 83 44 — 182 Income tax expense (13 ) (26 ) (27 ) — (66 ) Equity in earnings of subsidiaries, net of tax 74 24 — (98 ) — Net income 116 81 17 (98 ) 116 Less net income attributable to the noncontrolling interest (9 ) — (9 ) 9 (9 ) Net income attributable to QVC, Inc. stockholder $ 107 81 8 (89 ) 107 Condensed Consolidating Statements of Operations Nine months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,225 679 1,992 (942 ) 5,954 Cost of goods sold 2,557 106 1,210 (118 ) 3,755 Gross profit 1,668 573 782 (824 ) 2,199 Operating expenses: Operating 301 182 204 (268 ) 419 Selling, general and administrative, including stock-based compensation 743 — 302 (556 ) 489 Depreciation 50 6 60 — 116 Amortization 167 125 32 — 324 1,261 313 598 (824 ) 1,348 Operating income 407 260 184 — 851 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Interest expense, net (163 ) — (2 ) — (165 ) Foreign currency (loss) gain (4 ) 1 (3 ) — (6 ) Intercompany interest (expense) income (3 ) 68 (65 ) — — (170 ) 69 (73 ) — (174 ) Income before income taxes 237 329 111 — 677 Income tax expense (84 ) (86 ) (55 ) — (225 ) Equity in earnings of subsidiaries, net of tax 299 34 — (333 ) — Net income 452 277 56 (333 ) 452 Less net income attributable to the noncontrolling interest (33 ) — (33 ) 33 (33 ) Net income attributable to QVC, Inc. stockholder $ 419 277 23 (300 ) 419 Condensed Consolidating Statements of Operations Nine months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,272 688 2,009 (945 ) 6,024 Cost of goods sold 2,594 116 1,245 (139 ) 3,816 Gross profit 1,678 572 764 (806 ) 2,208 Operating expenses: Operating 296 180 204 (252 ) 428 Selling, general and administrative, including stock-based compensation 773 — 314 (554 ) 533 Depreciation 41 5 57 — 103 Amortization 182 125 38 — 345 1,292 310 613 (806 ) 1,409 Operating income 386 262 151 — 799 Other (expense) income: Equity in losses of investee — — (4 ) — (4 ) Interest expense, net (159 ) — — — (159 ) Foreign currency gain 12 — 15 — 27 Intercompany interest (expense) income (1 ) 1 — — — (148 ) 1 11 — (136 ) Income before income taxes 238 263 162 — 663 Income tax expense (75 ) (85 ) (84 ) — (244 ) Equity in earnings of subsidiaries, net of tax 256 106 — (362 ) — Net income 419 284 78 (362 ) 419 Less net income attributable to the noncontrolling interest (28 ) — (28 ) 28 (28 ) Net income attributable to QVC, Inc. stockholder $ 391 284 50 (334 ) 391 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 166 115 16 (131 ) 166 Foreign currency translation adjustments, net of tax 28 — 28 (28 ) 28 Total comprehensive income 194 115 44 (159 ) 194 Comprehensive income attributable to noncontrolling interest (12 ) — (12 ) 12 (12 ) Comprehensive income attributable to QVC, Inc. stockholder $ 182 115 32 (147 ) 182 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 116 81 17 (98 ) 116 Foreign currency translation adjustments, net of tax (3 ) — (3 ) 3 (3 ) Total comprehensive income 113 81 14 (95 ) 113 Comprehensive income attributable to noncontrolling interest (11 ) — (11 ) 11 (11 ) Comprehensive income attributable to QVC, Inc. stockholder $ 102 81 3 (84 ) 102 Condensed Consolidating Statements of Comprehensive Income Nine months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 452 277 56 (333 ) 452 Foreign currency translation adjustments, net of tax 110 — 110 (110 ) 110 Total comprehensive income 562 277 166 (443 ) 562 Comprehensive income attributable to noncontrolling interest (37 ) — (37 ) 37 (37 ) Comprehensive income attributable to QVC, Inc. stockholder $ 525 277 129 (406 ) 525 Condensed Consolidating Statements of Comprehensive Income Nine months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 419 284 78 (362 ) 419 Foreign currency translation adjustments, net of tax 36 — 36 (36 ) 36 Total comprehensive income 455 284 114 (398 ) 455 Comprehensive income attributable to noncontrolling interest (46 ) — (46 ) 46 (46 ) Comprehensive income attributable to QVC, Inc. stockholder $ 409 284 68 (352 ) 409 Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 550 306 51 — 907 Investing activities: Capital expenditures (54 ) (2 ) (27 ) — (83 ) Expenditures for television distribution rights — (35 ) — — (35 ) Changes in other noncurrent assets (1 ) — (1 ) — (2 ) Intercompany investing activities 385 (1,087 ) — 702 — Net cash provided by (used in) investing activities 330 (1,124 ) (28 ) 702 (120 ) Financing activities: Principal payments of debt and capital lease obligations (1,785 ) — (6 ) — (1,791 ) Principal borrowings of debt from senior secured credit facility 1,574 — — — 1,574 Dividends paid to Liberty Interactive Corporation (491 ) — — — (491 ) Dividends paid to noncontrolling interest — — (22 ) — (22 ) Other financing activities (10 ) — — — (10 ) Net short-term intercompany debt (repayments) borrowings (353 ) (1,188 ) 1,541 — — Other intercompany financing activities 186 1,959 (1,443 ) (702 ) — Net cash (used in) provided by financing activities (879 ) 771 70 (702 ) (740 ) Effect of foreign exchange rate changes on cash and cash equivalents — — 12 — 12 Net increase (decrease) in cash and cash equivalents 1 (47 ) 105 — 59 Cash and cash equivalents, beginning of period 2 97 185 — 284 Cash and cash equivalents, end of period $ 3 50 290 — 343 Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 586 256 7 — 849 Investing activities: Capital expenditures (113 ) (3 ) (24 ) — (140 ) Expenditures for television distribution rights — (8 ) — — (8 ) Changes in other noncurrent assets 6 — (8 ) — (2 ) Other investing activities (12 ) — 9 — (3 ) Intercompany investing activities 432 137 — (569 ) — Net cash provided by (used in) investing activities 313 126 (23 ) (569 ) (153 ) Financing activities: Principal payments of debt and capital lease obligations (1,295 ) — (5 ) — (1,300 ) Principal borrowings of debt from senior secured credit facility 1,048 — — — 1,048 Payment of debt origination fees (2 ) — — — (2 ) Dividends paid to Liberty Interactive Corporation (427 ) — — — (427 ) Dividends paid to noncontrolling interest — — (21 ) — (21 ) Other financing activities (9 ) — — — (9 ) Net short-term intercompany debt (repayments) borrowings (83 ) (1,474 ) 1,557 — — Other intercompany financing activities (129 ) 1,079 (1,519 ) 569 — Net cash (used in) provided by financing activities (897 ) (395 ) 12 569 (711 ) Effect of foreign exchange rate changes on cash and cash equivalents — — 7 — 7 Net increase (decrease) in cash and cash equivalents 2 (13 ) 3 — (8 ) Cash and cash equivalents, beginning of period — 112 215 — 327 Cash and cash equivalents, end of period $ 2 99 218 — 319 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation [Abstract] | |
New accounting pronouncements policy | On May 28, 2014, the Financial Accounting Standards Board (the "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. This new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing , which clarifies the identification of performance obligations and the implementation guidance for licensing, and in May 2016, the FASB issued ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients , which clarifies assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The updated guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either a full retrospective or modified retrospective transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and early adoption is permitted only for fiscal years beginning after December 15, 2016. The Company has reviewed the applicable ASU and has selected the modified retrospective transition method. In addition, the Company expects to elect the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component when its payment terms are less than one year, as well as the practical expedient to exclude from the measurement of the transaction price sales and similar taxes collected from customers. To date, the Company has concluded it will recognize revenue at the time of shipment to its customers consistent with when title passes. This is a change from the current practice whereby the Company recognizes revenue at the time of delivery to the customers and deferred revenue is recorded to account for the shipments in-transit. At the current time, the Company is continuing to evaluate the impact of the standard including its determination of whether the Company acts as principal or agent in certain vendor arrangements. The Company is also evaluating the impact of the standard on the presentation and timing of credit card income for its QVC-branded credit card and its financial statement disclosures, among other areas. The Company has not quantified the effects of this pronouncement, but it is working through the relevant aspects to evaluate the quantitative effects of the new guidance. The Company plans to be able to quantify the effects of these ASU's no later than the fourth quarter of 2017 in its annual report for the year ending December 31, 2017. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory , which 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 Company adopted this guidance as of January 1, 2017, and there was no significant effect of the standard on its financial reporting. In January 2016, the FASB issued ASU No. 2016-01, Financial Statements - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which requires equity investments with readily determinable fair values (except those accounted for under the equity method of accounting or those that result in consolidation) to be measured at fair value with changes in fair value recognized in net income and simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. The new standard is effective for the Company for fiscal years and interim periods beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company’s ongoing financial reporting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which revises the accounting treatment related to lessee accounting. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases. The new lease guidance also simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The amendments in this ASU are effective for the Company beginning on January 1, 2019 and should be applied through a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its ongoing financial reporting. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) : Improvements to Employee Share-Based Payment Accounting , which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this guidance in the third quarter of 2016. In accordance with the new guidance, excess tax benefits and tax deficiencies are recognized as income tax benefit or expense rather than as additional paid-in capital. The Company has elected to recognize forfeitures as they occur rather than continue to estimate expected forfeitures. In addition, pursuant to the new guidance, excess tax benefits are classified as an operating activity on the condensed consolidated statements of cash flows. The recognition of excess tax benefits and deficiencies are applied prospectively from January 1, 2016. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) : Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues to reduce the diversity in practice for appropriate classification on the statement of cash flows. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which requires an entity to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its condensed consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the measurement for impairment by calculating the difference between the carrying amount and the fair value of the reporting unit. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , to provide clarity to which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 with early adoption permitted. The Company does not expect the adoption will have a material effect on its condensed consolidated financial statements. |
Television Distribution Right23
Television Distribution Rights, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Television Distribution Rights [Abstract] | |
Schedule of television distribution rights | Television distribution rights consisted of the following: (in millions) September 30, 2017 December 31, 2016 Television distribution rights $ 2,348 2,279 Less accumulated amortization (2,270 ) (2,096 ) Television distribution rights, net $ 78 183 |
Schedule of future amortization expense | As of September 30, 2017 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2017 $ 11 2018 37 2019 16 2020 10 2021 3 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The changes in the carrying amount of goodwill for the nine months ended September 30, 2017 were as follows: (in millions) QVC-U.S. QVC-Germany QVC-Japan QVC-U.K. QVC-Italy Total Balance as of December 31, 2016 $ 4,190 267 258 161 119 4,995 Exchange rate fluctuations — 33 11 13 14 71 Balance as of September 30, 2017 $ 4,190 300 269 174 133 5,066 |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Intangible Assets [Abstract] | |
Schedule of acquired intangible assets by class | Other intangible assets consisted of the following: September 30, 2017 December 31, 2016 (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 696 (541 ) 155 646 (466 ) 180 Affiliate and customer relationships 2,416 (2,406 ) 10 2,397 (2,274 ) 123 Debt origination fees 8 (2 ) 6 8 (1 ) 7 Trademarks (indefinite life) 2,428 — 2,428 2,428 — 2,428 $ 5,548 (2,949 ) 2,599 5,479 (2,741 ) 2,738 |
Schedule of finite-lived intangible assets future amortization expense | As of September 30, 2017 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): Remainder of 2017 $ 25 2018 83 2019 47 2020 15 2021 1 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Liabilities [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following: (in millions) September 30, 2017 December 31, 2016 Accounts payable non-trade $ 193 215 Accrued compensation and benefits 116 92 Allowance for sales returns 73 93 Deferred revenue 63 69 Sales and other taxes 50 62 Income taxes 40 120 Accrued interest 37 58 Other 58 60 $ 630 769 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt and capital lease obligations consisted of the following: (in millions) September 30, 2017 December 31, 2016 3.125% Senior Secured Notes due 2019, net of original issue discount $ 399 399 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 1,390 1,596 Capital lease obligations 74 69 Build to suit lease obligation 102 105 Less debt issuance costs, net (23 ) (28 ) Total debt and capital lease obligations 5,090 5,289 Less current portion (17 ) (14 ) Long-term portion of debt and capital lease obligations $ 5,073 5,275 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 the Company's California distribution center (build to suit lease) at September 30, 2017 consisted of the following: (in millions) Capital Leases Operating leases Build to suit lease Remainder of 2017 $ 4 5 1 2018 16 18 6 2019 16 14 6 2020 13 11 6 2021 12 9 6 Thereafter 18 71 67 Total $ 79 128 92 |
Financial Instruments and Fai29
Financial Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 using (in millions) Total Quoted prices Significant other Significant Current assets: Cash equivalents $ 88 88 — — Noncurrent assets: Interest rate swap arrangements 2 — 2 — Long-term liabilities: Debt (note 6) 5,044 — 5,044 — Fair value measurements at December 31, 2016 using (in millions) Total Quoted prices Significant other observable inputs Significant unobservable Current assets: Cash equivalents $ 113 113 — — Noncurrent assets: Interest rate swap arrangements 2 — 2 — Long-term liabilities: Debt (note 6) 5,092 — 5,092 — |
Information about QVC's Opera30
Information about QVC's Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Adjusted OIBDA by Segment | Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 (in millions) Net Adjusted Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 1,374 313 1,338 308 4,111 1,010 4,173 997 QVC-International 636 99 610 85 1,843 304 1,851 274 Consolidated QVC $ 2,010 412 1,948 393 5,954 1,314 6,024 1,271 |
Schedule of Depreciation and Amortization by Segment | Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 24 83 22 103 70 293 55 308 QVC-International 14 8 16 13 46 31 48 37 Consolidated QVC $ 38 91 38 116 116 324 103 345 |
Schedule of Capital Expenditures and Total Assets by Segment | September 30, 2017 December 31, 2016 (in millions) Total Capital Total Capital QVC-U.S. $ 9,107 63 9,595 152 QVC-International 2,156 20 1,950 27 Consolidated QVC $ 11,263 83 11,545 179 |
Long-lived Assets by Geographic Areas (by Segment) | Long-lived assets, net of accumulated depreciation, by segment were as follows: (in millions) September 30, 2017 December 31, 2016 QVC-U.S. $ 552 594 QVC-International 446 437 Consolidated QVC $ 998 1,031 |
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) 2017 2016 2017 2016 Adjusted OIBDA $ 412 393 1,314 1,271 Stock-based compensation (9 ) (8 ) (23 ) (24 ) Depreciation and amortization (129 ) (154 ) (440 ) (448 ) Equity in losses of investee — (2 ) (3 ) (4 ) Interest expense, net (54 ) (52 ) (165 ) (159 ) Foreign currency gain (loss) 4 5 (6 ) 27 Income before income taxes $ 224 182 677 663 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, net of taxes ("AOCL"), is summarized as follows: (in millions) Foreign currency translation adjustments AOCL Balance at January 1, 2017 $ (224 ) (224 ) Other comprehensive income attributable to QVC, Inc. stockholder 106 106 Balance at September 30, 2017 (118 ) (118 ) Balance at January 1, 2016 $ (140 ) (140 ) Other comprehensive income attributable to QVC, Inc. stockholder 18 18 Balance at September 30, 2016 (122 ) (122 ) |
Schedule of Component of Comprehensive Income (Loss) | 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 (expense) benefit Net-of-tax amount Three months ended September 30, 2017 Foreign currency translation adjustments $ 33 (5 ) 28 Other comprehensive income 33 (5 ) 28 Three months ended September 30, 2016 Foreign currency translation adjustments $ (7 ) 4 (3 ) Other comprehensive loss (7 ) 4 (3 ) Nine months ended September 30, 2017: Foreign currency translation adjustments $ 135 (25 ) 110 Other comprehensive income 135 (25 ) 110 Nine months ended September 30, 2016: Foreign currency translation adjustments $ 23 13 36 Other comprehensive income 23 13 36 |
Guarantor_Non-Guarantor Subsi32
Guarantor/Non-Guarantor Subsidiary Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Current Period | Condensed Consolidating Balance Sheets September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 3 50 290 — 343 Restricted cash 8 — 3 — 11 Accounts receivable, net 628 — 260 — 888 Inventories 868 — 296 — 1,164 Prepaid expenses and other current assets 26 1 28 — 55 Total current assets 1,533 51 877 — 2,461 Property and equipment, net 286 59 653 — 998 Television distribution rights, net — 78 — — 78 Goodwill 4,190 — 876 — 5,066 Other intangible assets, net 534 2,048 17 — 2,599 Other noncurrent assets 15 — 46 — 61 Investments in subsidiaries 3,190 64 — (3,254 ) — Total assets $ 9,748 2,300 2,469 (3,254 ) 11,263 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 14 — 17 Accounts payable-trade 458 — 268 — 726 Accrued liabilities 70 157 403 — 630 Intercompany accounts payable (receivable) 270 (1,434 ) 1,164 — — Total current liabilities 801 (1,277 ) 1,849 — 1,373 Long-term portion of debt and capital lease obligations 4,927 — 146 — 5,073 Deferred income taxes 73 718 (61 ) — 730 Other long-term liabilities 102 — 25 — 127 Total liabilities 5,903 (559 ) 1,959 — 7,303 Equity: QVC, Inc. stockholder's equity 3,845 2,859 395 (3,254 ) 3,845 Noncontrolling interest — — 115 — 115 Total equity 3,845 2,859 510 (3,254 ) 3,960 Total liabilities and equity $ 9,748 2,300 2,469 (3,254 ) 11,263 |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Prior Period | Condensed Consolidating Balance Sheets December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 97 185 — 284 Restricted cash 8 — 2 — 10 Accounts receivable, net 958 — 288 — 1,246 Inventories 726 — 224 — 950 Prepaid expenses and other current assets 22 — 24 — 46 Total current assets 1,716 97 723 — 2,536 Property and equipment, net 317 63 651 — 1,031 Television distribution rights, net — 167 16 — 183 Goodwill 4,190 — 805 — 4,995 Other intangible assets, net 666 2,049 23 — 2,738 Other noncurrent assets 15 — 47 — 62 Investments in subsidiaries 3,389 1,030 — (4,419 ) — Total assets $ 10,293 3,406 2,265 (4,419 ) 11,545 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 11 — 14 Accounts payable-trade 425 — 253 — 678 Accrued liabilities 74 234 461 — 769 Intercompany accounts payable (receivable) 623 (246 ) (377 ) — — Total current liabilities 1,125 (12 ) 348 — 1,461 Long-term portion of debt and capital lease obligations 5,132 — 143 — 5,275 Deferred income taxes 145 707 (74 ) — 778 Other long-term liabilities 96 — 40 — 136 Total liabilities 6,498 695 457 — 7,650 Equity: QVC, Inc. stockholder's equity 3,795 2,711 1,708 (4,419 ) 3,795 Noncontrolling interest — — 100 — 100 Total equity 3,795 2,711 1,808 (4,419 ) 3,895 Total liabilities and equity $ 10,293 3,406 2,265 (4,419 ) 11,545 |
Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Current Period | Condensed Consolidating Statements of Operations Three months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,419 234 688 (331 ) 2,010 Cost of goods sold 864 37 422 (41 ) 1,282 Gross profit 555 197 266 (290 ) 728 Operating expenses: Operating 106 64 70 (95 ) 145 Selling, general and administrative, including stock-based compensation 262 — 113 (195 ) 180 Depreciation 17 2 19 — 38 Amortization 47 35 9 — 91 432 101 211 (290 ) 454 Operating income 123 96 55 — 274 Other (expense) income: Interest expense, net (54 ) — — — (54 ) Foreign currency (loss) gain (1 ) 1 4 — 4 Intercompany interest (expense) income (1 ) 23 (22 ) — — (56 ) 24 (18 ) — (50 ) Income before income taxes 67 120 37 — 224 Income tax expense (13 ) (24 ) (21 ) — (58 ) Equity in earnings of subsidiaries, net of tax 112 19 — (131 ) — Net income 166 115 16 (131 ) 166 Less net income attributable to the noncontrolling interest (12 ) — (12 ) 12 (12 ) Net income attributable to QVC, Inc. stockholder $ 154 115 4 (119 ) 154 Nine months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,225 679 1,992 (942 ) 5,954 Cost of goods sold 2,557 106 1,210 (118 ) 3,755 Gross profit 1,668 573 782 (824 ) 2,199 Operating expenses: Operating 301 182 204 (268 ) 419 Selling, general and administrative, including stock-based compensation 743 — 302 (556 ) 489 Depreciation 50 6 60 — 116 Amortization 167 125 32 — 324 1,261 313 598 (824 ) 1,348 Operating income 407 260 184 — 851 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Interest expense, net (163 ) — (2 ) — (165 ) Foreign currency (loss) gain (4 ) 1 (3 ) — (6 ) Intercompany interest (expense) income (3 ) 68 (65 ) — — (170 ) 69 (73 ) — (174 ) Income before income taxes 237 329 111 — 677 Income tax expense (84 ) (86 ) (55 ) — (225 ) Equity in earnings of subsidiaries, net of tax 299 34 — (333 ) — Net income 452 277 56 (333 ) 452 Less net income attributable to the noncontrolling interest (33 ) — (33 ) 33 (33 ) Net income attributable to QVC, Inc. stockholder $ 419 277 23 (300 ) 419 |
Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Prior Period | Condensed Consolidating Statements of Operations Three months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 1,369 224 662 (307 ) 1,948 Cost of goods sold 847 38 416 (50 ) 1,251 Gross profit 522 186 246 (257 ) 697 Operating expenses: Operating 94 61 64 (79 ) 140 Selling, general and administrative, including stock-based compensation 246 — 104 (178 ) 172 Depreciation 16 1 21 — 38 Amortization 62 41 13 — 116 418 103 202 (257 ) 466 Operating income 104 83 44 — 231 Other (expense) income: Equity in losses of investee — — (2 ) — (2 ) Interest expense, net (52 ) — — — (52 ) Foreign currency gain 3 — 2 — 5 (49 ) — — — (49 ) Income before income taxes 55 83 44 — 182 Income tax expense (13 ) (26 ) (27 ) — (66 ) Equity in earnings of subsidiaries, net of tax 74 24 — (98 ) — Net income 116 81 17 (98 ) 116 Less net income attributable to the noncontrolling interest (9 ) — (9 ) 9 (9 ) Net income attributable to QVC, Inc. stockholder $ 107 81 8 (89 ) 107 Nine months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 4,272 688 2,009 (945 ) 6,024 Cost of goods sold 2,594 116 1,245 (139 ) 3,816 Gross profit 1,678 572 764 (806 ) 2,208 Operating expenses: Operating 296 180 204 (252 ) 428 Selling, general and administrative, including stock-based compensation 773 — 314 (554 ) 533 Depreciation 41 5 57 — 103 Amortization 182 125 38 — 345 1,292 310 613 (806 ) 1,409 Operating income 386 262 151 — 799 Other (expense) income: Equity in losses of investee — — (4 ) — (4 ) Interest expense, net (159 ) — — — (159 ) Foreign currency gain 12 — 15 — 27 Intercompany interest (expense) income (1 ) 1 — — — (148 ) 1 11 — (136 ) Income before income taxes 238 263 162 — 663 Income tax expense (75 ) (85 ) (84 ) — (244 ) Equity in earnings of subsidiaries, net of tax 256 106 — (362 ) — Net income 419 284 78 (362 ) 419 Less net income attributable to the noncontrolling interest (28 ) — (28 ) 28 (28 ) Net income attributable to QVC, Inc. stockholder $ 391 284 50 (334 ) 391 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss) | Nine months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 452 277 56 (333 ) 452 Foreign currency translation adjustments, net of tax 110 — 110 (110 ) 110 Total comprehensive income 562 277 166 (443 ) 562 Comprehensive income attributable to noncontrolling interest (37 ) — (37 ) 37 (37 ) Comprehensive income attributable to QVC, Inc. stockholder $ 525 277 129 (406 ) 525 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 166 115 16 (131 ) 166 Foreign currency translation adjustments, net of tax 28 — 28 (28 ) 28 Total comprehensive income 194 115 44 (159 ) 194 Comprehensive income attributable to noncontrolling interest (12 ) — (12 ) 12 (12 ) Comprehensive income attributable to QVC, Inc. stockholder $ 182 115 32 (147 ) 182 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Prior Period | Nine months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 419 284 78 (362 ) 419 Foreign currency translation adjustments, net of tax 36 — 36 (36 ) 36 Total comprehensive income 455 284 114 (398 ) 455 Comprehensive income attributable to noncontrolling interest (46 ) — (46 ) 46 (46 ) Comprehensive income attributable to QVC, Inc. stockholder $ 409 284 68 (352 ) 409 Condensed Consolidating Statements of Comprehensive Income Three months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 116 81 17 (98 ) 116 Foreign currency translation adjustments, net of tax (3 ) — (3 ) 3 (3 ) Total comprehensive income 113 81 14 (95 ) 113 Comprehensive income attributable to noncontrolling interest (11 ) — (11 ) 11 (11 ) Comprehensive income attributable to QVC, Inc. stockholder $ 102 81 3 (84 ) 102 |
Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Current Period | Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 550 306 51 — 907 Investing activities: Capital expenditures (54 ) (2 ) (27 ) — (83 ) Expenditures for television distribution rights — (35 ) — — (35 ) Changes in other noncurrent assets (1 ) — (1 ) — (2 ) Intercompany investing activities 385 (1,087 ) — 702 — Net cash provided by (used in) investing activities 330 (1,124 ) (28 ) 702 (120 ) Financing activities: Principal payments of debt and capital lease obligations (1,785 ) — (6 ) — (1,791 ) Principal borrowings of debt from senior secured credit facility 1,574 — — — 1,574 Dividends paid to Liberty Interactive Corporation (491 ) — — — (491 ) Dividends paid to noncontrolling interest — — (22 ) — (22 ) Other financing activities (10 ) — — — (10 ) Net short-term intercompany debt (repayments) borrowings (353 ) (1,188 ) 1,541 — — Other intercompany financing activities 186 1,959 (1,443 ) (702 ) — Net cash (used in) provided by financing activities (879 ) 771 70 (702 ) (740 ) Effect of foreign exchange rate changes on cash and cash equivalents — — 12 — 12 Net increase (decrease) in cash and cash equivalents 1 (47 ) 105 — 59 Cash and cash equivalents, beginning of period 2 97 185 — 284 Cash and cash equivalents, end of period $ 3 50 290 — 343 |
Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Prior Period | Condensed Consolidating Statements of Cash Flows Nine months ended September 30, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 586 256 7 — 849 Investing activities: Capital expenditures (113 ) (3 ) (24 ) — (140 ) Expenditures for television distribution rights — (8 ) — — (8 ) Changes in other noncurrent assets 6 — (8 ) — (2 ) Other investing activities (12 ) — 9 — (3 ) Intercompany investing activities 432 137 — (569 ) — Net cash provided by (used in) investing activities 313 126 (23 ) (569 ) (153 ) Financing activities: Principal payments of debt and capital lease obligations (1,295 ) — (5 ) — (1,300 ) Principal borrowings of debt from senior secured credit facility 1,048 — — — 1,048 Payment of debt origination fees (2 ) — — — (2 ) Dividends paid to Liberty Interactive Corporation (427 ) — — — (427 ) Dividends paid to noncontrolling interest — — (21 ) — (21 ) Other financing activities (9 ) — — — (9 ) Net short-term intercompany debt (repayments) borrowings (83 ) (1,474 ) 1,557 — — Other intercompany financing activities (129 ) 1,079 (1,519 ) 569 — Net cash (used in) provided by financing activities (897 ) (395 ) 12 569 (711 ) Effect of foreign exchange rate changes on cash and cash equivalents — — 7 — 7 Net increase (decrease) in cash and cash equivalents 2 (13 ) 3 — (8 ) Cash and cash equivalents, beginning of period — 112 215 — 327 Cash and cash equivalents, end of period $ 2 99 218 — 319 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 23, 2016 | |
General business information | |||
Dividends paid to noncontrolling interest | $ 22,000,000 | $ 21,000,000 | |
Related party transaction, amounts of transaction | $ 7,000,000 | $ 11,000,000 | |
Line of credit facility, maximum borrowing capacity | $ 2,650,000,000 | ||
QVC-Japan | |||
General business information | |||
Investment owned, percent of net assets | 60.00% | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 40.00% | ||
CNR Home Shopping Co., Ltd. | |||
General business information | |||
Equity method investment, ownership percentage | 49.00% | ||
HSN, Inc. | |||
General business information | |||
Ownership percentage by parent | 38.00% | ||
Revolving Credit Facility | QVC | |||
General business information | |||
Line of credit facility, maximum borrowing capacity | 2,250,000,000 | ||
Revolving Credit Facility | Tranche One, Shared with Related Party | |||
General business information | |||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 | ||
Line of credit facility, fair value of amount outstanding | $ 300,000,000 |
Television Distribution Right34
Television Distribution Rights, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Television distribution rights, net | $ 78 | $ 78 | $ 183 | ||
Television distribution rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Television distribution rights | 2,348 | 2,348 | 2,279 | ||
Less accumulated amortization | (2,270) | (2,270) | (2,096) | ||
Television distribution rights, net | 78 | 78 | $ 183 | ||
Amortization | $ 39 | $ 47 | $ 141 | $ 143 |
Television Distribution Right35
Television Distribution Rights, Net (Future Amortization Expense) (Details) - Television distribution rights $ in Millions | Sep. 30, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | $ 11 |
2,018 | 37 |
2,019 | 16 |
2,020 | 10 |
2,021 | $ 3 |
Goodwill Goodwill (Details)
Goodwill Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Line Items] | |
Balance as of December 31, 2016 | $ 4,995 |
Exchange rate fluctuations | 71 |
Balance as of September 30, 2017 | 5,066 |
QVC-U.S. | |
Goodwill [Line Items] | |
Balance as of December 31, 2016 | 4,190 |
Exchange rate fluctuations | 0 |
Balance as of September 30, 2017 | 4,190 |
QVC-Germany | |
Goodwill [Line Items] | |
Balance as of December 31, 2016 | 267 |
Exchange rate fluctuations | 33 |
Balance as of September 30, 2017 | 300 |
QVC-Japan | |
Goodwill [Line Items] | |
Balance as of December 31, 2016 | 258 |
Exchange rate fluctuations | 11 |
Balance as of September 30, 2017 | 269 |
QVC-U.K. | |
Goodwill [Line Items] | |
Balance as of December 31, 2016 | 161 |
Exchange rate fluctuations | 13 |
Balance as of September 30, 2017 | 174 |
QVC-Italy | |
Goodwill [Line Items] | |
Balance as of December 31, 2016 | 119 |
Exchange rate fluctuations | 14 |
Balance as of September 30, 2017 | $ 133 |
Other Intangible Assets, Net (O
Other Intangible Assets, Net (Other Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Gross cost | |||||
Purchased and internally developed software | $ 696 | $ 696 | $ 646 | ||
Affiliate and customer relationships | 2,416 | 2,416 | 2,397 | ||
Debt origination fees | 8 | 8 | 8 | ||
Trademarks (indefinite life) | 2,428 | 2,428 | 2,428 | ||
Other intangible assets (excluding goodwill), gross | 5,548 | 5,548 | 5,479 | ||
Accumulated amortization | |||||
Purchased and internally developed software | (541) | (541) | (466) | ||
Affiliate and customer relationships | (2,406) | (2,406) | (2,274) | ||
Debt origination fees | (2) | (2) | (1) | ||
Other intangible assets (excluding goodwill), accumulated amortization | (2,949) | (2,949) | (2,741) | ||
Other intangible assets, net | |||||
Purchased and internally developed software | 155 | 155 | 180 | ||
Affiliate and customer relationships | 10 | 10 | 123 | ||
Debt origination fees | 6 | 6 | 7 | ||
Other intangible assets (excluding goodwill), net | 2,599 | 2,599 | $ 2,738 | ||
Amortization of other intangible assets | $ 52 | $ 69 | $ 183 | $ 202 |
Other Intangible Assets, Net (F
Other Intangible Assets, Net (Future Amortization Expense) (Details) - Other Intangible Assets [Member] $ in Millions | Sep. 30, 2017USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2017 | $ 25 |
2,018 | 83 |
2,019 | 47 |
2,020 | 15 |
2,021 | $ 1 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Accrued Liabilities [Abstract] | ||
Accounts payable non-trade | $ 193 | $ 215 |
Accrued compensation and benefits | 116 | 92 |
Allowance for sales returns | 73 | 93 |
Deferred revenue | 63 | 69 |
Sales and other taxes | 50 | 62 |
Income taxes | 40 | 120 |
Accrued interest | 37 | 58 |
Other | 58 | 60 |
Accrued liabilities | $ 630 | $ 769 |
Long-Term Debt (Debt) (Details)
Long-Term Debt (Debt) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Build to suit lease obligation | $ 102 | $ 105 |
Less debt issuance costs, net | (23) | (28) |
Total debt and capital lease obligations | 5,090 | 5,289 |
Less current portion | (17) | (14) |
Long-term portion of debt and capital lease obligations | $ 5,073 | 5,275 |
3.125% Senior Secured Notes due 2019, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.125% | |
Debt and Capital Lease Obligations | $ 399 | 399 |
5.125% Senior Secured Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.125% | |
Debt and Capital Lease Obligations | $ 500 | 500 |
4.375% Senior Secured Notes due 2023, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.375% | |
Debt and Capital Lease Obligations | $ 750 | 750 |
4.85% Senior Secured Notes due 2024, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
Debt and Capital Lease Obligations | $ 600 | 600 |
4.45% Senior Secured Notes due 2025, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.45% | |
Debt and Capital Lease Obligations | $ 599 | 599 |
5.45% Senior Secured Notes due 2034, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.45% | |
Debt and Capital Lease Obligations | $ 399 | 399 |
5.95% Senior Secured Notes due 2043, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.95% | |
Debt and Capital Lease Obligations | $ 300 | 300 |
Senior secured credit facility | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 1,390 | 1,596 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | $ 74 | $ 69 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 23, 2016 | Jun. 15, 2016 |
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 2,650,000,000 | |||
Derivative notional amount | $ 125,000,000 | |||
Derivative asset noncurrent | $ 2,000,000 | |||
Line of credit facility, standby letter of credit | 300,000,000 | |||
Line of credit facility, uncommitted loan | 1,500,000,000 | |||
Line of credit facility, remaining borrowing capacity | $ 950,000,000 | |||
Debt instrument, lower range of basis spread on variable rate | 0.25% | |||
Debt instrument, higher range of basis spread on variable rate | 0.75% | |||
Line of credit facility, interest rate at period end | 2.70% | |||
Weighted average interest rate | 4.10% | |||
London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, lower range of basis spread on variable rate | 1.25% | |||
Debt instrument, higher range of basis spread on variable rate | 1.75% | |||
Revolving Credit Facility | Tranche One, Shared with Related Party | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 400,000,000 | |||
Revolving Credit Facility | QVC | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 2,250,000,000 | |||
Revolving Credit Facility | QVC Portion Maturing on March 9, 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 140,000,000 | |||
Standby Letters of Credit | Tranche One, Shared with Related Party | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, standby letter of credit | $ 50,000,000 |
Leases (Details)
Leases (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)ft² | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)ft² | Sep. 30, 2016USD ($) | |
Capital Leases | ||||
Remainder of 2017 | $ 4 | $ 4 | ||
2,018 | 16 | 16 | ||
2,019 | 16 | 16 | ||
2,020 | 13 | 13 | ||
2,021 | 12 | 12 | ||
Thereafter | 18 | 18 | ||
Total | 79 | 79 | ||
Operating leases | ||||
Remainder of 2017 | 5 | 5 | ||
2,018 | 18 | 18 | ||
2,019 | 14 | 14 | ||
2,020 | 11 | 11 | ||
2,021 | 9 | 9 | ||
Thereafter | 71 | 71 | ||
Total | 128 | 128 | ||
Built to suit lease | ||||
Remainder of 2017 | 1 | 1 | ||
2,018 | 6 | 6 | ||
2,019 | 6 | 6 | ||
2,020 | 6 | 6 | ||
2,021 | 6 | 6 | ||
Thereafter | 67 | 67 | ||
Total | $ 92 | $ 92 | ||
Capital leased assets, number of units | 14 | 14 | ||
Capital Transponder Monthly Lease Expense | $ 1 | $ 1 | ||
Capital leases depreciation expense | 3 | $ 3 | 9 | $ 8 |
Imputed Interest on Capital Lease | 5 | 5 | ||
Operating leases expense net | $ 5 | $ 6 | $ 17 | $ 18 |
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 | |||
Build to suit lease, Useful Life | 20 years |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||||
Income tax expense | $ (58) | $ (66) | $ (225) | $ (244) | |
Effective income tax rate reconciliation, percent | 25.90% | 33.20% | |||
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 from related parties | $ 3 | $ 3 | |||
Current tax payments due to related parties | $ 75 |
Financial Instruments and Fai44
Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 15, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative notional amount | $ 125 | ||
Assets, Noncurrent | |||
Derivative asset noncurrent | $ 2 | ||
Recurring | |||
Current Assets | |||
Cash equivalents | 88 | $ 113 | |
Assets, Noncurrent | |||
Derivative asset noncurrent | 2 | 2 | |
Long-term liabilities | |||
Long-term Debt, Fair Value | 5,044 | 5,092 | |
Recurring | Level 1 | |||
Current Assets | |||
Cash equivalents | 88 | 113 | |
Recurring | Level 2 | |||
Assets, Noncurrent | |||
Derivative asset noncurrent | 2 | 2 | |
Long-term liabilities | |||
Long-term Debt, Fair Value | $ 5,044 | $ 5,092 |
Information about QVC's Opera45
Information about QVC's Operating Segments (Revenue and Adjusted OIBDA by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 2,010 | $ 1,948 | $ 5,954 | $ 6,024 |
Adjusted OIBDA | 412 | 393 | 1,314 | 1,271 |
QVC-U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1,374 | 1,338 | 4,111 | 4,173 |
Adjusted OIBDA | 313 | 308 | 1,010 | 997 |
QVC- International | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 636 | 610 | 1,843 | 1,851 |
Adjusted OIBDA | $ 99 | $ 85 | $ 304 | $ 274 |
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Depreciation | $ 38 | $ 38 | $ 116 | $ 103 |
Amortization | 91 | 116 | 324 | 345 |
QVC-U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 24 | 22 | 70 | 55 |
Amortization | 83 | 103 | 293 | 308 |
QVC- International | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 14 | 16 | 46 | 48 |
Amortization | $ 8 | $ 13 | $ 31 | $ 37 |
Information about QVC's Opera47
Information about QVC's Operating Segments (Total Assets and Capital Expenditures by Segment) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total assets | $ 11,263 | $ 11,545 |
Capital expenditures | 83 | 179 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,107 | 9,595 |
Capital expenditures | 63 | 152 |
QVC- International | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,156 | 1,950 |
Capital expenditures | $ 20 | $ 27 |
Information about QVC's Opera48
Information about QVC's Operating Segments (Long-lived Assets by Segment) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 998 | $ 1,031 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 552 | 594 |
QVC- International | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 446 | $ 437 |
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting [Abstract] | ||||
Adjusted OIBDA | $ 412 | $ 393 | $ 1,314 | $ 1,271 |
Stock-based compensation | (9) | (8) | (23) | (24) |
Depreciation and amortization | (129) | (154) | (440) | (448) |
Equity in losses of investee | 0 | (2) | (3) | (4) |
Interest expense, net | (54) | (52) | (165) | (159) |
Foreign currency gain (loss) | 4 | 5 | (6) | 27 |
Income before income taxes | $ 224 | $ 182 | $ 677 | $ 663 |
Other Comprehensive Income (Acc
Other Comprehensive Income (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Foreign currency translation adjustments | ||
Beginning balance | $ (224) | $ (140) |
Other comprehensive income attributable to QVC, Inc. stockholder | 106 | 18 |
Ending balance | (118) | (122) |
AOCL | ||
Beginning balance | (224) | (140) |
Other comprehensive income attributable to QVC, Inc. stockholder | 106 | 18 |
Ending balance | $ (118) | $ (122) |
Other Comprehensive Income (Com
Other Comprehensive Income (Component of Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Foreign currency translation adjustments before tax | $ 33 | $ (7) | $ 135 | $ 23 |
Tax (expense) benefit from foreign currency translation (loss) gain | (5) | 4 | (25) | 13 |
Foreign currency translation adjustments, net of tax | $ 28 | $ (3) | $ 110 | $ 36 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Nov. 09, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Subsequent Event [Line Items] | |||
Dividends paid to Liberty Interactive Corporation | $ 491 | $ 427 | |
Line of credit facility, remaining borrowing capacity | $ 950 | ||
Liberty | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividends paid to Liberty Interactive Corporation | $ 300 | ||
Revolving Credit Facility | Tranche One, Shared with Related Party | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Line of credit facility, remaining borrowing capacity | $ 275 |
Guarantor_Non-Guarantor Subsi53
Guarantor/Non-Guarantor Subsidiary Financial Information (Narrative) (Details) | Sep. 30, 2017 |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
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, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 343 | $ 284 | $ 319 | $ 327 |
Restricted cash | 11 | 10 | ||
Accounts receivable, net | 888 | 1,246 | ||
Inventories | 1,164 | 950 | ||
Prepaid expenses and other current assets | 55 | 46 | ||
Total current assets | 2,461 | 2,536 | ||
Property and equipment, net | 998 | 1,031 | ||
Television distribution rights, net | 78 | 183 | ||
Goodwill | 5,066 | 4,995 | ||
Other intangible assets, net | 2,599 | 2,738 | ||
Other noncurrent assets | 61 | 62 | ||
Investments in subsidiaries | 0 | 0 | ||
Total assets | 11,263 | 11,545 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 17 | 14 | ||
Accounts payable-trade | 726 | 678 | ||
Accrued liabilities | 630 | 769 | ||
Intercompany accounts payable (receivable) | 0 | 0 | ||
Total current liabilities | 1,373 | 1,461 | ||
Long-term portion of debt and capital lease obligations | 5,073 | 5,275 | ||
Deferred income taxes | 730 | 778 | ||
Other long-term liabilities | 127 | 136 | ||
Total liabilities | 7,303 | 7,650 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 3,845 | 3,795 | ||
Noncontrolling interest | 115 | 100 | ||
Total equity | 3,960 | 3,895 | ||
Total liabilities and equity | 11,263 | 11,545 | ||
Parent issuer- QVC, Inc. | ||||
Current assets: | ||||
Cash and cash equivalents | 3 | 2 | 2 | 0 |
Restricted cash | 8 | 8 | ||
Accounts receivable, net | 628 | 958 | ||
Inventories | 868 | 726 | ||
Prepaid expenses and other current assets | 26 | 22 | ||
Total current assets | 1,533 | 1,716 | ||
Property and equipment, net | 286 | 317 | ||
Television distribution rights, net | 0 | 0 | ||
Goodwill | 4,190 | 4,190 | ||
Other intangible assets, net | 534 | 666 | ||
Other noncurrent assets | 15 | 15 | ||
Investments in subsidiaries | 3,190 | 3,389 | ||
Total assets | 9,748 | 10,293 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 3 | 3 | ||
Accounts payable-trade | 458 | 425 | ||
Accrued liabilities | 70 | 74 | ||
Intercompany accounts payable (receivable) | 270 | 623 | ||
Total current liabilities | 801 | 1,125 | ||
Long-term portion of debt and capital lease obligations | 4,927 | 5,132 | ||
Deferred income taxes | 73 | 145 | ||
Other long-term liabilities | 102 | 96 | ||
Total liabilities | 5,903 | 6,498 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 3,845 | 3,795 | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | 3,845 | 3,795 | ||
Total liabilities and equity | 9,748 | 10,293 | ||
Combined subsidiary guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 50 | 97 | 99 | 112 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 1 | 0 | ||
Total current assets | 51 | 97 | ||
Property and equipment, net | 59 | 63 | ||
Television distribution rights, net | 78 | 167 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 2,048 | 2,049 | ||
Other noncurrent assets | 0 | 0 | ||
Investments in subsidiaries | 64 | 1,030 | ||
Total assets | 2,300 | 3,406 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 0 | 0 | ||
Accounts payable-trade | 0 | 0 | ||
Accrued liabilities | 157 | 234 | ||
Intercompany accounts payable (receivable) | (1,434) | (246) | ||
Total current liabilities | (1,277) | (12) | ||
Long-term portion of debt and capital lease obligations | 0 | 0 | ||
Deferred income taxes | 718 | 707 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | (559) | 695 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 2,859 | 2,711 | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | 2,859 | 2,711 | ||
Total liabilities and equity | 2,300 | 3,406 | ||
Combined non-guarantor subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 290 | 185 | 218 | 215 |
Restricted cash | 3 | 2 | ||
Accounts receivable, net | 260 | 288 | ||
Inventories | 296 | 224 | ||
Prepaid expenses and other current assets | 28 | 24 | ||
Total current assets | 877 | 723 | ||
Property and equipment, net | 653 | 651 | ||
Television distribution rights, net | 0 | 16 | ||
Goodwill | 876 | 805 | ||
Other intangible assets, net | 17 | 23 | ||
Other noncurrent assets | 46 | 47 | ||
Investments in subsidiaries | 0 | 0 | ||
Total assets | 2,469 | 2,265 | ||
Current liabilities: | ||||
Current portion of debt and capital lease obligations | 14 | 11 | ||
Accounts payable-trade | 268 | 253 | ||
Accrued liabilities | 403 | 461 | ||
Intercompany accounts payable (receivable) | 1,164 | (377) | ||
Total current liabilities | 1,849 | 348 | ||
Long-term portion of debt and capital lease obligations | 146 | 143 | ||
Deferred income taxes | (61) | (74) | ||
Other long-term liabilities | 25 | 40 | ||
Total liabilities | 1,959 | 457 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | 395 | 1,708 | ||
Noncontrolling interest | 115 | 100 | ||
Total equity | 510 | 1,808 | ||
Total liabilities and equity | 2,469 | 2,265 | ||
Elimination | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Restricted cash | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Television distribution rights, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other noncurrent assets | 0 | 0 | ||
Investments in subsidiaries | (3,254) | (4,419) | ||
Total assets | (3,254) | (4,419) | ||
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 income taxes | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
QVC, Inc. stockholder's equity: | ||||
QVC, Inc. stockholder's equity | (3,254) | (4,419) | ||
Noncontrolling interest | 0 | 0 | ||
Total equity | (3,254) | (4,419) | ||
Total liabilities and equity | $ (3,254) | $ (4,419) |
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | $ 2,010 | $ 1,948 | $ 5,954 | $ 6,024 |
Cost of goods sold | 1,282 | 1,251 | 3,755 | 3,816 |
Gross profit | 728 | 697 | 2,199 | 2,208 |
Operating expenses: | ||||
Operating | 145 | 140 | 419 | 428 |
Selling, general and administrative, including stock-based compensation | 180 | 172 | 489 | 533 |
Depreciation | 38 | 38 | 116 | 103 |
Amortization | 91 | 116 | 324 | 345 |
Operating expenses | 454 | 466 | 1,348 | 1,409 |
Operating income | 274 | 231 | 851 | 799 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | (2) | (3) | (4) |
Interest expense, net | (54) | (52) | (165) | (159) |
Foreign currency gain (loss) | 4 | 5 | (6) | 27 |
Intercompany interest (expense) income | 0 | 0 | 0 | |
Nonoperating expense | (50) | (49) | (174) | (136) |
Income before income taxes | 224 | 182 | 677 | 663 |
Income tax expense | (58) | (66) | (225) | (244) |
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | 0 |
Net income | 166 | 116 | 452 | 419 |
Less net income attributable to the noncontrolling interest | (12) | (9) | (33) | (28) |
Net income attributable to QVC, Inc. stockholder | 154 | 107 | 419 | 391 |
Parent issuer- QVC, Inc. | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | 1,419 | 1,369 | 4,225 | 4,272 |
Cost of goods sold | 864 | 847 | 2,557 | 2,594 |
Gross profit | 555 | 522 | 1,668 | 1,678 |
Operating expenses: | ||||
Operating | 106 | 94 | 301 | 296 |
Selling, general and administrative, including stock-based compensation | 262 | 246 | 743 | 773 |
Depreciation | 17 | 16 | 50 | 41 |
Amortization | 47 | 62 | 167 | 182 |
Operating expenses | 432 | 418 | 1,261 | 1,292 |
Operating income | 123 | 104 | 407 | 386 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | 0 | 0 | 0 |
Interest expense, net | (54) | (52) | (163) | (159) |
Foreign currency gain (loss) | (1) | 3 | (4) | 12 |
Intercompany interest (expense) income | (1) | 0 | (3) | (1) |
Nonoperating expense | (56) | (49) | (170) | (148) |
Income before income taxes | 67 | 55 | 237 | 238 |
Income tax expense | (13) | (13) | (84) | (75) |
Equity in earnings of subsidiaries, net of tax | 112 | 74 | 299 | 256 |
Net income | 166 | 116 | 452 | 419 |
Less net income attributable to the noncontrolling interest | (12) | (9) | (33) | (28) |
Net income attributable to QVC, Inc. stockholder | 154 | 107 | 419 | 391 |
Combined subsidiary guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | 234 | 224 | 679 | 688 |
Cost of goods sold | 37 | 38 | 106 | 116 |
Gross profit | 197 | 186 | 573 | 572 |
Operating expenses: | ||||
Operating | 64 | 61 | 182 | 180 |
Selling, general and administrative, including stock-based compensation | 0 | 0 | 0 | 0 |
Depreciation | 2 | 1 | 6 | 5 |
Amortization | 35 | 41 | 125 | 125 |
Operating expenses | 101 | 103 | 313 | 310 |
Operating income | 96 | 83 | 260 | 262 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | 0 | 0 | 0 |
Interest expense, net | 0 | 0 | 0 | 0 |
Foreign currency gain (loss) | 1 | 0 | 1 | 0 |
Intercompany interest (expense) income | 23 | 0 | 68 | 1 |
Nonoperating expense | 24 | 0 | 69 | 1 |
Income before income taxes | 120 | 83 | 329 | 263 |
Income tax expense | (24) | (26) | (86) | (85) |
Equity in earnings of subsidiaries, net of tax | 19 | 24 | 34 | 106 |
Net income | 115 | 81 | 277 | 284 |
Less net income attributable to the noncontrolling interest | 0 | 0 | 0 | 0 |
Net income attributable to QVC, Inc. stockholder | 115 | 81 | 277 | 284 |
Combined non-guarantor subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | 688 | 662 | 1,992 | 2,009 |
Cost of goods sold | 422 | 416 | 1,210 | 1,245 |
Gross profit | 266 | 246 | 782 | 764 |
Operating expenses: | ||||
Operating | 70 | 64 | 204 | 204 |
Selling, general and administrative, including stock-based compensation | 113 | 104 | 302 | 314 |
Depreciation | 19 | 21 | 60 | 57 |
Amortization | 9 | 13 | 32 | 38 |
Operating expenses | 211 | 202 | 598 | 613 |
Operating income | 55 | 44 | 184 | 151 |
Other (expense) income: | ||||
Equity in losses of investee | 0 | (2) | (3) | (4) |
Interest expense, net | 0 | 0 | (2) | 0 |
Foreign currency gain (loss) | 4 | 2 | (3) | 15 |
Intercompany interest (expense) income | (22) | 0 | (65) | 0 |
Nonoperating expense | (18) | 0 | (73) | 11 |
Income before income taxes | 37 | 44 | 111 | 162 |
Income tax expense | (21) | (27) | (55) | (84) |
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | 0 |
Net income | 16 | 17 | 56 | 78 |
Less net income attributable to the noncontrolling interest | (12) | (9) | (33) | (28) |
Net income attributable to QVC, Inc. stockholder | 4 | 8 | 23 | 50 |
Elimination | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net revenue | (331) | (307) | (942) | (945) |
Cost of goods sold | (41) | (50) | (118) | (139) |
Gross profit | (290) | (257) | (824) | (806) |
Operating expenses: | ||||
Operating | (95) | (79) | (268) | (252) |
Selling, general and administrative, including stock-based compensation | (195) | (178) | (556) | (554) |
Depreciation | 0 | 0 | 0 | 0 |
Amortization | 0 | 0 | 0 | 0 |
Operating expenses | (290) | (257) | (824) | (806) |
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 (loss) | 0 | 0 | 0 | 0 |
Intercompany interest (expense) income | 0 | 0 | 0 | 0 |
Nonoperating expense | 0 | 0 | 0 | 0 |
Income before income taxes | 0 | 0 | 0 | 0 |
Income tax expense | 0 | 0 | 0 | 0 |
Equity in earnings of subsidiaries, net of tax | (131) | (98) | (333) | (362) |
Net income | (131) | (98) | (333) | (362) |
Less net income attributable to the noncontrolling interest | 12 | 9 | 33 | 28 |
Net income attributable to QVC, Inc. stockholder | $ (119) | $ (89) | $ (300) | $ (334) |
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, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | $ 166 | $ 116 | $ 452 | $ 419 |
Foreign currency translation adjustments, net of tax | 28 | (3) | 110 | 36 |
Total comprehensive income | 194 | 113 | 562 | 455 |
Comprehensive income attributable to noncontrolling interest | (12) | (11) | (37) | (46) |
Comprehensive income attributable to QVC, Inc. stockholder | 182 | 102 | 525 | 409 |
Parent issuer- QVC, Inc. | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 166 | 116 | 452 | 419 |
Foreign currency translation adjustments, net of tax | 28 | (3) | 110 | 36 |
Total comprehensive income | 194 | 113 | 562 | 455 |
Comprehensive income attributable to noncontrolling interest | (12) | (11) | (37) | (46) |
Comprehensive income attributable to QVC, Inc. stockholder | 182 | 102 | 525 | 409 |
Combined subsidiary guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 115 | 81 | 277 | 284 |
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 | 0 |
Total comprehensive income | 115 | 81 | 277 | 284 |
Comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Comprehensive income attributable to QVC, Inc. stockholder | 115 | 81 | 277 | 284 |
Combined non-guarantor subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 16 | 17 | 56 | 78 |
Foreign currency translation adjustments, net of tax | 28 | (3) | 110 | 36 |
Total comprehensive income | 44 | 14 | 166 | 114 |
Comprehensive income attributable to noncontrolling interest | (12) | (11) | (37) | (46) |
Comprehensive income attributable to QVC, Inc. stockholder | 32 | 3 | 129 | 68 |
Elimination | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (131) | (98) | (333) | (362) |
Foreign currency translation adjustments, net of tax | (28) | 3 | (110) | (36) |
Total comprehensive income | (159) | (95) | (443) | (398) |
Comprehensive income attributable to noncontrolling interest | 12 | 11 | 37 | 46 |
Comprehensive income attributable to QVC, Inc. stockholder | $ (147) | $ (84) | $ (406) | $ (352) |
Guarantor_Non-Guarantor Subsi57
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Cash Flow) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities: | ||
Net cash provided by operating activities | $ 907 | $ 849 |
Investing activities: | ||
Capital expenditures | (83) | (140) |
Expenditures for television distribution rights | (35) | (8) |
Changes in other noncurrent assets | (2) | (2) |
Other investing activities | 0 | (3) |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (120) | (153) |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (1,791) | (1,300) |
Principal borrowings of debt from senior secured credit facility | 1,574 | 1,048 |
Payment of debt origination fees | 0 | (2) |
Dividends paid to Liberty Interactive Corporation | (491) | (427) |
Dividends paid to noncontrolling interest | (22) | (21) |
Other financing activities | (10) | (9) |
Net short-term intercompany debt (repayments) borrowings | 0 | 0 |
Other intercompany financing activities | 0 | 0 |
Net cash used in financing activities | (740) | (711) |
Effect of foreign exchange rate changes on cash and cash equivalents | 12 | 7 |
Net increase (decrease) in cash and cash equivalents | 59 | (8) |
Cash and cash equivalents, beginning of period | 284 | 327 |
Cash and cash equivalents, end of period | 343 | 319 |
Parent issuer- QVC, Inc. | ||
Operating activities: | ||
Net cash provided by operating activities | 550 | 586 |
Investing activities: | ||
Capital expenditures | (54) | (113) |
Expenditures for television distribution rights | 0 | 0 |
Changes in other noncurrent assets | (1) | 6 |
Other investing activities | 0 | (12) |
Intercompany investing activities | 385 | 432 |
Net cash used in investing activities | 330 | 313 |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (1,785) | (1,295) |
Principal borrowings of debt from senior secured credit facility | 1,574 | 1,048 |
Payment of debt origination fees | 0 | (2) |
Dividends paid to Liberty Interactive Corporation | (491) | (427) |
Dividends paid to noncontrolling interest | 0 | 0 |
Other financing activities | (10) | (9) |
Net short-term intercompany debt (repayments) borrowings | (353) | (83) |
Other intercompany financing activities | 186 | (129) |
Net cash used in financing activities | (879) | (897) |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 1 | 2 |
Cash and cash equivalents, beginning of period | 2 | 0 |
Cash and cash equivalents, end of period | 3 | 2 |
Combined subsidiary guarantors | ||
Operating activities: | ||
Net cash provided by operating activities | 306 | 256 |
Investing activities: | ||
Capital expenditures | (2) | (3) |
Expenditures for television distribution rights | (35) | (8) |
Changes in other noncurrent assets | 0 | 0 |
Other investing activities | 0 | 0 |
Intercompany investing activities | (1,087) | 137 |
Net cash used in investing activities | (1,124) | 126 |
Financing activities: | ||
Principal payments of debt and capital lease obligations | 0 | 0 |
Principal borrowings of debt from senior secured credit facility | 0 | 0 |
Payment of debt origination fees | 0 | 0 |
Dividends paid to Liberty Interactive Corporation | 0 | 0 |
Dividends paid to noncontrolling interest | 0 | 0 |
Other financing activities | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | (1,188) | (1,474) |
Other intercompany financing activities | 1,959 | 1,079 |
Net cash used in financing activities | 771 | (395) |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | (47) | (13) |
Cash and cash equivalents, beginning of period | 97 | 112 |
Cash and cash equivalents, end of period | 50 | 99 |
Combined non-guarantor subsidiaries | ||
Operating activities: | ||
Net cash provided by operating activities | 51 | 7 |
Investing activities: | ||
Capital expenditures | (27) | (24) |
Expenditures for television distribution rights | 0 | 0 |
Changes in other noncurrent assets | (1) | (8) |
Other investing activities | 0 | 9 |
Intercompany investing activities | 0 | 0 |
Net cash used in investing activities | (28) | (23) |
Financing activities: | ||
Principal payments of debt and capital lease obligations | (6) | (5) |
Principal borrowings of debt from senior secured credit facility | 0 | 0 |
Payment of debt origination fees | 0 | 0 |
Dividends paid to Liberty Interactive Corporation | 0 | 0 |
Dividends paid to noncontrolling interest | (22) | (21) |
Other financing activities | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | 1,541 | 1,557 |
Other intercompany financing activities | (1,443) | (1,519) |
Net cash used in financing activities | 70 | 12 |
Effect of foreign exchange rate changes on cash and cash equivalents | 12 | 7 |
Net increase (decrease) in cash and cash equivalents | 105 | 3 |
Cash and cash equivalents, beginning of period | 185 | 215 |
Cash and cash equivalents, end of period | 290 | 218 |
Elimination | ||
Operating activities: | ||
Net cash provided by operating activities | 0 | 0 |
Investing activities: | ||
Capital expenditures | 0 | 0 |
Expenditures for television distribution rights | 0 | 0 |
Changes in other noncurrent assets | 0 | 0 |
Other investing activities | 0 | 0 |
Intercompany investing activities | 702 | (569) |
Net cash used in investing activities | 702 | (569) |
Financing activities: | ||
Principal payments of debt and capital lease obligations | 0 | 0 |
Principal borrowings of debt from senior secured credit facility | 0 | 0 |
Payment of debt origination fees | 0 | 0 |
Dividends paid to Liberty Interactive Corporation | 0 | 0 |
Dividends paid to noncontrolling interest | 0 | 0 |
Other financing activities | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | 0 | 0 |
Other intercompany financing activities | (702) | 569 |
Net cash used in financing activities | (702) | 569 |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) 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 |