Document and Entity Information
Document and Entity Information Document $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
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 | shares | 1 |
Document Type | 10-K |
Document Period End Date | Dec. 31, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Entity Current Reporting Status submitted electronically | Yes |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Public Float | $ | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 260 | $ 284 |
Restricted cash | 8 | 10 |
Accounts receivable, less allowance for doubtful accounts of $91 at December 31, 2017 and $97 at December 31, 2016 | 1,388 | 1,246 |
Inventories | 1,019 | 950 |
Prepaid expenses and other current assets | 51 | 46 |
Total current assets | 2,726 | 2,536 |
Noncurrent assets: | ||
Property and equipment, net of accumulated depreciation of $1,174 at December 31, 2017 and $1,004 at December 31, 2016 | 1,005 | 1,031 |
Television distribution rights, net | 78 | 183 |
Goodwill | 5,075 | 4,995 |
Other intangible assets, net | 2,605 | 2,738 |
Other noncurrent assets | 61 | 62 |
Total assets | 11,550 | 11,545 |
Current liabilities: | ||
Current portion of debt and capital lease obligations | 17 | 14 |
Accounts payable-trade | 756 | 678 |
Accrued liabilities | 872 | 769 |
Total current liabilities | 1,645 | 1,461 |
Noncurrent liabilities: | ||
Long-term portion of debt and capital lease obligations | 5,173 | 5,275 |
Deferred income taxes | 473 | 778 |
Other long-term liabilities | 117 | 136 |
Total liabilities | 7,408 | 7,650 |
QVC, Inc. stockholder's equity: | ||
Common stock, $0.01 par value, 1 authorized share | 0 | 0 |
Additional paid-in capital | 6,897 | 6,851 |
Accumulated deficit | (2,772) | (2,832) |
Accumulated other comprehensive loss | (93) | (224) |
Total QVC, Inc. stockholder's equity | 4,032 | 3,795 |
Noncontrolling interest | 110 | 100 |
Total equity | 4,142 | 3,895 |
Total liabilities and equity | $ 11,550 | $ 11,545 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 91 | $ 97 |
Accumulated depreciation | $ 1,174 | $ 1,004 |
Common stock par value | $ 0.01 | $ 0.01 |
Authorized shares | 1 | 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net revenue | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 2,658 | $ 1,948 | $ 2,063 | $ 2,013 | $ 8,771 | $ 8,682 | $ 8,743 |
Operating costs and expenses: | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 5,598 | 5,540 | 5,528 | ||||||||
Operating | 601 | 606 | 607 | ||||||||
Selling, general and administrative, including stock-based compensation | 706 | 728 | 745 | ||||||||
Depreciation | 155 | 142 | 134 | ||||||||
Amortization | 364 | 463 | 454 | ||||||||
Operating expenses | 7,424 | 7,479 | 7,468 | ||||||||
Operating income | 496 | 274 | 306 | 271 | 404 | 231 | 307 | 261 | 1,347 | 1,203 | 1,275 |
Other (expense) income: | |||||||||||
Equity in losses of investee | (3) | (6) | (9) | ||||||||
Gains on financial instruments | 0 | 2 | 0 | ||||||||
Interest expense, net | (214) | (210) | (208) | ||||||||
Foreign currency (loss) gain | (6) | 38 | 14 | ||||||||
Loss on extinguishment of debt | 0 | 0 | (21) | ||||||||
Nonoperating expense | (223) | (176) | (224) | ||||||||
Income before income taxes | 1,124 | 1,027 | 1,051 | ||||||||
Income tax expense | (152) | (385) | (389) | ||||||||
Net income | 520 | 166 | 151 | 135 | 225 | 116 | 168 | 133 | 972 | 642 | 662 |
Less net income attributable to the noncontrolling interest | (46) | (38) | (34) | ||||||||
Net income attributable to QVC, Inc. stockholder | $ 507 | $ 154 | $ 141 | $ 124 | $ 215 | $ 107 | $ 157 | $ 125 | $ 926 | $ 604 | $ 628 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net income | $ 520 | $ 166 | $ 151 | $ 135 | $ 225 | $ 116 | $ 168 | $ 133 | $ 972 | $ 642 | $ 662 |
Foreign currency translation adjustments, net of tax | 135 | (83) | (102) | ||||||||
Total comprehensive income | 1,107 | 559 | 560 | ||||||||
Comprehensive income attributable to noncontrolling interest | (50) | (39) | (33) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | $ 1,057 | $ 520 | $ 527 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net income | $ 972 | $ 642 | $ 662 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in losses of investee | 3 | 6 | 9 |
Deferred income taxes | (324) | (43) | (90) |
Foreign currency loss (gain) | 6 | (38) | (14) |
Depreciation | 155 | 142 | 134 |
Amortization | 364 | 463 | 454 |
Change in fair value of financial instruments and noncash interest | 4 | 5 | 7 |
Loss on extinguishment of debt | 0 | 0 | 21 |
Stock-based compensation | 31 | 32 | 31 |
Change in other long-term liabilities | (19) | (8) | 0 |
Effects of changes in working capital items | 10 | (23) | (186) |
Net cash provided by operating activities | 1,202 | 1,178 | 1,028 |
Investing activities: | |||
Capital expenditures | (152) | (179) | (215) |
Expenditures for television distribution rights | (50) | (38) | (72) |
Decreases in restricted cash | 2 | 1 | 0 |
Changes in other noncurrent assets | (1) | (1) | 0 |
Other investing activities | 0 | (3) | 2 |
Net cash used in investing activities | (201) | (220) | (285) |
Financing activities: | |||
Principal payments of debt and capital lease obligations | (2,278) | (1,733) | (2,177) |
Principal borrowings of debt from senior secured credit facility | 2,162 | 1,505 | 2,974 |
Payment of debt origination fees | 0 | (2) | (3) |
Payment of bond premium fees | 0 | 0 | (18) |
Dividends paid to Liberty Interactive Corporation | (866) | (703) | (1,485) |
Dividends paid to noncontrolling interest | (40) | (39) | (36) |
Other financing activities | (16) | (9) | (15) |
Net cash used in financing activities | (1,038) | (981) | (760) |
Effect of foreign exchange rate changes on cash and cash equivalents | 13 | (20) | (3) |
Net decrease in cash and cash equivalents | (24) | (43) | (20) |
Cash and cash equivalents, beginning of period | 284 | 327 | |
Cash and cash equivalents, end of period | 260 | 284 | 327 |
Effects of changes in working capital items: | |||
(Increase) decrease in accounts receivable | (127) | 117 | (178) |
Increase in inventories | (43) | (38) | (68) |
Decrease (increase) in prepaid expenses and other current assets | 0 | 29 | (9) |
Increase in accounts payable-trade | 50 | 22 | 27 |
Increase (decrease) in accrued liabilities and other | 130 | (153) | 42 |
Effects of changes in working capital items | 10 | (23) | (186) |
Cash paid for taxes-to Liberty | 363 | 395 | 330 |
Cash paid for taxes-other | 81 | 105 | 141 |
Cash paid for interest | $ 211 | $ 210 | $ 223 |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Noncontrolling interest |
Balance at Dec. 31, 2014 | $ 5,046 | $ 0 | $ 6,787 | $ (1,805) | $ (39) | $ 103 |
Common Stock, Shares, Outstanding (beginning) at Dec. 31, 2014 | 1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 662 | 0 | 628 | 0 | 34 | |
Foreign currency translation adjustments, net of tax | (102) | 0 | 0 | (101) | (1) | |
Dividends paid to Liberty Interactive Corporation and noncontrolling interest and other | (1,528) | 0 | (1,492) | 0 | (36) | |
Impact of tax liability allocation and indemnification agreement with Liberty Interactive Corporation | 18 | 18 | 0 | 0 | 0 | |
Withholding taxes on net share settlements of stock-based compensation | (9) | (9) | 0 | 0 | 0 | |
Stock-based compensation | 31 | 31 | 0 | 0 | 0 | |
Balance at Dec. 31, 2015 | 4,118 | $ 0 | 6,827 | (2,669) | (140) | 100 |
Common Stock, Shares, Outstanding (ending) at Dec. 31, 2015 | 1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 642 | 0 | 604 | 0 | 38 | |
Foreign currency translation adjustments, net of tax | (83) | 0 | 0 | (84) | 1 | |
Dividends paid to Liberty Interactive Corporation and noncontrolling interest and other | (742) | 0 | (703) | 0 | (39) | |
Impact of tax liability allocation and indemnification agreement with Liberty Interactive Corporation | (64) | 0 | (64) | 0 | 0 | |
Withholding taxes on net share settlements of stock-based compensation | (8) | (8) | 0 | 0 | 0 | |
Stock-based compensation | 32 | 32 | 0 | 0 | 0 | |
Balance at Dec. 31, 2016 | 3,895 | $ 0 | 6,851 | (2,832) | (224) | 100 |
Common Stock, Shares, Outstanding (ending) at Dec. 31, 2016 | 1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 972 | 0 | 926 | 0 | 46 | |
Foreign currency translation adjustments, net of tax | 135 | 0 | 0 | 131 | 4 | |
Dividends paid to Liberty Interactive Corporation and noncontrolling interest and other | (906) | 0 | (866) | 0 | (40) | |
Impact of tax liability allocation and indemnification agreement with Liberty Interactive Corporation | 31 | 31 | 0 | 0 | 0 | |
Withholding taxes on net share settlements of stock-based compensation | (16) | (16) | 0 | 0 | 0 | |
Stock-based compensation | 31 | 31 | 0 | 0 | 0 | |
Balance at Dec. 31, 2017 | $ 4,142 | $ 0 | $ 6,897 | $ (2,772) | $ (93) | $ 110 |
Common Stock, Shares, Outstanding (ending) at Dec. 31, 2017 | 1 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 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 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, Facebook, 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 QVC2 in Germany and QVC Beauty, QVC Extra and QVC Style 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"). 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 years ended December 31, 2017, 2016 and 2015 , QVC-Japan paid dividends to Mitsui of $40 million , $39 million and $36 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 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 HSN , Inc. ("HSN"), cash and certain liabilities. 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. The transactions are expected to be consummated on March 9, 2018, subject to the satisfaction of customary closing conditions. Simultaneous with that closing, the QVC Group common stock will become the only outstanding common stock of Liberty, and thus QVC Group common stock will cease to function as tracking stock and will effectively become regular common stock. In addition, Liberty will be renamed Qurate Retail Group, Inc., with QVC, HSN and zulily as wholly-owned subsidiaries. On December 29, 2017, Liberty completed the acquisition of the remaining 62% ownership interest of HSN in an all-stock transaction. HSN is attributed to the QVC Group. The QVC Group does not represent a separate legal entity; rather, it represents those businesses, assets and liabilities that are attributed to that group. HSN is not included in the results of operations or financial position of QVC presented in the Company's consolidated financial statements. On October 1, 2015, Liberty acquired all of the outstanding shares of zulily and QVC declared and paid a dividend to Liberty in the amount of $910 million with funds drawn from the Company’s credit facility to support Liberty’s purchase. 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 consolidated financial statements. Additionally, 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 8. The consolidated financial statements include the accounts of QVC, Inc. and its majority-owned subsidiaries. All significant intercompany accounts and transactions were eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Summary of Significant Accounting Policies (a) Cash and cash equivalents All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Cash equivalents were $42 million and $113 million at December 31, 2017 and 2016 , respectively. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents approximate their fair values (Level 1). (b) Restricted cash Restricted cash at December 31, 2017 and 2016 primarily includes a cash deposit with a third party trustee that provides financial assurance that the Company will fulfill its obligations in relation to claims under its workers' compensation policy. (c) Accounts receivable A provision for customer bad debts is provided as a percentage of accounts receivable based on historical experience and is included within selling, general and administrative expense. A provision for noncustomer bad debt expense, related to amounts due from vendors for unsold and returned products, is provided based on an estimate of the probable expected losses and is included in cost of goods sold. (d) Inventories Inventories, consisting primarily of products held for sale, are stated at the lower of cost or net realizable value. Cost is determined by the average cost method, which approximates the first-in, first-out method. Assessments about the realizability of inventory require the Company to make judgments based on currently available information about the likely method of disposition including sales to individual customers, returns to product vendors, liquidations and the estimated recoverable values of each disposition category. (e) Property and equipment The costs of property and equipment are capitalized and depreciated over their estimated useful lives using the straight-line method beginning in the month of acquisition or in-service date. Transponders under capital leases are stated at the present value of minimum lease payments. When assets are sold or retired, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in net income. The costs of maintenance and repairs are charged to expense as incurred. (f) Capitalized interest The Company capitalizes interest cost incurred on debt during the construction of major projects exceeding one year. Capitalized interest was not material to the consolidated financial statements for any periods presented. (g) Internally developed software Internal software development costs are capitalized in accordance with guidance on accounting for the costs of computer software developed or obtained for internal use, and are classified within other intangible assets in the consolidated balance sheets. The Company amortizes computer software and internal software development costs over an estimated useful life of approximately three years using the straight-line method. (h) Goodwill Goodwill represents the excess of costs over the fair value of the net assets of businesses acquired. Goodwill is not amortized. Goodwill is tested annually for impairment, and more frequently if events and circumstances indicated that the asset might be impaired. An impairment loss would be recognized to the extent that the carrying amount exceeded the reporting unit's fair value. The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows: (in millions) QVC-U.S. QVC-Germany QVC-Japan QVC-U.K. QVC-Italy Total Balance as of December 31, 2015 $ 4,190 278 251 193 123 5,035 Exchange rate fluctuations — (11 ) 7 (32 ) (4 ) (40 ) Balance as of December 31, 2016 4,190 267 258 161 119 4,995 Exchange rate fluctuations — 38 11 15 16 80 Balance as of December 31, 2017 $ 4,190 305 269 176 135 5,075 QVC utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. In evaluating goodwill on a qualitative basis, QVC reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of its reporting units. A reporting unit is defined in accounting guidance in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP" or "GAAP") as an operating segment or one level below an operating segment (also known as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. The Company considers whether there were any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges and the legal environments, and how these factors might impact country specific performance in future periods. If a step one test is considered necessary based on the qualitative factors, the Company compares the estimated fair value of a reporting unit to its carrying value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and timing of expected future cash flows. The cash flows employed in the Company's valuation analysis are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. There is no assurance that actual results in the future will approximate these forecasts. Any excess of the carrying value of the goodwill over the fair value is recorded as an impairment charge. There were no goodwill impairments recorded during the years ended December 31, 2017, 2016 and 2015 . The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. (i) Translation of foreign currencies Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustments, net of applicable income taxes, are recorded as a component of accumulated other comprehensive income (loss) in equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in the consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. (j) Revenue recognition The Company recognizes revenue at the time of delivery to customers. The revenue for shipments in-transit is recorded as deferred revenue. The Company's general policy is to allow customers to return merchandise for up to thirty days after the date of shipment. An allowance for returned merchandise is provided at the time revenue is recorded as a percentage of sales based on historical experience. The total reduction in net revenue due to returns for the years ended December 31, 2017, 2016 and 2015 aggregated to $1,811 million , $1,815 million and $1,939 million , respectively. A summary of activity in the allowance for sales returns, recorded on a net margin basis, was as follows: (in millions) Balance Additions- Deductions Balance 2017 $ 93 982 (979 ) 96 2016 103 1,010 (1,020 ) 93 2015 109 1,213 (1,219 ) 103 The Company evaluates the criteria for reporting revenue gross as a principal versus net as an agent, in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, the Company is the primary obligor in the arrangement, has inventory risk, has latitude in establishing the selling price and selecting suppliers, and accordingly, records revenue gross. Sales and use taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net revenue in the consolidated statements of operations. (k) Cost of goods sold Cost of goods sold primarily includes actual product cost, provision for obsolete inventory, buying allowances received from suppliers, shipping and handling costs and warehouse costs. (l) Advertising costs Advertising costs are expensed as incurred. Advertising costs amounted to $86 million , $84 million and $87 million for the years ended December 31, 2017, 2016 and 2015 , respectively. These costs were included in selling, general and administrative expenses in the consolidated statements of operations. (m) Stock-based compensation As described in note 10, the Company and Liberty have granted certain stock-based awards to employees of the Company. The Company measures the cost of employee services received in exchange for an award of equity instruments (such as stock options and restricted stock) based on the grant-date fair value of the award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Stock-based compensation expense is included in selling, general and administrative expenses in the consolidated statements of operations. (n) Impairment of long-lived assets The Company reviews long-lived assets, such as property and equipment, internally developed software and purchased intangibles subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Impairment charges are recognized as an acceleration of depreciation expense or amortization expense in the consolidated statements of operations. (o) Derivatives The Company accounts for derivatives and hedging activities in accordance with standards issued by the Financial Accounting Standards Board ("FASB"), which requires that all derivative instruments be recorded on the balance sheet at their respective fair values. Fair value is based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. For derivatives designated as hedges, changes in the fair value are either offset against the changes in fair value of the designated hedged item through earnings or recognized in accumulated other comprehensive loss until the hedged item is recognized in earnings. The Company generally enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge are recorded in accumulated other comprehensive loss to the extent that the derivative is effective as a hedge, until earnings are affected by the variability in cash flows of the designated hedged item. The ineffective portion of the change in fair value of a derivative instrument that qualifies as a cash flow hedge is reported in earnings. (p) Income taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other (expense) income in the consolidated statements of operations. (q) Noncontrolling interest The Company reports the noncontrolling interest of QVC-Japan within equity in the consolidated balance sheets and the amount of consolidated net income attributable to the noncontrolling interest is presented in the consolidated statements of operations. (r) Business acquisitions Acquired businesses are accounted for using the acquisition method of accounting, which requires the Company to record assets acquired and liabilities assumed at their respective fair values with the excess of the purchase price over estimated fair values recorded as goodwill. The assumptions made in determining the fair value of acquired assets and assumed liabilities as well as asset lives can materially impact the results of operations. The Company obtains information during due diligence and through other sources to establish respective fair values. Examples of factors and information that the Company uses to determine the fair values include tangible and intangible asset evaluations and appraisals and evaluations of existing contingencies and liabilities. If the initial valuation for an acquisition is incomplete by the end of the quarter in which the acquisition occurred, the Company will record a provisional estimate in the financial statements. The provisional estimate will be finalized as soon as information becomes available, but not later than one year from the acquisition date. (s) Investment in affiliate The Company holds an investment in China that is accounted for using the equity method. The equity method of accounting is used when the Company exercises significant influence, but does not have operating control, generally assumed to be 20%-50% ownership. Under the equity method, original investments are recorded at cost and adjusted by their share of undistributed earnings or losses of these companies. The excess of the Company's cost on its underlying interest in the net assets of the affiliate is allocated to identifiable intangible assets and goodwill. Equity investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. On July 4, 2012, the Company entered into a joint venture with CNR for a 49% interest in CNRS. The CNRS joint venture is accounted for as an equity method investment as a component of other noncurrent assets on the consolidated balance sheets and equity in losses of investee in the consolidated statements of operations. CNRS operates a retailing business in China through a televised shopping channel with an associated website. CNRS is headquartered in Beijing, China. The joint venture's strategy is to combine CNRS' knowledge of the digital shopping market and consumers in China with QVC's global experience and know-how in multimedia retailing. The current investment in CNRS is approximately $40 million classified within other noncurrent assets on the consolidated balance sheet. (t) Use of estimates in the preparation of consolidated financial statements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated 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, medical and other benefit related costs, depreciable lives of fixed assets, internally developed software, valuation of acquired intangible assets and goodwill, income taxes and stock-based compensation. (u) Recent accounting pronouncements On May 28, 2014, 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 and 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 which clarifies principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016-10 which clarifies the identification of performance obligations and the implementation guidance for licensing, and in May 2016, the FASB issued ASU No. 2016-12 which clarifies assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The updated guidance also requires additional disclosures regarding the nature, timing and uncertainty of the Company's revenue transactions. The Company will adopt the accounting guidance in the first quarter of 2018 with a cumulative adjustment that will increase retained earnings approximately $14 million using the modified transition method. The Company has completed their review of the applicable ASU and 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. The Company has also concluded that it will continue to act as principal in certain vendor arrangements and will recognize credit card income for its QVC-branded credit card as part of net revenue. At the current time, the credit card income is included as an offset to selling, general and administrative expenses. In addition, the Company's balance sheet presentation of its sales return reserve will change to present a separate return asset and liability, instead of the net presentation currently used. The Company will also 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. 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 Company plans to adopt this standard during the first quarter of 2018 and does not expect that the adoption will have a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which revises the accounting 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. While the Company is currently evaluating the effect that the updated standard will have on its ongoing financial reporting, it expects that the operating leases listed in note 9 - Leases to the accompanying consolidated financial statements will be recognized as right-of-use assets and operating lease liabilities on the consolidated balance sheets upon adoption of the new standard. 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 will adopt this ASU beginning January 1, 2018 and does not expect that the adoption will have a material effect on its 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 plans to adopt this standard during the first quarter of 2018 and does not expect that the adoption will have a material effect on its consolidated financial statements. 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 plans to adopt this standard during the first quarter of 2018 and does not expect that the adoption will have a material effect on its 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 adopted this standard during the fourth quarter of 2017 and there was no significant effect of the standard on its financial reporting. 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 plans to adopt this standard during the first quarter of 2018 and does not expect that the adoption will have a material effect on its consolidated financial statements. (v) Reclassifications Certain prior period amounts have been reclassified to conform with current period presentation. For the year ended December 31, 2016, certain amounts within the deferred tax liability table in note 11 - Income Taxes were reclassified in order to conform with current period presentation. |
Accounts Receivable Accounts Re
Accounts Receivable Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | Accounts Receivable The Company has two credit programs, the QVC Easy-Pay Plan offered in the U.S., Germany, the U.K., and Italy (known as Q-Pay in Germany and Italy) and the QVC-U.S. revolving credit card program. The QVC Easy-Pay Plan permits customers to pay for items in two or more installments. When the QVC Easy-Pay Plan is offered by QVC and elected by the customer, the first installment is typically billed to the customer's credit card upon shipment. Generally, the customer's credit card is subsequently billed up to five additional monthly installments until the total purchase price of the products has been billed by the Company. In 2014, QVC-U.S. amended and restated its agreement with a large consumer financial services company (the "Bank") pursuant to which the Bank provides revolving credit directly to QVC's customers for the sole purpose of purchasing merchandise or services with a QVC branded credit card ("Q Card"). The agreement with the Bank was amended and restated in March 2017. The Company receives a portion of the net economics of the credit card program. The Company cannot predict the extent to which customers will use the Q Card, nor the extent that they will make payments on their outstanding balances. The net amount of finance income resulting from credit card operations is included as a reduction of selling, general and administrative expenses and was $105 million , $100 million and $92 million for the years ended December 31, 2017, 2016 and 2015 , respectively. The Company also accepts major credit cards for its sales. Accounts receivable from major credit cards represents amounts owed to QVC from the credit card clearing houses for amounts billed but not yet collected. Accounts receivable consisted of the following: December 31, (in millions) 2017 2016 QVC Easy-Pay plan $ 1,151 1,054 Major credit cards and customers 263 221 Other receivables 65 68 1,479 1,343 Less allowance for doubtful accounts (91 ) (97 ) Accounts receivable, net $ 1,388 1,246 A summary of activity in the allowance for doubtful accounts was as follows (in millions): (in millions) Balance Additions- Deductions- Balance 2017 $ 97 72 (78 ) 91 2016 86 107 (96 ) 97 2015 91 82 (87 ) 86 The carrying value of accounts receivable, adjusted for the reserves described above, approximates fair value as of December 31, 2017, 2016 and 2015 |
Property and Equipment, Net Pro
Property and Equipment, Net Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Property and equipment, net | Property and Equipment, Net Property and equipment consisted of the following: December 31, Estimated (in millions) 2017 2016 life Land $ 85 81 N/A Buildings and improvements 1,100 1,048 8 - 20 years Furniture and other equipment 497 447 2 - 8 years Broadcast equipment 134 135 3 - 5 years Computer equipment 160 146 2 - 4 years Transponders and terrestrial transmitter (note 9) 170 150 8 - 15 years Projects in progress 33 28 N/A 2,179 2,035 Less: accumulated depreciation (1,174 ) (1,004 ) Property and equipment, net $ 1,005 1,031 Disposal of assets reduced property and equipment by $40 million and $65 million for the years ended December 31, 2017 and 2016 , respectively. |
Television Distribution Rights,
Television Distribution Rights, Net | 12 Months Ended |
Dec. 31, 2017 | |
Television Distribution Rights [Abstract] | |
Schedule of television distribution rights | Television distribution rights consisted of the following: (in millions) 2017 2016 Television distribution rights $ 730 2,279 Less accumulated amortization (652 ) (2,096 ) Television distribution rights, net $ 78 183 Television Distribution Rights, Net Television distribution rights consisted of the following: (in millions) 2017 2016 Television distribution rights $ 730 2,279 Less accumulated amortization (652 ) (2,096 ) Television distribution rights, net $ 78 183 The Company enters into affiliation agreements with television providers for carriage of the Company's shopping service, as well as for certain channel placement. If these television providers were to add additional subscribers to the agreement through acquisition, the Company may be required to make additional payments. The Company's ability to continue to sell products to its customers is dependent on its ability to maintain and renew these affiliation agreements. In some cases, renewals are not agreed upon prior to the expiration of a given agreement while the programming continues to be carried by the relevant distributor without an effective agreement in place. The Company does not have distribution agreements with some of the cable operators that carry its programming. Television distribution rights are amortized using the straight-line method over the lives of the individual agreements. The remaining weighted average lives of the television distribution rights was approximately 2.9 years at December 31, 2017 . Amortization expense for television distribution rights was $157 million , $193 million and $189 million for the years ended December 31, 2017, 2016 and 2015 , respectively. The decrease in the gross presentation of television distribution rights and the related accumulated amortization at December 31, 2017 is primarily due to the end of the useful lives of television distribution rights in place at the time of Liberty's acquisition of QVC in 2003. As of December 31, 2017 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): 2018 $ 44 2019 20 2020 9 2021 3 2022 2 In return for carrying QVC's signals, each programming distributor in the U.S. receives an allocated portion, based upon market share, of up to 5% of the net sales of merchandise sold via the television programs and from certain internet sales to customers located in the programming distributors' service areas. In Germany, Japan, the U.K., Italy and France, programming distributors predominately receive an agreed-upon annual fee, a monthly fee per subscriber regardless of the net sales, a variable percentage of net sales or some combination of the above arrangements. The Company recorded expense related to these commissions of $298 million for each of the years ended December 31, 2017 and 2016 and $293 million for the year ended December 31, 2015 , which is included as part of operating expenses in the consolidated statements of operations. |
Other Intangible Assets, Net
Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Other Intangible Assets [Abstract] | |
Intangible assets disclosure | Other Intangible Assets, Net Other intangible assets consisted of the following: December 31, 2017 2016 Weighted average remaining life (years) (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 710 (548 ) 162 646 (466 ) 180 2.1 Affiliate and customer relationships 2,419 (2,409 ) 10 2,397 (2,274 ) 123 2.8 Debt origination fees 8 (3 ) 5 8 (1 ) 7 3.4 Trademarks (indefinite life) 2,428 — 2,428 2,428 — 2,428 N/A $ 5,565 (2,960 ) 2,605 5,479 (2,741 ) 2,738 2.2 N/A - Not applicable. Disposal of assets reduced other intangible assets by $20 million and $52 million for the years ended December 31, 2017 and 2016 , respectively. Amortization expense for other intangible assets was $207 million , $270 million and $265 million for the years ended December 31, 2017, 2016 and 2015 , respectively. As of December 31, 2017 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): 2018 $ 93 2019 57 2020 26 2021 1 2022 — |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities [Abstract] | |
Accrued liabilities | Accrued Liabilities Accrued liabilities consisted of the following: December 31, (in millions) 2017 2016 Accounts payable non-trade $ 279 215 Income taxes 128 120 Accrued compensation and benefits 119 92 Allowance for sales returns 96 93 Sales and other taxes 71 62 Deferred revenue 58 69 Accrued interest 58 58 Other 63 60 $ 872 769 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt disclosure | Long-Term Debt and Capital Lease Obligations Long-term debt and capital lease obligations consisted of the following: December 31, (in millions) 2017 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 1,496 1,596 Capital lease obligations 68 69 Build to suit lease obligation 101 105 Less debt issuance costs, net (22 ) (28 ) Total debt and capital lease obligations 5,190 5,289 Less current portion (17 ) (14 ) Long-term portion of debt and capital lease obligations $ 5,173 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 the senior secured credit facility. The interest on all of QVC's senior secured notes is payable semi-annually. (a) 3.125% Senior Secured Notes due 2019 On March 18, 2014, QVC issued $400 million principal amount of 3.125% Senior Secured Notes due 2019 at an issue price of 99.828% . The net proceeds from the offerings of these notes were used to repay indebtedness under QVC’s senior secured credit facility and for working capital and other general corporate purposes. (b) 5.125% Senior Secured Notes due 2022 On July 2, 2012, QVC issued $500 million principal amount of 5.125% Senior Secured Notes due 2022 at par. The net proceeds from the offerings of these notes were used to repay indebtedness under QVC’s senior secured credit facility and for working capital and other general corporate purposes. (c) 4.375% Senior Secured Notes due 2023 On March 18, 2013, QVC issued $750 million principal amount of 4.375% Senior Secured Notes due 2023 at an issue price of 99.968% . The net proceeds from the offerings of these notes were used to reduce the outstanding principal of previously outstanding notes and the senior secured credit facility, as well as for general corporate purposes. (d) 4.85% Senior Secured Notes due 2024 On March 18, 2014, QVC issued $600 million principal amount of 4.85% Senior Secured Notes due 2024 at an issue price of 99.927% . The net proceeds from the offerings of these notes were used to repay indebtedness under QVC’s senior secured credit facility and for working capital and other general corporate purposes. (e) 4.45% Senior Secured Notes due 2025 On August 21, 2014, QVC issued $600 million principal amount of 4.45% Senior Secured Notes due 2025 at an issue price of 99.860% . The net proceeds from the offerings of these notes were used for the redemption of previously outstanding notes, for working capital and other general corporate purposes. (f) 5.45% Senior Secured Notes due 2034 On August 21, 2014, QVC issued $400 million principal amount of 5.45% Senior Secured Notes due 2034 at an issue price of 99.784% . The net proceeds from the offerings of these notes were used for the redemption of previously outstanding notes, for working capital and other general corporate purposes. (g) 5.95% Senior Secured Notes due 2043 On March 18, 2013, QVC issued $300 million principal amount of 5.95% Senior Secured Notes due 2043 at an issue price of 99.973% . The net proceeds from the offerings of these notes were used to reduce the principal of previously outstanding notes and the senior secured credit facility, as well as for general corporate purposes. 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 note 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 (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 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 $877 million available under the terms of the senior secured credit facility at December 31, 2017 , including the portion available under the $400 million tranche that zulily may also borrow on. The interest rate on the senior secured credit facility was 3.0% at December 31, 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 , 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 QVC’s equity interests. In addition, 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 zulily and 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 consolidated statements of operations. At December 31, 2017 and 2016 , 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 On April 15, 2015, QVC completed the redemption of previously outstanding senior secured notes which resulted in a loss on extinguishment of $21 million . No such transaction occurred in the years ended December 31, 2017 and 2016 . QVC was in compliance with all of its debt covenants at December 31, 2017 . During the year ended December 31, 2017 , there were no significant changes to QVC's debt credit ratings. The weighted average interest 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 4.2% as of December 31, 2017 . At December 31, 2017 and 2016 , outstanding trade letters of credit totaled $16 million and $18 million , respectively. |
Leases and Transponder Service
Leases and Transponder Service Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Leases and Transponder Service Agreements [Abstract] | |
Leases of lessee disclosure | Leases Future minimum payments under noncancelable operating leases and capital 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 December 31, 2017 consisted of the following: (in millions) Capital leases Operating leases Build to suit lease 2018 $ 15 21 5 2019 15 16 6 2020 12 13 6 2021 12 10 6 2022 8 7 6 Thereafter 10 73 58 Total $ 72 140 87 The Company distributes its television programs, via satellite and optical fiber, to cable television and direct-to-home satellite system operators for retransmission to its subscribers in the U.S., Germany, Japan, the U.K., France and neighboring countries. The Company also transmits its television programs over digital terrestrial broadcast television to viewers throughout Italy, Germany, and the U.K. and to viewers in certain geographic regions in the U.S. In the U.S., the Company uplinks its digital programming transmissions using a third party service. The transmissions are uplinked to protected, non-preemptible transponders on U.S. satellites. "Protected" status means that, in the event of a transponder failure, QVC's signal will be transferred to a spare transponder or, if none is available, to a preemptible transponder located on the same satellite or, in certain cases, to a transponder on another satellite owned by the same service provider if one is available at the time of the failure. "Non-preemptible" status means that, in the event of a transponder failure, QVC's transponders cannot be preempted in favor of a user of a failed transponder, even another user with "protected status." The Company's international business units each obtain uplinking services from third parties and transmit their programming to non-preemptible transponders on international satellites and terrestrial transmitters. QVC's transponder service agreements for the Company's U.S. transponders expire at the earlier of the end of the lives of the satellites or the service agreements. 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 . The Company also is party to a capital lease agreement for data processing hardware. Depreciation expense related to the capital leases was $13 million for the year ended December 31, 2017 and $12 million for each of the years ended December 31, 2016 and 2015. Total future minimum capital lease payments of $72 million include $4 million of imputed interest. The transponder service agreements for our U.S. transponders expire between 2018 and 2023 . The service agreements for our international transponders and terrestrial transmitters 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 $23 million for the year ended December 31, 2017 and $24 million for each of years ended December 31, 2016 and 2015 , 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 a year, increasing to approximately $8 million a year by the final year of the initial term, as well as all real estate taxes and other building operating costs. QVC also has an option to extend the term of the Lease for up to two consecutive terms of 10 years each. QVC has the right to 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. The Company incurred construction costs of $89 million during the year ended December 31, 2016. No such cost were incurred for the year ended December 31, 2017. Refer to note 8 for the build to suit lease obligation as of December 31, 2017 and December 31, 2016, related to the California distribution center. 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. |
Stock Options and Other Share-B
Stock Options and Other Share-Based Awards Stock Options and Other Share- Based Awards | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Other Share-Based Payments | Stock Options and Other Share-Based Payments Certain QVC employees and officers have received stock options (the "Options") and restricted shares in Series A Liberty Interactive common stock ( “QVCA”) and Series A Liberty Ventures common stock ("LVNTA") in accordance with the Liberty Interactive Corporation 2000 Incentive Plan, as amended from time to time; the Liberty Interactive Corporation 2007 Incentive Plan, as amended from time to time; the Liberty Interactive Corporation 2010 Incentive Plan, as amended from time to time; and the Liberty Interactive Corporation 2012 Incentive Plan, as amended from time to time (collectively, the "Liberty Incentive Plan"). (a) Stock options CommerceHub, Inc. Spin-Off In connection with the spin-off of CommerceHub ("CommerceHub Spin-Off") in July 2016, all outstanding awards with respect to Liberty Ventures common stock as of the record date for the CommerceHub Spin-Off (“Liberty Ventures Award”) were adjusted pursuant to the anti-dilution provisions of the incentive plans under which the equity awards were granted, such that: i. A holder of a Liberty Ventures Award who was a member of the board of directors or an officer of Liberty holding the position of Vice President or above received (i) an adjustment to the exercise price and the number of shares subject to the Liberty Ventures Award (as so adjusted, an “Adjusted Liberty Ventures Award”) and (ii) a corresponding equity award relating to shares of the corresponding series of CommerceHub common stock, as well as Series C CommerceHub common stock (in each case, a “CommerceHub Award”); and ii. Each other holder of a Liberty Ventures Award received only an adjustment to the exercise price and the number of shares subject to the Liberty Ventures Award (also referred to as an “Adjusted Liberty Ventures Award”). The exercise prices and number of shares subject to the Adjusted Liberty Ventures Awards and the CommerceHub Awards were determined based on (1) the exercise prices and number of shares subject to the Liberty Ventures Award, (2) the distribution ratios used in the CommerceHub Spin-Off, (3) the pre-CommerceHub Spin-Off trading price of the Liberty Ventures common stock and (4) the post-CommerceHub Spin-Off trading prices of Liberty Ventures common stock and CommerceHub common stock, such that all of the pre-CommerceHub Spin-Off intrinsic value of the Liberty Ventures Award was allocated between the Adjusted Liberty Ventures Award and the CommerceHub Award, or fully to the Adjusted Liberty Ventures Award. Following the CommerceHub Spin-Off, employees of QVC may hold Awards in both Liberty Ventures common stock and CommerceHub common stock. The compensation expense relating to employees of QVC is recorded at QVC. Liberty Expedia Holdings, Inc. Split-Off In connection with the split-off of Liberty Expedia Holdings, Inc. (“Expedia Holdings”) from Liberty (the “Expedia Holdings Split-Off”) in November 2016, all outstanding Awards with respect to Liberty Ventures common stock (a “Liberty Ventures Award”) were adjusted pursuant to the anti-dilution provisions of the incentive plans under which the equity awards were granted, such that a holder of a Liberty Ventures Award received: i. An adjustment to the exercise price and the number of shares subject to the Liberty Ventures Award (as so adjusted, an Adjusted Liberty Ventures Award) and ii. A corresponding equity award relating to shares of the corresponding series of Expedia Holdings common stock (an “Expedia Holdings Award”) The exercise prices of and number of shares subject to the new Expedia Holdings Award and the Adjusted Liberty Ventures Award were determined based on (1) the exercise price and number of shares subject to the original Liberty Ventures Award, (2) the redemption ratios used in the Expedia Holdings Split-Off, (3) the pre-Expedia Holdings Split-Off trading price of Liberty Ventures common stock and (4) the relative post-Expedia Holdings Split-Off trading prices of Liberty Ventures common stock and Expedia Holdings common stock, such that the pre-Expedia Holdings Split-Off intrinsic value of the original Liberty Ventures Award was allocated between the new Expedia Holdings Award and the Adjusted Liberty Ventures Award. Following the Expedia Holdings Split-Off, employees of QVC hold Awards in both Liberty Ventures common stock and Expedia Holdings common stock. The compensation expense relating to employees of QVC is recorded at QVC. Except as described above, all other terms of an Adjusted Liberty Ventures Award, a new Expedia Holdings Award and a new CommerceHub Award (including, for example, the vesting terms thereof) are in all material respects, the same as those of the corresponding original Liberty Ventures Award. The adjustments related to the CommerceHub Spin-Off and the Expedia Holdings Split-Off were considered modifications under Accounting Standards Codification ("ASC") 718 - Stock Compensation but did not result in incremental compensation expense. A summary of the activity of the Liberty Incentive Plan with respect to the QVCA Options granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Options Weighted Aggregate Weighted average remaining Outstanding at January 1, 2017 12,536,399 $ 22.80 $ 16,511 4.2 Granted 3,114,919 23.69 Transferred from zulily (1) 12,860 24.13 Exercised (2,857,069 ) 16.74 Forfeited (954,641 ) 26.58 Outstanding at December 31, 2017 11,852,468 24.19 19,663 4.5 Exercisable at December 31, 2017 5,424,770 22.74 17,572 3.5 (1) During year ended December 31, 2017 , employees were transferred to QVC from zulily and are now employed by QVC. The row represents employees' previous grants prior to being a QVC employee. A summary of the activity of the Liberty Incentive Plan with respect to the LVNTA Options granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Options Weighted average exercise Aggregate intrinsic Weighted average remaining Outstanding at January 1, 2017 302,467 $ 16.69 $ 6,104 1.2 Granted — — Exercised (302,467 ) 16.69 Forfeited — — Outstanding at December 31, 2017 — — — — Exercisable at December 31, 2017 — — — — Upon employee exercise of the Options, the exercise price is remitted to Liberty in exchange for the shares. The aggregate intrinsic value of all Options exercised during the years ended December 31, 2017, 2016 and 2015 was $32 million , $28 million and $60 million , respectively. The weighted average fair value at date of grant of a QVCA Option granted during the years ended December 31, 2017, 2016 and 2015 was $7.86 , $7.84 and $11.20 , respectively. There were no LVNTA Options granted during the years ended December 31, 2017, 2016 and 2015 . During the years ended December 31, 2017, 2016 and 2015 , the fair value of each QVCA Option was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: 2017 2016 2015 Expected volatility 30.3 % 27.4 % 39.7 % Expected term (years) 5.9 6.1 5.9 Risk free interest rate 2.1 % 1.6 % 1.7 % Expected dividend yield — — — Expected volatility is based on historical and implied volatilities of QVCA common stock over a period commensurate with the expected term of the options. The Company estimates the expected term of the options based on historical exercise and forfeiture data. The volatility used in the calculation for the Options is based on the historical volatility of Liberty's stocks and the implied volatility of publicly traded Liberty Options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject Options. The fair value of the Options is recognized as expense over the requisite service period. During the years ended December 31, 2017, 2016 and 2015 , the Company recorded $21 million , $21 million and $24 million , respectively, of stock-based compensation expense related to the Options. As of December 31, 2017 , the total unrecognized compensation cost related to unvested Options was approximately $44 million . Such amount will be recognized in the Company's consolidated statement of operations over a weighted average period of approximately 2.7 years . (b) Restricted stock plan A summary of the activity of the Liberty Incentive Plan with respect to the QVCA restricted shares granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Restricted shares Weighted average Outstanding at January 1, 2017 907,826 $ 26.65 Granted 677,376 22.49 Transferred from zulily (1) 21,630 25.16 Vested (391,330 ) 25.98 Forfeited (127,526 ) 25.72 Outstanding at December 31, 2017 1,087,976 24.38 (1) During year ended December 31, 2017 , employees were transferred to QVC from zulily and are now employed by QVC. The row represents employees' previous grants prior to being a QVC employee. A summary of the activity of the Liberty Incentive Plan with respect to the LVNTA restricted shares granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Restricted shares Weighted Outstanding at January 1, 2017 13,892 $ 46.57 Granted — — Vested (9,153 ) 44.14 Forfeited (678 ) 50.01 Outstanding at December 31, 2017 4,061 51.47 During the years ended December 31, 2017, 2016 and 2015 , the Company recorded $10 million , $11 million and $7 million , respectively, of stock-based compensation expense related to these shares. As of December 31, 2017 , the total unrecognized compensation cost related to unvested restricted shares of common stock was approximately $17 million . Such amount will be recognized in the Company's consolidated statement of operations over a weighted average period of approximately 2.4 years . Fair value of restricted shares is calculated based on the market price on the day of the granted shares. The weighted average grant date fair value of the QVCA restricted shares granted to QVC employees and officers during the years ended December 31, 2017, 2016 and 2015 was $22.49 , $25.86 , and $29.22 , respectively. There have been no LVNTA restricted shares granted to QVC employees and officers during the years ended December 31, 2017, 2016 and 2015 . The aggregate fair value of all restricted shares of common stock that vested during the years ended December 31, 2017, 2016 and 2015 was $10 million , $8 million and $7 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income Taxes On December 22, 2017, new U.S. federal tax legislation, the Tax Cuts and Jobs Act (the “Act”) was enacted. The new legislation was a significant modification of existing U.S. federal tax law and contains a number of provisions which impacted the tax position of the Company in 2017 and will impact the Company’s tax position in future years. These changes include the reduction of the federal corporate tax rate from 35% to 21% , the rules related to a one-time tax on unremitted foreign earnings in 2017, and an increase in the bonus depreciation allowance on certain qualified property. In connection with unremitted foreign earnings, the Company has performed an evaluation of its earnings and profits of its foreign subsidiaries and has determined that deficits in some of the subsidiaries offset the surpluses in others so that no amount is subject to the mandatory repatriation provision of the Act. Entities are required under ASC 740, Accounting for Income Taxes , to record the effect of the change in the period of enactment and to recognize the change as a discrete item in income tax expense from continuing operations. There are other provisions of the Act which, when they become effective, could impact the Company’s tax expense in future years. These include changes in how foreign earnings are taxed in the U.S., specifically, the participation exemption for certain foreign earnings, the inclusion and related deduction for global intangible low-taxed income (“GILTI”), the limitation on the deduction of net interest expense and other changes. The Company is in the process of analyzing the effects of these provisions and will reflect the impact as they become effective. Income tax expense (benefit) consisted of the following: Years ended December 31, (in millions) 2017 2016 2015 Current: U.S. federal $ 361 326 384 State and local 28 29 20 Foreign jurisdictions 87 73 75 Total 476 428 479 Deferred: U.S. federal (317 ) (31 ) (86 ) State and local (7 ) (8 ) 3 Foreign jurisdictions — (4 ) (7 ) Total (324 ) (43 ) (90 ) Total income tax expense $ 152 385 389 Pre-tax income was as follows: Years ended December 31, (in millions) 2017 2016 2015 QVC-U.S. $ 915 859 909 QVC-International 209 168 142 Consolidated QVC $ 1,124 1,027 1,051 Total income tax expense differs from the amounts computed by applying the U.S. federal income tax rate of 35% in effect in 2017, as a result of the following: Years ended December 31, 2017 2016 2015 Provision at statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.0 % 1.3 % 1.4 % Foreign taxes — % (0.3 )% 0.2 % Foreign earnings repatriation — % 0.2 % 0.2 % Valuation allowance 1.0 % 1.0 % 0.9 % Permanent differences (2.1 )% (0.6 )% (0.2 )% Impact of Tax Cuts and Jobs Act (25.4 )% — % — % Investment in subsidiary 3.9 % — % — % Impact of foreign currency tax regulation 0.4 % 1.0 % — % Other, net (0.3 )% (0.1 )% (0.5 )% Total income tax expense 13.5 % 37.5 % 37 % The Company has remeasured its deferred tax assets and liabilities to reflect the reduced federal income tax rate of 21% which became effective on January 1, 2018. As a result of the remeasurement, the Company recorded an income tax benefit of $284.6 million through operations. This non-cash tax benefit is primarily attributed to the remeasurement at the new lower federal tax rate of deferred tax liabilities related to non-current intangible assets. The tax effects of temporary differences that gave rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below: December 31, (in millions) 2017 2016 Deferred tax assets: Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts $ 21 38 Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986 25 36 Allowance for sales returns 24 36 Deferred revenue 29 41 Deferred compensation 20 30 Unrecognized federal and state tax benefits 11 23 Net operating loss carryforwards 33 22 Accrued liabilities 30 38 Other — 6 Subtotal 193 270 Valuation allowance (33 ) (22 ) Total deferred tax assets 160 248 Deferred tax liabilities: Depreciation and amortization (584 ) (1,009 ) Cumulative translation of foreign currencies (17 ) (13 ) Investment in subsidiary (28 ) (4 ) Other (4 ) — Total deferred tax liabilities (633 ) (1,026 ) Net deferred tax liability $ (473 ) (778 ) In the above table, valuation allowances exist due to the uncertainty of whether or not the benefit of certain net operating losses will ultimately be utilized for income tax purposes. The Company adopted ASU No. 2016-09, Compensation-Stock Compensation (Topic 718); Improvements to Employee Share-Based Payment Accounting, in the third quarter of 2016. In accordance with this guidance, excess tax benefits and tax deficiencies are recognized as income tax benefit or expense rather than as additional paid-in capital. The recognition of excess tax benefits and deficiencies are applied prospectively from January 1, 2016. Pursuant to the adoption of ASU No. 2016-09, the Company recognized a tax benefit reflected in income tax of $9 million and $7 million for 2017 and 2016, respectively. The amount of the tax benefit for 2015 reflected in additional paid-in capital is reported in the consolidated statement of equity. The Company is 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. These differences are related primarily to foreign tax credits recognized by QVC that are creditable under the Tax Agreement when and if utilized in Liberty’s consolidated tax return. The differences recorded during the years ended December 31, 2017 and 2015, were $31 million and $18 million , respectively, in capital contributions and related primarily to foreign tax credit carryovers being utilized in Liberty's consolidated tax return in excess of those recognized by QVC during the respective tax years. The differences recorded during the year ended December 31, 2016 was a $64 million dividend and related primarily to foreign tax credits recognized by QVC and not utilized in Liberty’s tax return during the tax year. The amounts of the tax-related balance due to Liberty at December 31, 2017 and 2016 were $60 million and $75 million , respectively, and are included in accrued liabilities in the consolidated balance sheets. A reconciliation of the 2017 beginning and ending amount of the liability for unrecognized tax benefits is as follows: (in millions) Balance at January 1, 2017 $ 55 Increases related to prior year tax positions 1 Decreases related to prior year tax positions (8 ) Decreases related to settlements with taxing authorities (4 ) Increases related to current year tax positions 6 Balance at December 31, 2017 $ 50 Included in the balance of unrecognized tax benefits at December 31, 2017 are potential benefits of $39 million (net of an $ 11 million federal tax effect) that, if recognized, would affect the effective rate on income from continuing operations. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other(expense) income in the consolidated statements of operations. The Company did not have a material amount of interest accrued related to unrecognized tax benefits or tax penalties. The Company has tax positions for which the amount of related unrecognized tax benefits could change during 2018 . These consist of nonfederal tax issues. The amount of unrecognized tax benefits related to these issues could have a net decrease of $1 million in 2018 as a result of potential settlements, lapsing of statute of limitations and revisions of settlement estimates. The Company participates in a consolidated federal return filing with Liberty. As of December 31, 2017, the Company's tax years through 2013 are closed for federal income tax purposes, and the IRS has completed its examination of the Company's 2014, 2015 and 2016 tax years. The Company's 2017 tax year is being examined currently as part of the Liberty consolidated return under the IRS's Compliance Assurance Process program. The Company, or one of its subsidiaries, files income tax returns in various states and foreign jurisdictions. As of December 31, 2017, certain of the Company’s subsidiaries were under examination in Germany for 2012 through 2014. As of December 31, 2017, the Company, or one of its subsidiaries was under examination in the states of California, Delaware, New York and Pennsylvania. No material assessments have resulted from these audits as of that date. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 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 consolidated financial statements. Network and information systems, including the Internet and telecommunication systems, third party delivery services and other technologies are critical to QVC's business activities. Substantially all of QVC's 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, the Company could face a significant disruption in fulfilling QVC's customer orders and shipment of QVC's products. The Company has active disaster recovery programs in place to help mitigate risks associated with these critical business activities. |
Related Party Transactions (Not
Related Party Transactions (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions On October 1, 2015, Liberty acquired all of the outstanding shares of zulily. zulily is an online retailer offering customers a fun and entertaining shopping experience with a fresh selection of new product styles launched each day. zulily is attributed to the QVC Group and the Company believes that zulily's business is complementary to the Company. zulily is not part of the results of operations or financial position of QVC presented in these consolidated financial statements. During the years ended December 31, 2017, 2016 and 2015 , 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 $9 million for the year ended December 31, 2017 , $12 million for the year ended December 31, 2016 and less than $1 million for the year ended December 31, 2015, which did not have a material impact on QVC's financial position, results of operations, or liquidity. Additionally, on June 23, 2016, QVC amended and restated its senior secured credit facility by entering into the Third Amended and Restated Credit Agreement adding a tranche that allows joint borrowing capacity for either QVC or zulily and increasing the revolving credit facility from $2.25 billion to $2.65 billion as explained further in note 8. 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 December 31, 2017, there was $267 million borrowed by zulily on the $400 million tranche of the senior secured credit facility, none of which the Company expects to repay on behalf of zulily. In addition, zulily had $10 million outstanding in standby letters of credit as of December 31, 2017. On December 29, 2017, Liberty completed the acquisition of the remaining 62% ownership interest of HSN in an all-stock transaction. HSN is an interactive multi-channel retailer that markets and sells a wide range of third party and proprietary merchandise directly to consumers through various platforms. HSN is attributed to the QVC Group and is not part of the results of operations or financial position of QVC presented in these consolidated financial statements. QVC and HSN are beginning to engage in transactions relating to sales, sourcing of merchandise, marketing initiatives, business advisory services and software development. There were no material transactions for the year ended December 31, 2017. QVC engages with CommerceHub, which was an approximately 99% owned subsidiary of Liberty prior to the completion of its spin-off from Liberty in July 2016, to handle communications between QVC and certain of its vendors for drop ship sales and returns. CommerceHub is not part of the results of operations or financial position of QVC presented in these consolidated financial statements. During each of the years ended December 31, 2017, 2016 and 2015 , QVC paid CommerceHub for the related services totaling less than $3 million , which did not have a material impact on QVC's financial position, results of operations, or liquidity. On July 22, 2016, Liberty completed the CommerceHub Spin-Off. As a result, Liberty and CommerceHub are now separate publicly traded companies. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 12 Months Ended |
Dec. 31, 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 December 31, 2017 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 42 42 — — Non-current assets: Interest rate swap arrangements (note 8) 2 — 2 — Long-term liabilities: Debt (note 8) 5,132 — 5,132 — Fair value measurements at December 31, 2016 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 113 113 — — Non-current assets: Interest rate swap arrangements (note 8) 2 — 2 — Long-term liabilities: Debt (note 8) 5,092 — 5,092 — 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. QVC entered into a 500 million Euro basis swap as a hedge of a net investment in a foreign subsidiary during the fourth quarter of 2015 and the underlying derivative matured on March 15, 2016. The purpose of this hedge was to protect QVC's investment in the foreign subsidiary against the variability of the U.S. Dollar and Euro exchange rate. The Company entered into a similar hedge of the same net investment in a foreign subsidiary effective March 15, 2016 which subsequently matured on September 15, 2016. Effective September 15, 2016, the Company entered into a foreign exchange forward contract with the same purpose as the previous hedges. The forward contract entailed QVC's sale of 500 million Euro at a forward rate which matured on December 19, 2016. The gain is recognized in other comprehensive income. |
Information about QVC's Operati
Information about QVC's Operating Segments | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment reporting disclosure | Information about QVC's Operating Segments and Geographical Data During the year ended December 31, 2015, QVC began reporting its results based on two operating segments: QVC-U.S. and QVC-International, as a result of the One Q Reorganization Plan ("One Q"). The One Q organizational structure is intended to allow the Company to better leverage its global scale and capabilities, to enhance its competitive position and to create operational efficiencies. Beginning in the first quarter of 2016, QVC began allocating certain additional corporate costs for management reporting purposes, which were historically included in its QVC-U.S. segment, to the QVC-International segment. These management cost allocations are related to certain functions such as merchandising, commerce platforms, information technology, human resources, legal, finance, brand and communications, corporate development and administration that support all of QVC’s operations. For the years ended December 31, 2017 and 2016 , these costs totaled approximately $36 million and $31 million , respectively. No adjustments were made relating to these costs for the year ended December 31, 2015 . 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). QVC-U.S and QVC-International are retailers of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised-shopping programs as well as via the Internet and mobile applications in certain markets. The Company 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, and cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. GAAP. Performance measures Years ended December 31, 2017 2016 2015 (in millions) Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 6,140 1,446 6,120 1,435 6,257 1,467 QVC-International 2,631 451 2,562 405 2,486 427 Consolidated QVC $ 8,771 1,897 8,682 1,840 8,743 1,894 Net revenue amounts by product category are not available from QVC's general purpose financial statements. Other information Years ended December 31, 2017 2016 2015 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 93 330 78 414 63 404 QVC-International 62 34 64 49 71 50 Consolidated QVC $ 155 364 142 463 134 454 Years ended December 31, 2017 2016 (in millions) Total Capital Total Capital QVC-U.S. $ 9,429 116 9,595 152 QVC-International 2,121 36 1,950 27 Consolidated QVC $ 11,550 152 11,545 179 Property and equipment, net of accumulated depreciation, by segment were as follows: December 31, (in millions) 2017 2016 QVC-U.S. $ 559 594 QVC-International 446 437 Consolidated QVC $ 1,005 1,031 The following table provides a reconciliation of Adjusted OIBDA to income before income taxes: Years ended December 31, (in millions) 2017 2016 2015 Adjusted OIBDA $ 1,897 1,840 1,894 Stock-based compensation (31 ) (32 ) (31 ) Depreciation and amortization (519 ) (605 ) (588 ) Equity in losses of investee (3 ) (6 ) (9 ) Gains on financial instruments — 2 — Interest expense, net (214 ) (210 ) (208 ) Foreign currency (loss) gain (6 ) 38 14 Loss on extinguishment of debt — — (21 ) Income before income taxes $ 1,124 1,027 1,051 The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographic area: Years ended December 31, (in millions) 2017 2016 2015 United States $ 6,140 6,120 6,257 Japan 934 897 808 Germany 899 865 837 United Kingdom 640 654 718 Other countries 158 146 123 Consolidated QVC $ 8,771 8,682 8,743 The following table summarizes property and equipment, net of accumulated depreciation, based on physical location: December 31, (in millions) 2017 2016 United States $ 559 594 Germany 164 153 Japan 143 145 United Kingdom 84 83 Other countries 55 56 Consolidated QVC $ 1,005 1,031 |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2017 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Comprehensive (Loss) Income | 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, 2015 $ (39 ) (39 ) Other comprehensive loss attributable to QVC, Inc. stockholder (101 ) (101 ) Balance at December 31, 2015 (140 ) (140 ) Other comprehensive loss attributable to QVC, Inc. stockholder (84 ) (84 ) Balance at December 31, 2016 (224 ) (224 ) Other comprehensive income attributable to QVC, Inc. stockholder 131 131 Balance at December 31, 2017 $ (93 ) (93 ) The component of other comprehensive income is reflected in QVC's consolidated statements of comprehensive income, net of taxes. The following table summarizes the tax effects related to the component of other comprehensive income: (in millions) Before-tax amount Tax benefit (expense) Net-of-tax amount Year ended December 31, 2017: Foreign currency translation adjustments $ 156 (21 ) 135 Other comprehensive income 156 (21 ) 135 Year ended December 31, 2016: Foreign currency translation adjustments $ (96 ) 13 (83 ) Other comprehensive loss (96 ) 13 (83 ) Year ended December 31, 2015: Foreign currency translation adjustments $ (119 ) 17 (102 ) Other comprehensive loss (119 ) 17 (102 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event Subsequent to December 31, 2017 , QVC declared dividends to Liberty in the amount of $233 million , of which $183 million were paid as of March 1, 2018. As of March 1, 2018, zulily had $283 million outstanding on the shared tranche within the Third Amended and Restated Credit Agreement. |
Guarantor_Non-Guarantor Subsidi
Guarantor/Non-Guarantor Subsidiary Financial Information | 12 Months Ended |
Dec. 31, 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 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 (refer to note 8), QVC International Ltd is no longer a guarantor subsidiary, and is reflected with the combined non-guarantor subsidiaries as of and for the year ended December 31, 2016. These consolidating financial statements have been prepared from the Company's financial information on the same basis of accounting as the Company's 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. With One Q, beginning in 2016, as mentioned in note 15, QVC began allocating certain additional corporate costs for management reporting purposes, which were historically included in its QVC-U.S segment, to the QVC-International segment. 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 consolidated financial statements. Consolidating Balance Sheets December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 33 225 — 260 Restricted cash 5 — 3 — 8 Accounts receivable, net 1,076 — 312 — 1,388 Inventories 758 — 261 — 1,019 Prepaid expenses and other current assets 28 — 23 — 51 Total current assets 1,869 33 824 — 2,726 Property and equipment, net 295 60 650 — 1,005 Television distribution rights, net — 78 — — 78 Goodwill 4,190 — 885 — 5,075 Other intangible assets, net 539 2,048 18 — 2,605 Other noncurrent assets 14 — 47 — 61 Investments in subsidiaries 3,579 1,626 — (5,205 ) — Total assets $ 10,486 3,845 2,424 (5,205 ) 11,550 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 14 — 17 Accounts payable-trade 455 — 301 — 756 Accrued liabilities 366 227 279 — 872 Intercompany accounts payable (receivable) 453 (1,513 ) 1,060 — — Total current liabilities 1,277 (1,286 ) 1,654 — 1,645 Long-term portion of debt and capital lease obligations 5,033 — 140 — 5,173 Deferred income taxes 52 468 (47 ) — 473 Other long-term liabilities 92 — 25 — 117 Total liabilities 6,454 (818 ) 1,772 — 7,408 Equity: QVC, Inc. stockholder's equity 4,032 4,663 542 (5,205 ) 4,032 Noncontrolling interest — — 110 — 110 Total equity 4,032 4,663 652 (5,205 ) 4,142 Total liabilities and equity $ 10,486 3,845 2,424 (5,205 ) 11,550 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 Consolidating Statements of Operations Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,298 1,000 2,848 (1,375 ) 8,771 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 3,877 157 1,744 (180 ) 5,598 Operating 433 265 277 (374 ) 601 Selling, general and administrative, including stock-based compensation 1,097 2 428 (821 ) 706 Depreciation 67 7 81 — 155 Amortization 187 142 35 — 364 5,661 573 2,565 (1,375 ) 7,424 Operating income 637 427 283 — 1,347 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Interest (expense) income, net (215 ) 1 — — (214 ) Foreign currency (loss) gain (5 ) 1 (2 ) — (6 ) Intercompany interest (expense) income (12 ) 96 (84 ) — — (232 ) 98 (89 ) — (223 ) Income before income taxes 405 525 194 — 1,124 Income tax (expense) benefit (129 ) 80 (103 ) — (152 ) Equity in earnings of subsidiaries, net of tax 696 47 — (743 ) — Net income 972 652 91 (743 ) 972 Less net income attributable to the noncontrolling interest (46 ) — (46 ) 46 (46 ) Net income attributable to QVC, Inc. stockholder $ 926 652 45 (697 ) 926 Consolidating Statements of Operations Year ended December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,179 1,001 2,787 (1,285 ) 8,682 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 3,855 169 1,726 (210 ) 5,540 Operating 414 258 274 (340 ) 606 Selling, general and administrative, including stock-based compensation 1,116 1 346 (735 ) 728 Depreciation 57 7 78 — 142 Amortization 245 168 50 — 463 5,687 603 2,474 (1,285 ) 7,479 Operating income 492 398 313 — 1,203 Other (expense) income: Equity in losses of investee — — (6 ) — (6 ) Gain on financial instruments 2 — — — 2 Interest (expense) income, net (211 ) — 1 — (210 ) Foreign currency gain 17 — 21 — 38 Intercompany interest (expense) income (2 ) 1 1 — — (194 ) 1 17 — (176 ) Income before income taxes 298 399 330 — 1,027 Income tax expense (114 ) (156 ) (115 ) — (385 ) Equity in earnings of subsidiaries, net of tax 458 189 — (647 ) — Net income 642 432 215 (647 ) 642 Less net income attributable to the noncontrolling interest (38 ) — (38 ) 38 (38 ) Net income attributable to QVC, Inc. stockholder $ 604 432 177 (609 ) 604 Consolidating Statements of Operations Year ended December 31, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,416 962 2,717 (1,352 ) 8,743 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 4,018 109 1,624 (223 ) 5,528 Operating 338 265 293 (289 ) 607 Selling, general and administrative, including stock-based compensation 1,180 1 404 (840 ) 745 Depreciation 43 8 83 — 134 Amortization 233 163 58 — 454 5,812 546 2,462 (1,352 ) 7,468 Operating income 604 416 255 — 1,275 Other (expense) income: Equity in losses of investee — — (9 ) — (9 ) Interest expense, net (205 ) — (3 ) — (208 ) Foreign currency gain (loss) 15 (1 ) — — 14 Loss on extinguishment of debt (21 ) — — — (21 ) Intercompany interest (expense) income (7 ) (51 ) 58 — — (218 ) (52 ) 46 — (224 ) Income before income taxes 386 364 301 — 1,051 Income tax expense (136 ) (153 ) (100 ) — (389 ) Equity in earnings of subsidiaries, net of tax 412 262 — (674 ) — Net income 662 473 201 (674 ) 662 Less net income attributable to the noncontrolling interest (34 ) — (34 ) 34 (34 ) Net income attributable to QVC, Inc. stockholder $ 628 473 167 (640 ) 628 Consolidating Statements of Comprehensive Income Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 972 652 91 (743 ) 972 Foreign currency translation adjustments, net of tax 135 — 135 (135 ) 135 Total comprehensive income 1,107 652 226 (878 ) 1,107 Comprehensive income attributable to noncontrolling interest (50 ) — (50 ) 50 (50 ) Comprehensive income attributable to QVC, Inc. stockholder $ 1,057 652 176 (828 ) 1,057 Consolidating Statements of Comprehensive Income Year ended December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 642 432 215 (647 ) 642 Foreign currency translation adjustments, net of tax (83 ) — (83 ) 83 (83 ) Total comprehensive income 559 432 132 (564 ) 559 Comprehensive income attributable to noncontrolling interest (39 ) — (39 ) 39 (39 ) Comprehensive income attributable to QVC, Inc. stockholder $ 520 432 93 (525 ) 520 Consolidating Statements of Comprehensive Income Year ended December 31, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 662 473 201 (674 ) 662 Foreign currency translation adjustments, net of tax (102 ) — (102 ) 102 (102 ) Total comprehensive income 560 473 99 (572 ) 560 Comprehensive income attributable to noncontrolling interest (33 ) — (33 ) 33 (33 ) Comprehensive income attributable to QVC, Inc. stockholder $ 527 473 66 (539 ) 527 Consolidating Statements of Cash Flows Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 641 507 54 — 1,202 Investing activities: Capital expenditures (103 ) (4 ) (45 ) — (152 ) Expenditures for television distribution rights — (50 ) — — (50 ) Decrease (increase) in restricted cash 3 — (1 ) — 2 Changes in other noncurrent assets (1 ) — — — (1 ) Intercompany investing activities 545 (1,507 ) — 962 — Net cash provided by (used in) investing activities 444 (1,561 ) (46 ) 962 (201 ) Financing activities: Principal payments of debt and capital lease obligations (2,268 ) — (10 ) — (2,278 ) Principal borrowings of debt from senior secured credit facility 2,162 — — — 2,162 Dividends paid to Liberty Interactive Corporation (866 ) — — — (866 ) Dividends paid to noncontrolling interest — — (40 ) — (40 ) Other financing activities (16 ) — — — (16 ) Net short-term intercompany debt (repayments) borrowings (170 ) (1,267 ) 1,437 — — Other intercompany financing activities 73 2,257 (1,368 ) (962 ) — Net cash (used in) provided by financing activities (1,085 ) 990 19 (962 ) (1,038 ) Effect of foreign exchange rate changes on cash and cash equivalents — — 13 — 13 Net (decrease) increase in cash and cash equivalents — (64 ) 40 — (24 ) Cash and cash equivalents, beginning of period 2 97 185 — 284 Cash and cash equivalents, end of period $ 2 33 225 — 260 Consolidating Statements of Cash Flows Year ended December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 555 408 215 — 1,178 Investing activities: Capital expenditures (141 ) (2 ) (36 ) — (179 ) Expenditures for television distribution rights — (38 ) — — (38 ) Decrease in restricted cash 1 — — — 1 Other investing activities (12 ) — 9 — (3 ) Changes in other noncurrent assets (2 ) — 1 — (1 ) Intercompany investing activities 452 131 — (583 ) — Net cash provided by (used in) investing activities 298 91 (26 ) (583 ) (220 ) Financing activities: Principal payments of debt and capital lease obligations (1,727 ) — (6 ) — (1,733 ) Principal borrowings of debt from senior secured credit facility 1,505 — — — 1,505 Payment of debt origination fees (2 ) — — — (2 ) Dividends paid to Liberty (703 ) — — — (703 ) Dividends paid to noncontrolling interest — — (39 ) — (39 ) Other financing activities (9 ) — — — (9 ) Net short-term intercompany debt borrowings (repayments) 61 (1,517 ) 1,456 — — Other intercompany financing activities 24 1,003 (1,610 ) 583 — Net cash used in financing activities (851 ) (514 ) (199 ) 583 (981 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (20 ) — (20 ) Net increase (decrease) in cash and cash equivalents 2 (15 ) (30 ) — (43 ) Cash and cash equivalents, beginning of period — 112 215 — 327 Cash and cash equivalents, end of period $ 2 97 185 — 284 Consolidating Statements of Cash Flows Year ended December 31, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 274 314 440 — 1,028 Investing activities: Capital expenditures (154 ) (9 ) (52 ) — (215 ) Expenditures for television distribution rights — (68 ) (4 ) — (72 ) Decrease (increase) in restricted cash 1 — (1 ) — — Other investing activities 2 — — — 2 Changes in other noncurrent assets 12 — (12 ) — — Intercompany investing activities 525 413 — (938 ) — Net cash provided by (used in) investing activities 386 336 (69 ) (938 ) (285 ) Financing activities: Principal payments of debt and capital lease obligations (2,170 ) — (7 ) — (2,177 ) Principal borrowings of debt from senior secured credit facility 2,974 — — — 2,974 Payment of debt origination fees (3 ) — — — (3 ) Payment of bond premium fees (18 ) — — — (18 ) Dividends paid to Liberty (1,485 ) — — — (1,485 ) Dividends paid to noncontrolling interest — — (36 ) — (36 ) Other financing activities (15 ) — — — (15 ) Net short-term intercompany debt (repayments) borrowings (822 ) 2,192 (1,370 ) — — Other intercompany financing activities 877 (2,853 ) 1,038 938 — Net cash used in financing activities (662 ) (661 ) (375 ) 938 (760 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (3 ) — (3 ) Net decrease in cash and cash equivalents (2 ) (11 ) (7 ) — (20 ) Cash and cash equivalents, beginning of period 2 123 222 — 347 Cash and cash equivalents, end of period $ — 112 215 — 327 |
Employee Benefit Plans (Notes)
Employee Benefit Plans (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans In certain countries, QVC sponsors defined contribution plans, which provide employees an opportunity to make contributions to a trust for investment in a variety of securities. Generally, the Company makes matching contributions to the plans based on a percentage of the amount contributed by employees. The Company's cash contributions to the plans were $18 million , $23 million and $24 million for the years ended December 31, 2017, 2016 and 2015 , respectively. |
Quarterly Financial Information
Quarterly Financial Information (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Quarterly Financial Information (Unaudited) Year ended December 31, 2017 (in millions) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net revenue $ 1,965 1,979 2,010 2,817 Operating income $ 271 306 274 496 Net income $ 135 151 166 520 Net income attributable to QVC, Inc. stockholder $ 124 141 154 507 Year ended December 31, 2016 (in millions) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net revenue $ 2,013 2,063 1,948 2,658 Operating income $ 261 307 231 404 Net income $ 133 168 116 225 Net income attributable to QVC, Inc. stockholder $ 125 157 107 215 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Cash and cash equivalents policy | (a) Cash and cash equivalents All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Cash equivalents were $42 million and $113 million at December 31, 2017 and 2016 , respectively. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents approximate their fair values (Level 1). |
Restricted cash policy | (b) Restricted cash Restricted cash at December 31, 2017 and 2016 primarily includes a cash deposit with a third party trustee that provides financial assurance that the Company will fulfill its obligations in relation to claims under its workers' compensation policy. |
Receivables policy | (c) Accounts receivable A provision for customer bad debts is provided as a percentage of accounts receivable based on historical experience and is included within selling, general and administrative expense. A provision for noncustomer bad debt expense, related to amounts due from vendors for unsold and returned products, is provided based on an estimate of the probable expected losses and is included in cost of goods sold. |
Inventory policy | (d) Inventories Inventories, consisting primarily of products held for sale, are stated at the lower of cost or net realizable value. Cost is determined by the average cost method, which approximates the first-in, first-out method. Assessments about the realizability of inventory require the Company to make judgments based on currently available information about the likely method of disposition including sales to individual customers, returns to product vendors, liquidations and the estimated recoverable values of each disposition category. |
Property and equipment policy | (e) Property and equipment The costs of property and equipment are capitalized and depreciated over their estimated useful lives using the straight-line method beginning in the month of acquisition or in-service date. Transponders under capital leases are stated at the present value of minimum lease payments. When assets are sold or retired, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in net income. The costs of maintenance and repairs are charged to expense as incurred. |
Interest capitalization policy | (f) Capitalized interest The Company capitalizes interest cost incurred on debt during the construction of major projects exceeding one year. Capitalized interest was not material to the consolidated financial statements for any periods presented. |
Internal use software policy | (g) Internally developed software Internal software development costs are capitalized in accordance with guidance on accounting for the costs of computer software developed or obtained for internal use, and are classified within other intangible assets in the consolidated balance sheets. The Company amortizes computer software and internal software development costs over an estimated useful life of approximately three years using the straight-line method. |
Goodwill policy | (h) Goodwill Goodwill represents the excess of costs over the fair value of the net assets of businesses acquired. Goodwill is not amortized. Goodwill is tested annually for impairment, and more frequently if events and circumstances indicated that the asset might be impaired. An impairment loss would be recognized to the extent that the carrying amount exceeded the reporting unit's fair value. The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows: (in millions) QVC-U.S. QVC-Germany QVC-Japan QVC-U.K. QVC-Italy Total Balance as of December 31, 2015 $ 4,190 278 251 193 123 5,035 Exchange rate fluctuations — (11 ) 7 (32 ) (4 ) (40 ) Balance as of December 31, 2016 4,190 267 258 161 119 4,995 Exchange rate fluctuations — 38 11 15 16 80 Balance as of December 31, 2017 $ 4,190 305 269 176 135 5,075 QVC utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. In evaluating goodwill on a qualitative basis, QVC reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of its reporting units. A reporting unit is defined in accounting guidance in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP" or "GAAP") as an operating segment or one level below an operating segment (also known as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. The Company considers whether there were any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges and the legal environments, and how these factors might impact country specific performance in future periods. If a step one test is considered necessary based on the qualitative factors, the Company compares the estimated fair value of a reporting unit to its carrying value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and timing of expected future cash flows. The cash flows employed in the Company's valuation analysis are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. There is no assurance that actual results in the future will approximate these forecasts. Any excess of the carrying value of the goodwill over the fair value is recorded as an impairment charge. There were no goodwill impairments recorded during the years ended December 31, 2017, 2016 and 2015 . The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. |
Foreign currency transactions and translations policy | (i) Translation of foreign currencies Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustments, net of applicable income taxes, are recorded as a component of accumulated other comprehensive income (loss) in equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in the consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions |
Revenue recognition policy | (j) Revenue recognition The Company recognizes revenue at the time of delivery to customers. The revenue for shipments in-transit is recorded as deferred revenue. The Company's general policy is to allow customers to return merchandise for up to thirty days after the date of shipment. An allowance for returned merchandise is provided at the time revenue is recorded as a percentage of sales based on historical experience. The total reduction in net revenue due to returns for the years ended December 31, 2017, 2016 and 2015 aggregated to $1,811 million , $1,815 million and $1,939 million , respectively. A summary of activity in the allowance for sales returns, recorded on a net margin basis, was as follows: (in millions) Balance Additions- Deductions Balance 2017 $ 93 982 (979 ) 96 2016 103 1,010 (1,020 ) 93 2015 109 1,213 (1,219 ) 103 The Company evaluates the criteria for reporting revenue gross as a principal versus net as an agent, in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, the Company is the primary obligor in the arrangement, has inventory risk, has latitude in establishing the selling price and selecting suppliers, and accordingly, records revenue gross. Sales and use taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net revenue in the consolidated statements of operations. |
Cost of sales policy | (k) Cost of goods sold Cost of goods sold primarily includes actual product cost, provision for obsolete inventory, buying allowances received from suppliers, shipping and handling costs and warehouse costs. |
Advertising cost policy | (l) Advertising costs Advertising costs are expensed as incurred. Advertising costs amounted to $86 million , $84 million and $87 million for the years ended December 31, 2017, 2016 and 2015 , respectively. These costs were included in selling, general and administrative expenses in the consolidated statements of operations. |
Share-based compensation policy | (m) Stock-based compensation As described in note 10, the Company and Liberty have granted certain stock-based awards to employees of the Company. The Company measures the cost of employee services received in exchange for an award of equity instruments (such as stock options and restricted stock) based on the grant-date fair value of the award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Stock-based compensation expense is included in selling, general and administrative expenses in the consolidated statements of operations. |
Impairment of long-lived assets policy | (n) Impairment of long-lived assets The Company reviews long-lived assets, such as property and equipment, internally developed software and purchased intangibles subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Impairment charges are recognized as an acceleration of depreciation expense or amortization expense in the consolidated statements of operations. |
Derivatives policy | (o) Derivatives The Company accounts for derivatives and hedging activities in accordance with standards issued by the Financial Accounting Standards Board ("FASB"), which requires that all derivative instruments be recorded on the balance sheet at their respective fair values. Fair value is based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. For derivatives designated as hedges, changes in the fair value are either offset against the changes in fair value of the designated hedged item through earnings or recognized in accumulated other comprehensive loss until the hedged item is recognized in earnings. The Company generally enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items. Changes in the fair value of a derivative that is highly effective and that is designated and qualifies as a cash flow hedge are recorded in accumulated other comprehensive loss to the extent that the derivative is effective as a hedge, until earnings are affected by the variability in cash flows of the designated hedged item. The ineffective portion of the change in fair value of a derivative instrument that qualifies as a cash flow hedge is reported in earnings. |
Income tax policy | (p) Income taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in other (expense) income in the consolidated statements of operations. |
Consolidation policy | (q) Noncontrolling interest The Company reports the noncontrolling interest of QVC-Japan within equity in the consolidated balance sheets and the amount of consolidated net income attributable to the noncontrolling interest is presented in the consolidated statements of operations. |
Business acquisition policy | (r) Business acquisitions Acquired businesses are accounted for using the acquisition method of accounting, which requires the Company to record assets acquired and liabilities assumed at their respective fair values with the excess of the purchase price over estimated fair values recorded as goodwill. The assumptions made in determining the fair value of acquired assets and assumed liabilities as well as asset lives can materially impact the results of operations. The Company obtains information during due diligence and through other sources to establish respective fair values. Examples of factors and information that the Company uses to determine the fair values include tangible and intangible asset evaluations and appraisals and evaluations of existing contingencies and liabilities. If the initial valuation for an acquisition is incomplete by the end of the quarter in which the acquisition occurred, the Company will record a provisional estimate in the financial statements. The provisional estimate will be finalized as soon as information becomes available, but not later than one year from the acquisition date. |
Equity method investments policy | (s) Investment in affiliate The Company holds an investment in China that is accounted for using the equity method. The equity method of accounting is used when the Company exercises significant influence, but does not have operating control, generally assumed to be 20%-50% ownership. Under the equity method, original investments are recorded at cost and adjusted by their share of undistributed earnings or losses of these companies. The excess of the Company's cost on its underlying interest in the net assets of the affiliate is allocated to identifiable intangible assets and goodwill. Equity investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. On July 4, 2012, the Company entered into a joint venture with CNR for a 49% interest in CNRS. The CNRS joint venture is accounted for as an equity method investment as a component of other noncurrent assets on the consolidated balance sheets and equity in losses of investee in the consolidated statements of operations. CNRS operates a retailing business in China through a televised shopping channel with an associated website. CNRS is headquartered in Beijing, China. The joint venture's strategy is to combine CNRS' knowledge of the digital shopping market and consumers in China with QVC's global experience and know-how in multimedia retailing. The current investment in CNRS is approximately $40 million classified within other noncurrent assets on the consolidated balance sheet. |
Use of estimates policy | (t) Use of estimates in the preparation of consolidated financial statements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated 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, medical and other benefit related costs, depreciable lives of fixed assets, internally developed software, valuation of acquired intangible assets and goodwill, income taxes and stock-based compensation. |
New accounting pronouncements policy | (u) Recent accounting pronouncements On May 28, 2014, 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 and 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 which clarifies principal versus agent considerations, in April 2016, the FASB issued ASU No. 2016-10 which clarifies the identification of performance obligations and the implementation guidance for licensing, and in May 2016, the FASB issued ASU No. 2016-12 which clarifies assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The updated guidance also requires additional disclosures regarding the nature, timing and uncertainty of the Company's revenue transactions. The Company will adopt the accounting guidance in the first quarter of 2018 with a cumulative adjustment that will increase retained earnings approximately $14 million using the modified transition method. The Company has completed their review of the applicable ASU and 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. The Company has also concluded that it will continue to act as principal in certain vendor arrangements and will recognize credit card income for its QVC-branded credit card as part of net revenue. At the current time, the credit card income is included as an offset to selling, general and administrative expenses. In addition, the Company's balance sheet presentation of its sales return reserve will change to present a separate return asset and liability, instead of the net presentation currently used. The Company will also 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. 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 Company plans to adopt this standard during the first quarter of 2018 and does not expect that the adoption will have a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which revises the accounting 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. While the Company is currently evaluating the effect that the updated standard will have on its ongoing financial reporting, it expects that the operating leases listed in note 9 - Leases to the accompanying consolidated financial statements will be recognized as right-of-use assets and operating lease liabilities on the consolidated balance sheets upon adoption of the new standard. 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 will adopt this ASU beginning January 1, 2018 and does not expect that the adoption will have a material effect on its 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 plans to adopt this standard during the first quarter of 2018 and does not expect that the adoption will have a material effect on its consolidated financial statements. 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 plans to adopt this standard during the first quarter of 2018 and does not expect that the adoption will have a material effect on its 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 adopted this standard during the fourth quarter of 2017 and there was no significant effect of the standard on its financial reporting. |
Reclassification policy | v) Reclassifications Certain prior period amounts have been reclassified to conform with current period presentation. For the year ended December 31, 2016, certain amounts within the deferred tax liability table in note 11 - Income Taxes were reclassified in order to conform with current period presentation. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows: (in millions) QVC-U.S. QVC-Germany QVC-Japan QVC-U.K. QVC-Italy Total Balance as of December 31, 2015 $ 4,190 278 251 193 123 5,035 Exchange rate fluctuations — (11 ) 7 (32 ) (4 ) (40 ) Balance as of December 31, 2016 4,190 267 258 161 119 4,995 Exchange rate fluctuations — 38 11 15 16 80 Balance as of December 31, 2017 $ 4,190 305 269 176 135 5,075 |
Summary of activity in allowance for sales returns | A summary of activity in the allowance for sales returns, recorded on a net margin basis, was as follows: (in millions) Balance Additions- Deductions Balance 2017 $ 93 982 (979 ) 96 2016 103 1,010 (1,020 ) 93 2015 109 1,213 (1,219 ) 103 |
Accounts Receivable Accounts 30
Accounts Receivable Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | Accounts receivable consisted of the following: December 31, (in millions) 2017 2016 QVC Easy-Pay plan $ 1,151 1,054 Major credit cards and customers 263 221 Other receivables 65 68 1,479 1,343 Less allowance for doubtful accounts (91 ) (97 ) Accounts receivable, net $ 1,388 1,246 |
Summary of activity in the allowance for doubtful accounts | A summary of activity in the allowance for doubtful accounts was as follows (in millions): (in millions) Balance Additions- Deductions- Balance 2017 $ 97 72 (78 ) 91 2016 86 107 (96 ) 97 2015 91 82 (87 ) 86 |
Property and Equipment, Net P31
Property and Equipment, Net Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule Property, Plant and Equipment, net | Property and equipment consisted of the following: December 31, Estimated (in millions) 2017 2016 life Land $ 85 81 N/A Buildings and improvements 1,100 1,048 8 - 20 years Furniture and other equipment 497 447 2 - 8 years Broadcast equipment 134 135 3 - 5 years Computer equipment 160 146 2 - 4 years Transponders and terrestrial transmitter (note 9) 170 150 8 - 15 years Projects in progress 33 28 N/A 2,179 2,035 Less: accumulated depreciation (1,174 ) (1,004 ) Property and equipment, net $ 1,005 1,031 |
Television Distribution Right32
Television Distribution Rights, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Television Distribution Rights [Abstract] | |
Schedule of television distribution rights | Television distribution rights consisted of the following: (in millions) 2017 2016 Television distribution rights $ 730 2,279 Less accumulated amortization (652 ) (2,096 ) Television distribution rights, net $ 78 183 Television Distribution Rights, Net Television distribution rights consisted of the following: (in millions) 2017 2016 Television distribution rights $ 730 2,279 Less accumulated amortization (652 ) (2,096 ) Television distribution rights, net $ 78 183 The Company enters into affiliation agreements with television providers for carriage of the Company's shopping service, as well as for certain channel placement. If these television providers were to add additional subscribers to the agreement through acquisition, the Company may be required to make additional payments. The Company's ability to continue to sell products to its customers is dependent on its ability to maintain and renew these affiliation agreements. In some cases, renewals are not agreed upon prior to the expiration of a given agreement while the programming continues to be carried by the relevant distributor without an effective agreement in place. The Company does not have distribution agreements with some of the cable operators that carry its programming. Television distribution rights are amortized using the straight-line method over the lives of the individual agreements. The remaining weighted average lives of the television distribution rights was approximately 2.9 years at December 31, 2017 . Amortization expense for television distribution rights was $157 million , $193 million and $189 million for the years ended December 31, 2017, 2016 and 2015 , respectively. The decrease in the gross presentation of television distribution rights and the related accumulated amortization at December 31, 2017 is primarily due to the end of the useful lives of television distribution rights in place at the time of Liberty's acquisition of QVC in 2003. As of December 31, 2017 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): 2018 $ 44 2019 20 2020 9 2021 3 2022 2 In return for carrying QVC's signals, each programming distributor in the U.S. receives an allocated portion, based upon market share, of up to 5% of the net sales of merchandise sold via the television programs and from certain internet sales to customers located in the programming distributors' service areas. In Germany, Japan, the U.K., Italy and France, programming distributors predominately receive an agreed-upon annual fee, a monthly fee per subscriber regardless of the net sales, a variable percentage of net sales or some combination of the above arrangements. The Company recorded expense related to these commissions of $298 million for each of the years ended December 31, 2017 and 2016 and $293 million for the year ended December 31, 2015 , which is included as part of operating expenses in the consolidated statements of operations. |
Schedule of expected amortization expense | As of December 31, 2017 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): 2018 $ 44 2019 20 2020 9 2021 3 2022 2 |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Intangible Assets [Abstract] | |
Schedule of acquired intangible assets by class | Other intangible assets consisted of the following: December 31, 2017 2016 Weighted average remaining life (years) (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 710 (548 ) 162 646 (466 ) 180 2.1 Affiliate and customer relationships 2,419 (2,409 ) 10 2,397 (2,274 ) 123 2.8 Debt origination fees 8 (3 ) 5 8 (1 ) 7 3.4 Trademarks (indefinite life) 2,428 — 2,428 2,428 — 2,428 N/A $ 5,565 (2,960 ) 2,605 5,479 (2,741 ) 2,738 2.2 |
Schedule of finite-lived intangible assets future amortization expense | As of December 31, 2017 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): 2018 $ 93 2019 57 2020 26 2021 1 2022 — |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following: December 31, (in millions) 2017 2016 Accounts payable non-trade $ 279 215 Income taxes 128 120 Accrued compensation and benefits 119 92 Allowance for sales returns 96 93 Sales and other taxes 71 62 Deferred revenue 58 69 Accrued interest 58 58 Other 63 60 $ 872 769 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt and capital lease obligations consisted of the following: December 31, (in millions) 2017 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 1,496 1,596 Capital lease obligations 68 69 Build to suit lease obligation 101 105 Less debt issuance costs, net (22 ) (28 ) Total debt and capital lease obligations 5,190 5,289 Less current portion (17 ) (14 ) Long-term portion of debt and capital lease obligations $ 5,173 5,275 |
Leases and Transponder Servic36
Leases and Transponder Service Agreements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases and Transponder Service Agreements [Abstract] | |
Future minimum lease payments | Future minimum payments under noncancelable operating leases and capital 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 December 31, 2017 consisted of the following: (in millions) Capital leases Operating leases Build to suit lease 2018 $ 15 21 5 2019 15 16 6 2020 12 13 6 2021 12 10 6 2022 8 7 6 Thereafter 10 73 58 Total $ 72 140 87 |
Stock Options and Other Share37
Stock Options and Other Share-Based Awards Stock Options and Other Share- Based Awards (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock options activity | A summary of the activity of the Liberty Incentive Plan with respect to the QVCA Options granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Options Weighted Aggregate Weighted average remaining Outstanding at January 1, 2017 12,536,399 $ 22.80 $ 16,511 4.2 Granted 3,114,919 23.69 Transferred from zulily (1) 12,860 24.13 Exercised (2,857,069 ) 16.74 Forfeited (954,641 ) 26.58 Outstanding at December 31, 2017 11,852,468 24.19 19,663 4.5 Exercisable at December 31, 2017 5,424,770 22.74 17,572 3.5 (1) During year ended December 31, 2017 , employees were transferred to QVC from zulily and are now employed by QVC. The row represents employees' previous grants prior to being a QVC employee. A summary of the activity of the Liberty Incentive Plan with respect to the LVNTA Options granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Options Weighted average exercise Aggregate intrinsic Weighted average remaining Outstanding at January 1, 2017 302,467 $ 16.69 $ 6,104 1.2 Granted — — Exercised (302,467 ) 16.69 Forfeited — — Outstanding at December 31, 2017 — — — — Exercisable at December 31, 2017 — — — — |
Schedule of stock options valuation assumptions | During the years ended December 31, 2017, 2016 and 2015 , the fair value of each QVCA Option was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: 2017 2016 2015 Expected volatility 30.3 % 27.4 % 39.7 % Expected term (years) 5.9 6.1 5.9 Risk free interest rate 2.1 % 1.6 % 1.7 % Expected dividend yield — — — |
Schedule of restricted stock activity | A summary of the activity of the Liberty Incentive Plan with respect to the QVCA restricted shares granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Restricted shares Weighted average Outstanding at January 1, 2017 907,826 $ 26.65 Granted 677,376 22.49 Transferred from zulily (1) 21,630 25.16 Vested (391,330 ) 25.98 Forfeited (127,526 ) 25.72 Outstanding at December 31, 2017 1,087,976 24.38 (1) During year ended December 31, 2017 , employees were transferred to QVC from zulily and are now employed by QVC. The row represents employees' previous grants prior to being a QVC employee. A summary of the activity of the Liberty Incentive Plan with respect to the LVNTA restricted shares granted to QVC employees and officers as of and during the year ended December 31, 2017 is presented below: Restricted shares Weighted Outstanding at January 1, 2017 13,892 $ 46.57 Granted — — Vested (9,153 ) 44.14 Forfeited (678 ) 50.01 Outstanding at December 31, 2017 4,061 51.47 |
Income Taxes Income Tax (Tables
Income Taxes Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax expense (benefit) consisted of the following: Years ended December 31, (in millions) 2017 2016 2015 Current: U.S. federal $ 361 326 384 State and local 28 29 20 Foreign jurisdictions 87 73 75 Total 476 428 479 Deferred: U.S. federal (317 ) (31 ) (86 ) State and local (7 ) (8 ) 3 Foreign jurisdictions — (4 ) (7 ) Total (324 ) (43 ) (90 ) Total income tax expense $ 152 385 389 |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Pre-tax income was as follows: Years ended December 31, (in millions) 2017 2016 2015 QVC-U.S. $ 915 859 909 QVC-International 209 168 142 Consolidated QVC $ 1,124 1,027 1,051 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Total income tax expense differs from the amounts computed by applying the U.S. federal income tax rate of 35% in effect in 2017, as a result of the following: Years ended December 31, 2017 2016 2015 Provision at statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.0 % 1.3 % 1.4 % Foreign taxes — % (0.3 )% 0.2 % Foreign earnings repatriation — % 0.2 % 0.2 % Valuation allowance 1.0 % 1.0 % 0.9 % Permanent differences (2.1 )% (0.6 )% (0.2 )% Impact of Tax Cuts and Jobs Act (25.4 )% — % — % Investment in subsidiary 3.9 % — % — % Impact of foreign currency tax regulation 0.4 % 1.0 % — % Other, net (0.3 )% (0.1 )% (0.5 )% Total income tax expense 13.5 % 37.5 % 37 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The tax effects of temporary differences that gave rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below: December 31, (in millions) 2017 2016 Deferred tax assets: Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts $ 21 38 Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986 25 36 Allowance for sales returns 24 36 Deferred revenue 29 41 Deferred compensation 20 30 Unrecognized federal and state tax benefits 11 23 Net operating loss carryforwards 33 22 Accrued liabilities 30 38 Other — 6 Subtotal 193 270 Valuation allowance (33 ) (22 ) Total deferred tax assets 160 248 Deferred tax liabilities: Depreciation and amortization (584 ) (1,009 ) Cumulative translation of foreign currencies (17 ) (13 ) Investment in subsidiary (28 ) (4 ) Other (4 ) — Total deferred tax liabilities (633 ) (1,026 ) Net deferred tax liability $ (473 ) (778 ) |
Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block] | A reconciliation of the 2017 beginning and ending amount of the liability for unrecognized tax benefits is as follows: (in millions) Balance at January 1, 2017 $ 55 Increases related to prior year tax positions 1 Decreases related to prior year tax positions (8 ) Decreases related to settlements with taxing authorities (4 ) Increases related to current year tax positions 6 Balance at December 31, 2017 $ 50 |
Assets and Liabilities Measur39
Assets and Liabilities Measured at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2017 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 42 42 — — Non-current assets: Interest rate swap arrangements (note 8) 2 — 2 — Long-term liabilities: Debt (note 8) 5,132 — 5,132 — Fair value measurements at December 31, 2016 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 113 113 — — Non-current assets: Interest rate swap arrangements (note 8) 2 — 2 — Long-term liabilities: Debt (note 8) 5,092 — 5,092 — |
Information about QVC's Opera40
Information about QVC's Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Adjusted OIBDA by Segment | Years ended December 31, 2017 2016 2015 (in millions) Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 6,140 1,446 6,120 1,435 6,257 1,467 QVC-International 2,631 451 2,562 405 2,486 427 Consolidated QVC $ 8,771 1,897 8,682 1,840 8,743 1,894 |
Schedule of Depreciation and Amortization by Segment | Years ended December 31, 2017 2016 2015 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 93 330 78 414 63 404 QVC-International 62 34 64 49 71 50 Consolidated QVC $ 155 364 142 463 134 454 |
Schedule of Capital Expenditures and Total Assets by Segment | Years ended December 31, 2017 2016 (in millions) Total Capital Total Capital QVC-U.S. $ 9,429 116 9,595 152 QVC-International 2,121 36 1,950 27 Consolidated QVC $ 11,550 152 11,545 179 |
Property and equipment, net by Segment | Property and equipment, net of accumulated depreciation, by segment were as follows: December 31, (in millions) 2017 2016 QVC-U.S. $ 559 594 QVC-International 446 437 Consolidated QVC $ 1,005 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: Years ended December 31, (in millions) 2017 2016 2015 Adjusted OIBDA $ 1,897 1,840 1,894 Stock-based compensation (31 ) (32 ) (31 ) Depreciation and amortization (519 ) (605 ) (588 ) Equity in losses of investee (3 ) (6 ) (9 ) Gains on financial instruments — 2 — Interest expense, net (214 ) (210 ) (208 ) Foreign currency (loss) gain (6 ) 38 14 Loss on extinguishment of debt — — (21 ) Income before income taxes $ 1,124 1,027 1,051 |
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographic area: Years ended December 31, (in millions) 2017 2016 2015 United States $ 6,140 6,120 6,257 Japan 934 897 808 Germany 899 865 837 United Kingdom 640 654 718 Other countries 158 146 123 Consolidated QVC $ 8,771 8,682 8,743 |
Long-lived Assets by Geographic Areas | The following table summarizes property and equipment, net of accumulated depreciation, based on physical location: December 31, (in millions) 2017 2016 United States $ 559 594 Germany 164 153 Japan 143 145 United Kingdom 84 83 Other countries 55 56 Consolidated QVC $ 1,005 1,031 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 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, 2015 $ (39 ) (39 ) Other comprehensive loss attributable to QVC, Inc. stockholder (101 ) (101 ) Balance at December 31, 2015 (140 ) (140 ) Other comprehensive loss attributable to QVC, Inc. stockholder (84 ) (84 ) Balance at December 31, 2016 (224 ) (224 ) Other comprehensive income attributable to QVC, Inc. stockholder 131 131 Balance at December 31, 2017 $ (93 ) (93 ) |
Schedule of Component of Comprehensive Income (Loss) | The following table summarizes the tax effects related to the component of other comprehensive income: (in millions) Before-tax amount Tax benefit (expense) Net-of-tax amount Year ended December 31, 2017: Foreign currency translation adjustments $ 156 (21 ) 135 Other comprehensive income 156 (21 ) 135 Year ended December 31, 2016: Foreign currency translation adjustments $ (96 ) 13 (83 ) Other comprehensive loss (96 ) 13 (83 ) Year ended December 31, 2015: Foreign currency translation adjustments $ (119 ) 17 (102 ) Other comprehensive loss (119 ) 17 (102 ) |
Guarantor_Non-Guarantor Subsi42
Guarantor/Non-Guarantor Subsidiary Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Current Period | Consolidating Balance Sheets December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 33 225 — 260 Restricted cash 5 — 3 — 8 Accounts receivable, net 1,076 — 312 — 1,388 Inventories 758 — 261 — 1,019 Prepaid expenses and other current assets 28 — 23 — 51 Total current assets 1,869 33 824 — 2,726 Property and equipment, net 295 60 650 — 1,005 Television distribution rights, net — 78 — — 78 Goodwill 4,190 — 885 — 5,075 Other intangible assets, net 539 2,048 18 — 2,605 Other noncurrent assets 14 — 47 — 61 Investments in subsidiaries 3,579 1,626 — (5,205 ) — Total assets $ 10,486 3,845 2,424 (5,205 ) 11,550 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 14 — 17 Accounts payable-trade 455 — 301 — 756 Accrued liabilities 366 227 279 — 872 Intercompany accounts payable (receivable) 453 (1,513 ) 1,060 — — Total current liabilities 1,277 (1,286 ) 1,654 — 1,645 Long-term portion of debt and capital lease obligations 5,033 — 140 — 5,173 Deferred income taxes 52 468 (47 ) — 473 Other long-term liabilities 92 — 25 — 117 Total liabilities 6,454 (818 ) 1,772 — 7,408 Equity: QVC, Inc. stockholder's equity 4,032 4,663 542 (5,205 ) 4,032 Noncontrolling interest — — 110 — 110 Total equity 4,032 4,663 652 (5,205 ) 4,142 Total liabilities and equity $ 10,486 3,845 2,424 (5,205 ) 11,550 |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Prior Period | 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 | Consolidating Statements of Operations Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,298 1,000 2,848 (1,375 ) 8,771 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 3,877 157 1,744 (180 ) 5,598 Operating 433 265 277 (374 ) 601 Selling, general and administrative, including stock-based compensation 1,097 2 428 (821 ) 706 Depreciation 67 7 81 — 155 Amortization 187 142 35 — 364 5,661 573 2,565 (1,375 ) 7,424 Operating income 637 427 283 — 1,347 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Interest (expense) income, net (215 ) 1 — — (214 ) Foreign currency (loss) gain (5 ) 1 (2 ) — (6 ) Intercompany interest (expense) income (12 ) 96 (84 ) — — (232 ) 98 (89 ) — (223 ) Income before income taxes 405 525 194 — 1,124 Income tax (expense) benefit (129 ) 80 (103 ) — (152 ) Equity in earnings of subsidiaries, net of tax 696 47 — (743 ) — Net income 972 652 91 (743 ) 972 Less net income attributable to the noncontrolling interest (46 ) — (46 ) 46 (46 ) Net income attributable to QVC, Inc. stockholder $ 926 652 45 (697 ) 926 |
Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Prior Period | Consolidating Statements of Operations Year ended December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,179 1,001 2,787 (1,285 ) 8,682 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 3,855 169 1,726 (210 ) 5,540 Operating 414 258 274 (340 ) 606 Selling, general and administrative, including stock-based compensation 1,116 1 346 (735 ) 728 Depreciation 57 7 78 — 142 Amortization 245 168 50 — 463 5,687 603 2,474 (1,285 ) 7,479 Operating income 492 398 313 — 1,203 Other (expense) income: Equity in losses of investee — — (6 ) — (6 ) Gain on financial instruments 2 — — — 2 Interest (expense) income, net (211 ) — 1 — (210 ) Foreign currency gain 17 — 21 — 38 Intercompany interest (expense) income (2 ) 1 1 — — (194 ) 1 17 — (176 ) Income before income taxes 298 399 330 — 1,027 Income tax expense (114 ) (156 ) (115 ) — (385 ) Equity in earnings of subsidiaries, net of tax 458 189 — (647 ) — Net income 642 432 215 (647 ) 642 Less net income attributable to the noncontrolling interest (38 ) — (38 ) 38 (38 ) Net income attributable to QVC, Inc. stockholder $ 604 432 177 (609 ) 604 Consolidating Statements of Operations Year ended December 31, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,416 962 2,717 (1,352 ) 8,743 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 4,018 109 1,624 (223 ) 5,528 Operating 338 265 293 (289 ) 607 Selling, general and administrative, including stock-based compensation 1,180 1 404 (840 ) 745 Depreciation 43 8 83 — 134 Amortization 233 163 58 — 454 5,812 546 2,462 (1,352 ) 7,468 Operating income 604 416 255 — 1,275 Other (expense) income: Equity in losses of investee — — (9 ) — (9 ) Interest expense, net (205 ) — (3 ) — (208 ) Foreign currency gain (loss) 15 (1 ) — — 14 Loss on extinguishment of debt (21 ) — — — (21 ) Intercompany interest (expense) income (7 ) (51 ) 58 — — (218 ) (52 ) 46 — (224 ) Income before income taxes 386 364 301 — 1,051 Income tax expense (136 ) (153 ) (100 ) — (389 ) Equity in earnings of subsidiaries, net of tax 412 262 — (674 ) — Net income 662 473 201 (674 ) 662 Less net income attributable to the noncontrolling interest (34 ) — (34 ) 34 (34 ) Net income attributable to QVC, Inc. stockholder $ 628 473 167 (640 ) 628 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Current Period | Consolidating Statements of Comprehensive Income Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 972 652 91 (743 ) 972 Foreign currency translation adjustments, net of tax 135 — 135 (135 ) 135 Total comprehensive income 1,107 652 226 (878 ) 1,107 Comprehensive income attributable to noncontrolling interest (50 ) — (50 ) 50 (50 ) Comprehensive income attributable to QVC, Inc. stockholder $ 1,057 652 176 (828 ) 1,057 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Prior Period | Consolidating Statements of Comprehensive Income Year ended December 31, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 662 473 201 (674 ) 662 Foreign currency translation adjustments, net of tax (102 ) — (102 ) 102 (102 ) Total comprehensive income 560 473 99 (572 ) 560 Comprehensive income attributable to noncontrolling interest (33 ) — (33 ) 33 (33 ) Comprehensive income attributable to QVC, Inc. stockholder $ 527 473 66 (539 ) 527 Consolidating Statements of Comprehensive Income Year ended December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 642 432 215 (647 ) 642 Foreign currency translation adjustments, net of tax (83 ) — (83 ) 83 (83 ) Total comprehensive income 559 432 132 (564 ) 559 Comprehensive income attributable to noncontrolling interest (39 ) — (39 ) 39 (39 ) Comprehensive income attributable to QVC, Inc. stockholder $ 520 432 93 (525 ) 520 |
Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Current Period | Consolidating Statements of Cash Flows Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 641 507 54 — 1,202 Investing activities: Capital expenditures (103 ) (4 ) (45 ) — (152 ) Expenditures for television distribution rights — (50 ) — — (50 ) Decrease (increase) in restricted cash 3 — (1 ) — 2 Changes in other noncurrent assets (1 ) — — — (1 ) Intercompany investing activities 545 (1,507 ) — 962 — Net cash provided by (used in) investing activities 444 (1,561 ) (46 ) 962 (201 ) Financing activities: Principal payments of debt and capital lease obligations (2,268 ) — (10 ) — (2,278 ) Principal borrowings of debt from senior secured credit facility 2,162 — — — 2,162 Dividends paid to Liberty Interactive Corporation (866 ) — — — (866 ) Dividends paid to noncontrolling interest — — (40 ) — (40 ) Other financing activities (16 ) — — — (16 ) Net short-term intercompany debt (repayments) borrowings (170 ) (1,267 ) 1,437 — — Other intercompany financing activities 73 2,257 (1,368 ) (962 ) — Net cash (used in) provided by financing activities (1,085 ) 990 19 (962 ) (1,038 ) Effect of foreign exchange rate changes on cash and cash equivalents — — 13 — 13 Net (decrease) increase in cash and cash equivalents — (64 ) 40 — (24 ) Cash and cash equivalents, beginning of period 2 97 185 — 284 Cash and cash equivalents, end of period $ 2 33 225 — 260 |
Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Prior Period | Consolidating Statements of Cash Flows Year ended December 31, 2016 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 555 408 215 — 1,178 Investing activities: Capital expenditures (141 ) (2 ) (36 ) — (179 ) Expenditures for television distribution rights — (38 ) — — (38 ) Decrease in restricted cash 1 — — — 1 Other investing activities (12 ) — 9 — (3 ) Changes in other noncurrent assets (2 ) — 1 — (1 ) Intercompany investing activities 452 131 — (583 ) — Net cash provided by (used in) investing activities 298 91 (26 ) (583 ) (220 ) Financing activities: Principal payments of debt and capital lease obligations (1,727 ) — (6 ) — (1,733 ) Principal borrowings of debt from senior secured credit facility 1,505 — — — 1,505 Payment of debt origination fees (2 ) — — — (2 ) Dividends paid to Liberty (703 ) — — — (703 ) Dividends paid to noncontrolling interest — — (39 ) — (39 ) Other financing activities (9 ) — — — (9 ) Net short-term intercompany debt borrowings (repayments) 61 (1,517 ) 1,456 — — Other intercompany financing activities 24 1,003 (1,610 ) 583 — Net cash used in financing activities (851 ) (514 ) (199 ) 583 (981 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (20 ) — (20 ) Net increase (decrease) in cash and cash equivalents 2 (15 ) (30 ) — (43 ) Cash and cash equivalents, beginning of period — 112 215 — 327 Cash and cash equivalents, end of period $ 2 97 185 — 284 Consolidating Statements of Cash Flows Year ended December 31, 2015 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 274 314 440 — 1,028 Investing activities: Capital expenditures (154 ) (9 ) (52 ) — (215 ) Expenditures for television distribution rights — (68 ) (4 ) — (72 ) Decrease (increase) in restricted cash 1 — (1 ) — — Other investing activities 2 — — — 2 Changes in other noncurrent assets 12 — (12 ) — — Intercompany investing activities 525 413 — (938 ) — Net cash provided by (used in) investing activities 386 336 (69 ) (938 ) (285 ) Financing activities: Principal payments of debt and capital lease obligations (2,170 ) — (7 ) — (2,177 ) Principal borrowings of debt from senior secured credit facility 2,974 — — — 2,974 Payment of debt origination fees (3 ) — — — (3 ) Payment of bond premium fees (18 ) — — — (18 ) Dividends paid to Liberty (1,485 ) — — — (1,485 ) Dividends paid to noncontrolling interest — — (36 ) — (36 ) Other financing activities (15 ) — — — (15 ) Net short-term intercompany debt (repayments) borrowings (822 ) 2,192 (1,370 ) — — Other intercompany financing activities 877 (2,853 ) 1,038 938 — Net cash used in financing activities (662 ) (661 ) (375 ) 938 (760 ) Effect of foreign exchange rate changes on cash and cash equivalents — — (3 ) — (3 ) Net decrease in cash and cash equivalents (2 ) (11 ) (7 ) — (20 ) Cash and cash equivalents, beginning of period 2 123 222 — 347 Cash and cash equivalents, end of period $ — 112 215 — 327 |
Quarterly Financial Informati43
Quarterly Financial Information (Tables) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Schedule of Quarterly Financial Information | Year ended December 31, 2017 (in millions) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net revenue $ 1,965 1,979 2,010 2,817 Operating income $ 271 306 274 496 Net income $ 135 151 166 520 Net income attributable to QVC, Inc. stockholder $ 124 141 154 507 | Year ended December 31, 2016 (in millions) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Net revenue $ 2,013 2,063 1,948 2,658 Operating income $ 261 307 231 404 Net income $ 133 168 116 225 Net income attributable to QVC, Inc. stockholder $ 125 157 107 215 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | Oct. 01, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 29, 2017 | Jun. 23, 2016 |
General business information | ||||||
Dividends paid to noncontrolling interest | $ 40 | $ 39 | $ 36 | |||
Line of credit facility maximum borrowing capacity | $ 2,650 | |||||
Liberty | ||||||
General business information | ||||||
Dividends paid to Liberty | $ 910 | |||||
CNR Home Shopping Co., Ltd. | ||||||
General business information | ||||||
Equity method investment, ownership percentage | 49.00% | |||||
HSN, Inc. | ||||||
General business information | ||||||
Remaining ownership interest acquired by parent | 62.00% | |||||
QVC-Japan | ||||||
General business information | ||||||
Investment owned, percent of net assets | 60.00% | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 40.00% | |||||
QVC [Member] | Senior secured credit facility | ||||||
General business information | ||||||
Line of credit facility maximum borrowing capacity | $ 2,250 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 4,995 | $ 5,035 |
Exchange rate fluctuations | 80 | (40) |
Ending balance | 5,075 | 4,995 |
QVC-U.S. | ||
Goodwill [Roll Forward] | ||
Beginning balance | 4,190 | 4,190 |
Ending balance | 4,190 | 4,190 |
QVC-Germany | ||
Goodwill [Roll Forward] | ||
Beginning balance | 267 | 278 |
Exchange rate fluctuations | 38 | (11) |
Ending balance | 305 | 267 |
QVC-Japan | ||
Goodwill [Roll Forward] | ||
Beginning balance | 258 | 251 |
Exchange rate fluctuations | 11 | 7 |
Ending balance | 269 | 258 |
QVC-U.K. | ||
Goodwill [Roll Forward] | ||
Beginning balance | 161 | 193 |
Exchange rate fluctuations | 15 | (32) |
Ending balance | 176 | 161 |
QVC-Italy | ||
Goodwill [Roll Forward] | ||
Beginning balance | 119 | 123 |
Exchange rate fluctuations | 16 | (4) |
Ending balance | $ 135 | $ 119 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies Valuation Allowances and Reserves (Details) - Allowance for Sales Returns [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance beginning of year | $ 93 | $ 103 | $ 109 |
Additions- charged to earnings | 982 | 1,010 | 1,213 |
Deductions | (979) | (1,020) | (1,219) |
Balance end of year | $ 96 | $ 93 | $ 103 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies Other Details (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 15, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Interest rate swap arrangements (note 8) | $ 2 | $ 2 | ||
Cash Equivalents, at Carrying Value | 42 | 113 | ||
Customer returns | 1,811 | 1,815 | $ 1,939 | |
Advertising Expense | 86 | $ 84 | $ 87 | |
Derivative, notional amount | $ 125 | |||
CNR Home Shopping Co., Ltd. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 40 | |||
Equity method investment, ownership percentage | 49.00% |
Summary of Significant Accoun48
Summary of Significant Accounting Policies Change In Accounting Principal (Details) $ in Millions | Jan. 01, 2018USD ($) |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 14 |
Accounts Receivable Accounts 49
Accounts Receivable Accounts Receivable (Accounts Receivable) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)installment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | $ 1,479 | $ 1,343 | |
Less allowance for doubtful accounts | (91) | (97) | |
Accounts receivable, net | 1,388 | 1,246 | |
QVC-Easy Pay plan | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 1,151 | 1,054 | |
Credit Card Receivable [Member] | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 263 | 221 | |
Other receivables [Member] | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 65 | 68 | |
SG&A | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Finance income from company branded credit card issued by financial institution | $ 105 | $ 100 | $ 92 |
Minimum | QVC-Easy Pay plan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of installments plan permits for customers | installment | 2 | ||
Maximum | QVC-Easy Pay plan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of installments plan permits for customers | installment | 5 |
Accounts Receivable Accounts 50
Accounts Receivable Accounts Receivable (Activity in the Allowance for Doubtful Accounts) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance beginning of year | $ 97 | $ 86 | $ 91 |
Additions- charged to expense | 72 | 107 | 82 |
Deductions- write-offs | (78) | (96) | (87) |
Balance end of year | $ 91 | $ 97 | $ 86 |
Property and Equipment, Net P51
Property and Equipment, Net Property and Equipment, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 2,179 | $ 2,035 |
Less: accumulated depreciation | (1,174) | (1,004) |
Property and equipment, net | $ 1,005 | 1,031 |
Property, Plant and Equipment, Useful Life | 20 years | |
Property and equipment, disposals | $ 40 | 65 |
Land | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 85 | 81 |
Buildings and improvements | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 1,100 | 1,048 |
Furniture and other equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 497 | 447 |
Broadcast equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 134 | 135 |
Computer equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 160 | 146 |
Transponders and terrestrial transmitter (note 9) | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 170 | 150 |
Projects in progress | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 33 | $ 28 |
Minimum | Buildings and improvements | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 8 years | |
Minimum | Furniture and other equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 2 years | |
Minimum | Broadcast equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Minimum | Computer equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 2 years | |
Minimum | Transponders and terrestrial transmitter (note 9) | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 8 years | |
Maximum | Buildings and improvements | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 20 years | |
Maximum | Furniture and other equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 8 years | |
Maximum | Broadcast equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Maximum | Computer equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 4 years | |
Maximum | Transponders and terrestrial transmitter (note 9) | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 15 years |
Television Distribution Right52
Television Distribution Rights, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Television distribution rights, net | $ 78 | $ 183 | |
Percentage of Net Sales | 5.00% | ||
Television distribution rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Television distribution rights | $ 730 | 2,279 | |
Less accumulated amortization | (652) | (2,096) | |
Television distribution rights, net | $ 78 | 183 | |
Acquired finite-lived intangible assets, weighted average useful life | 2 years 11 months | ||
Amortization | $ 157 | 193 | $ 189 |
Commission Expense | $ 298 | $ 298 | $ 293 |
Television Distribution Right53
Television Distribution Rights, Net (Future Amortization Expense) (Details) - Television distribution rights $ in Millions | Dec. 31, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,018 | $ 44 |
2,019 | 20 |
2,020 | 9 |
2,021 | 3 |
2,022 | $ 2 |
Other Intangible Assets, Net (O
Other Intangible Assets, Net (Other Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Gross cost | |||
Purchased and internally developed software | $ 710 | $ 646 | |
Affiliate and customer relationships | 2,419 | 2,397 | |
Debt origination fees | 8 | 8 | |
Trademarks (indefinite life) | 2,428 | 2,428 | |
Other intangible assets (excluding goodwill), gross | 5,565 | 5,479 | |
Accumulated amortization | |||
Purchased and internally developed software | (548) | (466) | |
Affiliate and customer relationships | (2,409) | (2,274) | |
Debt origination fees | (3) | (1) | |
Other intangible assets (excluding goodwill), accumulated amortization | (2,960) | (2,741) | |
Other intangible assets, net | |||
Purchased and internally developed software | 162 | 180 | |
Affiliate and customer relationships | 10 | 123 | |
Debt origination fees | 5 | 7 | |
Other intangible assets (excluding goodwill), net | 2,605 | 2,738 | |
Reduction of intangible assets due to disposal of assets | 20 | 52 | |
Amortization of other intangible assets | $ 207 | $ 270 | $ 265 |
Purchased and internally developed software | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 2 years 1 month | ||
Affiliate and customer relationships | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 2 years 9 months | ||
Debt origination fees | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 3 years 5 months | ||
Other Intangible Assets | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 2 years 2 months |
Other Intangible Assets, Net (F
Other Intangible Assets, Net (Future Amortization Expense) (Details) - Other Intangible Assets $ in Millions | Dec. 31, 2017USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2,018 | $ 93 |
2,019 | 57 |
2,020 | 26 |
2,021 | 1 |
2,022 | $ 0 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Liabilities [Abstract] | ||
Accounts payable non-trade | $ 279 | $ 215 |
Income taxes | 128 | 120 |
Accrued compensation and benefits | 119 | 92 |
Allowance for sales returns | 96 | 93 |
Sales and other taxes | 71 | 62 |
Deferred revenue | 58 | 69 |
Accrued interest | 58 | 58 |
Other | 63 | 60 |
Accrued liabilities | $ 872 | $ 769 |
Long-Term Debt (Debt) (Details)
Long-Term Debt (Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Build to suit lease obligation | $ 101 | $ 105 |
Less debt issuance costs, net | (22) | (28) |
Total debt and capital lease obligations | 5,190 | 5,289 |
Less current portion | (17) | (14) |
Long-term portion of debt and capital lease obligations | 5,173 | 5,275 |
3.125% Senior Secured Notes due 2019, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 399 | 399 |
5.125% Senior Secured Notes due 2022 | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 500 | 500 |
4.375% Senior Secured Notes due 2023, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 750 | 750 |
4.85% Senior Secured Notes due 2024, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 600 | 600 |
4.45% Senior Secured Notes due 2025, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 599 | 599 |
5.45% Senior Secured Notes due 2034, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 399 | 399 |
5.95% Senior Secured Notes due 2043, net of original issue discount | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 300 | 300 |
Senior secured credit facility | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 1,496 | 1,596 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | $ 68 | $ 69 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 23, 2016 | Jun. 15, 2016 | Aug. 21, 2014 | Mar. 18, 2014 | Mar. 18, 2013 | Jul. 02, 2012 | |
Debt Instrument [Line Items] | |||||||||
Line of credit facility maximum borrowing capacity | $ 2,650 | ||||||||
Line of credit facility standby letter of credit | 300 | ||||||||
Line of credit facility uncommitted loan | 1,500 | ||||||||
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 remaining borrowing capacity | $ 877 | ||||||||
Line of credit facility interest rate at period end | 3.00% | ||||||||
Derivative, notional amount | $ 125 | ||||||||
Interest rate swap arrangements (note 8) | $ 2 | $ 2 | |||||||
Loss on extinguishment of debt | $ 0 | 0 | $ 21 | ||||||
Debt weighted average interest rate | 4.20% | ||||||||
Letters of Credit Outstanding, Amount | $ 16 | $ 18 | |||||||
3.125% Senior Secured Notes due 2019, net of original issue discount | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 3.125% | 3.125% | |||||||
Total debt | $ 400 | ||||||||
Debt issuance price percentage | 99.828% | ||||||||
5.125% Senior Secured Notes due 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 5.125% | 5.125% | |||||||
Total debt | $ 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% | 4.375% | |||||||
Total debt | $ 750 | ||||||||
Debt issuance price percentage | 99.968% | ||||||||
4.85% Senior Secured Notes due 2024, net of original issue discount | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 4.85% | 4.85% | |||||||
Total debt | $ 600 | ||||||||
Debt issuance price percentage | 99.927% | ||||||||
4.45% Senior Secured Notes due 2025, net of original issue discount | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 4.45% | 4.45% | |||||||
Total debt | $ 600 | ||||||||
Debt issuance price percentage | 99.86% | ||||||||
5.45% Senior Secured Notes due 2034, net of original issue discount | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 5.45% | 5.45% | |||||||
Total debt | $ 400 | ||||||||
Debt issuance price percentage | 99.784% | ||||||||
5.95% Senior Secured Notes due 2043, net of original issue discount | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument interest rate stated percentage | 5.95% | 5.95% | |||||||
Total debt | $ 300 | ||||||||
Debt issuance price percentage | 99.973% | ||||||||
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% | ||||||||
Tranche One, Shared with Related Party [Member] | Senior secured credit facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility maximum borrowing capacity | 400 | ||||||||
Tranche One, Shared with Related Party [Member] | Standby Letters of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility standby letter of credit | 50 | ||||||||
QVC [Member] | Senior secured credit facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility maximum borrowing capacity | 2,250 | ||||||||
QVC Portion Maturing on March 9, 2020 [Member] | Senior secured credit facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility maximum borrowing capacity | $ 140 |
Leases and Transponder Servic59
Leases and Transponder Service Agreements (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Capital leases | |||
2,018 | $ 15 | ||
2,019 | 15 | ||
2,020 | 12 | ||
2,021 | 12 | ||
2,022 | 8 | ||
Thereafter | 10 | ||
Total | 72 | ||
Operating leases | |||
2,018 | 21 | ||
2,019 | 16 | ||
2,020 | 13 | ||
2,021 | 10 | ||
2,022 | 7 | ||
Thereafter | 73 | ||
Total | 140 | ||
Built to suit lease | |||
2,018 | 5 | ||
2,019 | 6 | ||
2,020 | 6 | ||
2,021 | 6 | ||
2,022 | 6 | ||
Thereafter | 58 | ||
Total | $ 87 | ||
Capital leased assets, number of agreements | 15 | ||
Capital transponder monthly lease expense | $ 1 | ||
Capital leases income statement depreciation expense | 13 | $ 12 | $ 12 |
Imputed interest on capital lease | 4 | ||
Operating leases expense | $ 23 | 24 | $ 24 |
Area of lease (in sqft) | ft² | 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 | ||
Capital expenditures incurred but not yet paid | $ 89 | ||
Property and equipment useful life | 20 years |
Stock Options and Other Share60
Stock Options and Other Share-Based Awards Stock Options and Other Share- Based Awards (Stock Options Activity) (Details) - Liberty Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
QVCA | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at beginning of the year (in shares) | 12,536,399 | |
Granted (in shares) | 3,114,919 | |
Transferred from zulily (in shares) | 12,860 | |
Exercised (in shares) | (2,857,069) | |
Forfeited (in shares) | (954,641) | |
Outstanding at end of the year (in shares) | 11,852,468 | 12,536,399 |
Weight average exercise price | ||
Outstanding at beginning of year (in dollars per share) | $ 22.80 | |
Granted (in dollars per share) | 23.69 | |
Transferred from zulily (in dollars per share) | 24.13 | |
Exercised (in dollars per share) | 16.74 | |
Forfeited (in dollars per share) | 26.58 | |
Outstanding at ending of year (in dollars per share) | $ 24.19 | $ 22.80 |
Additional Stock Option Disclosures | ||
Aggregate intrinsic value (000s) | $ 19,663 | $ 16,511 |
Weighted average remaining life (years) | 4 years 6 months | 4 years 2 months |
Exercisable at December 31, 2017 | ||
Options (in shares) | 5,424,770 | |
Weighted average exercise price (in dollars per share) | $ 22.74 | |
Aggregate intrinsic value (000s) | $ 17,572 | |
Weighted average remaining life (years) | 3 years 6 months | |
LVNTA | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at beginning of the year (in shares) | 302,467 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (302,467) | |
Forfeited (in shares) | 0 | |
Outstanding at end of the year (in shares) | 0 | 302,467 |
Weight average exercise price | ||
Outstanding at beginning of year (in dollars per share) | $ 16.69 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 16.69 | |
Forfeited (in dollars per share) | 0 | |
Outstanding at ending of year (in dollars per share) | $ 0 | $ 16.69 |
Additional Stock Option Disclosures | ||
Aggregate intrinsic value (000s) | $ 0 | $ 6,104 |
Weighted average remaining life (years) | 0 years | 1 year 2 months |
Exercisable at December 31, 2017 | ||
Options (in shares) | 0 | |
Weighted average exercise price (in dollars per share) | $ 0 | |
Aggregate intrinsic value (000s) | $ 0 | |
Weighted average remaining life (years) | 0 years |
Stock Options and Other Share61
Stock Options and Other Share-Based Awards Stock Options and Other Share-Based Awards (Stock Options Valuations Assumptions) (Details) - Liberty Incentive Plan - QVCA - Stock options | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Black- Scholes option pricing model valuation assumptions | |||
Expected volatility | 30.30% | 27.40% | 39.70% |
Expected term (years) | 5 years 11 months | 6 years 1 month | 5 years 11 months |
Risk free interest rate | 2.10% | 1.60% | 1.70% |
Stock Options and Other Share62
Stock Options and Other Share-Based Awards Stock Options and Other Share-Based Awards (Restricted Stock Activity) (Details) - Liberty Incentive Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
QVCA | |||
Restricted shares | |||
Outstanding at beginning of the year (in shares) | 907,826 | ||
Granted (in shares) | 677,376 | ||
Transferred from zulily (in shares) | 21,630 | ||
Lapsed (in shares) | (391,330) | ||
Forfeited (in shares) | (127,526) | ||
Outstanding at end of the year (in shares) | 1,087,976 | 907,826 | |
Weighted average grant fair value | |||
Outstanding at beginning of the year (in dollars per share) | $ 26.65 | ||
Granted (in dollars per share) | 22.49 | $ 25.86 | $ 29.22 |
Transferred from zulily (in dollars per share) | 25.16 | ||
Lapsed (in dollars per share) | 25.98 | ||
Forfeited (in dollars per share) | 25.72 | ||
Outstanding at end of the year (in dollars per share) | $ 24.38 | $ 26.65 | |
LVNTA | |||
Restricted shares | |||
Outstanding at beginning of the year (in shares) | 13,892 | ||
Granted (in shares) | 0 | ||
Lapsed (in shares) | (9,153) | ||
Forfeited (in shares) | (678) | ||
Outstanding at end of the year (in shares) | 4,061 | 13,892 | |
Weighted average grant fair value | |||
Outstanding at beginning of the year (in dollars per share) | $ 46.57 | ||
Granted (in dollars per share) | 0 | ||
Lapsed (in dollars per share) | 44.14 | ||
Forfeited (in dollars per share) | 50.01 | ||
Outstanding at end of the year (in dollars per share) | $ 51.47 | $ 46.57 |
Stock Options and Other Share63
Stock Options and Other Share-Based Awards Stock Options and Other Share- Based Awards (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 31 | $ 32 | $ 31 |
Liberty Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options exercised during period | 32 | 28 | 60 |
Unrecognized compensation cost related to options | $ 44 | ||
Unrecognized compensation cost, period for recognition | 2 years 8 months | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 10 | 8 | 7 |
Liberty Incentive Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 21 | 21 | 24 |
Liberty Incentive Plan | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 10 | $ 11 | $ 7 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 17 | ||
Unrecognized compensation cost, period for recognition | 2 years 5 months | ||
Liberty Incentive Plan | QVCA | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value of options granted during period | $ 7.86 | $ 7.84 | $ 11.20 |
Granted (in dollars per share) | $ 22.49 | $ 25.86 | $ 29.22 |
Income Taxes Income Taxes (Comp
Income Taxes Income Taxes (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
U.S. federal | $ 361 | $ 326 | $ 384 |
State and local | 28 | 29 | 20 |
Foreign jurisdictions | 87 | 73 | 75 |
Total | 476 | 428 | 479 |
Deferred: | |||
U.S. federal | (317) | (31) | (86) |
State and local | (7) | (8) | 3 |
Foreign jurisdictions | 0 | (4) | (7) |
Total | (324) | (43) | (90) |
Total income tax expense | $ 152 | $ 385 | $ 389 |
Income Taxes Income Taxes (Pre-
Income Taxes Income Taxes (Pre-tax Income, Domestic and Foreign) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
Consolidated pre- tax income | $ 1,124 | $ 1,027 | $ 1,051 |
QVC-U.S. | |||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
U.S. pre-tax income | 915 | 859 | 909 |
QVC-International | |||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
Foreign pre- tax income | $ 209 | $ 168 | $ 142 |
Income Taxes Income Taxes (Effe
Income Taxes Income Taxes (Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation, Percent [Abstract] | |||
Provision at statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 1.00% | 1.30% | 1.40% |
Foreign taxes | 0.00% | (0.30%) | 0.20% |
Foreign earnings repatriation | 3.90% | 0.20% | 0.20% |
Valuation allowance | 1.00% | 1.00% | 0.90% |
Permanent differences | (2.10%) | (0.60%) | (0.20%) |
Impact of Tax Cuts and Jobs Act | (25.40%) | ||
Impact of foreign currency tax regulation | 0.40% | 1.00% | 0.00% |
Other, net | (0.30%) | (0.10%) | (0.50%) |
Total income tax expense | 13.50% | 37.50% | 37.00% |
Income Taxes Income Taxes (Defe
Income Taxes Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts | $ 21 | $ 38 |
Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986 | 25 | 36 |
Allowance for sales returns | 24 | 36 |
Deferred Tax Assets, Deferred Income | 29 | 41 |
Deferred compensation | 20 | 30 |
Unrecognized federal and state tax benefits | 11 | 23 |
Operating Loss Carryforwards | 33 | 22 |
Accrued liabilities | 30 | 38 |
Other | 0 | 6 |
Subtotal | 193 | 270 |
Valuation allowance | (33) | (22) |
Total deferred tax assets | 160 | 248 |
Deferred tax liabilities: | ||
Depreciation and amortization | (584) | (1,009) |
Cumulative translation of foreign currencies | (17) | (13) |
Deferred tax liability, Investment in Subsidiaries | (28) | (4) |
Deferred Tax Liabilities, Other | (4) | 0 |
Total deferred tax liabilities | (633) | (1,026) |
Net deferred tax liability | $ (473) | $ (778) |
Income Taxes Income Taxes (Reco
Income Taxes Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance at January 1, 2017 | $ 55 |
Increases related to prior year tax positions | 1 |
Decreases related to prior year tax positions | (8) |
Decreases related to settlements with taxing authorities | (4) |
Increases related to current year tax positions | 6 |
Balance at December 31, 2017 | $ 50 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Contingency [Line Items] | ||||
Provision at statutory rate | 35.00% | 35.00% | 35.00% | |
Income tax benefit | $ 152 | $ 385 | $ 389 | |
Tax benefit recognized | 9 | 7 | ||
Unrecognized tax benefits that would impact effective tax rate | 39 | |||
Federal tax effect on unrecognized tax benefits | 11 | |||
Significant change in unrecognized tax benefits is reasonably possible, amount of unrecorded benefit | $ 1 | |||
UNITED STATES | ||||
Income Tax Contingency [Line Items] | ||||
Provision at statutory rate | 35.00% | |||
Liberty | Tax Agreement | ||||
Income Tax Contingency [Line Items] | ||||
Capital contribution paid to parent company for taxes | $ 31 | $ 18 | ||
Cash dividends paid to parent company for taxes | 64 | |||
Current tax payments due to related parties | 60 | $ 75 | ||
Tax Year 2017 | ||||
Income Tax Contingency [Line Items] | ||||
Income tax benefit | $ 284.6 | |||
Subsequent Event [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Provision at statutory rate | 21.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 29, 2017 | Jun. 30, 2016 | Jun. 23, 2016 | |
Related Party Transaction [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 2,650 | |||||
Letters of Credit Outstanding, Amount | $ 16 | $ 18 | ||||
zulily, llc | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amounts of transactions | 9 | 12 | $ 1 | |||
Letters of Credit Outstanding, Amount | 10 | |||||
CommerceHub, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | 3 | $ 3 | $ 3 | |||
HSN, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Remaining ownership interest acquired by parent | 62.00% | |||||
CommerceHub, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership Percentage by Parent | 99.00% | |||||
QVC [Member] | Senior secured credit facility | ||||||
Related Party Transaction [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | 2,250 | |||||
Tranche One, Shared with Related Party [Member] | Senior secured credit facility | ||||||
Related Party Transaction [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 400 | |||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 267 |
Assets and Liabilities Measur71
Assets and Liabilities Measured at Fair Value (Details) € in Millions, $ in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 15, 2016EUR (€) | Jun. 15, 2016USD ($) | Dec. 31, 2015EUR (€) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, notional amount | $ 125 | ||||
Non-current assets: | |||||
Interest rate swap arrangements (note 8) | $ 2 | $ 2 | |||
Designated as Hedging Instrument | Foreign Exchange Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, notional amount | € | € 500 | ||||
Designated as Hedging Instrument | Net Investment Hedging | Foreign Exchange Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Derivative, notional amount | € | € 500 | ||||
Recurring | |||||
Current assets: | |||||
Cash equivalents | 42 | 113 | |||
Non-current assets: | |||||
Interest rate swap arrangements (note 8) | 2 | 2 | |||
Long-term liabilities: | |||||
Debt (note 8) | 5,132 | 5,092 | |||
Recurring | Level 1 | |||||
Current assets: | |||||
Cash equivalents | 42 | 113 | |||
Recurring | Level 2 | |||||
Non-current assets: | |||||
Interest rate swap arrangements (note 8) | 2 | 2 | |||
Long-term liabilities: | |||||
Debt (note 8) | $ 5,132 | $ 5,092 |
Information about QVC's Opera72
Information about QVC's Operating Segments (Revenue and Adjusted OIBDA by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 2,658 | $ 1,948 | $ 2,063 | $ 2,013 | $ 8,771 | $ 8,682 | $ 8,743 |
Adjusted OIBDA | 1,897 | 1,840 | 1,894 | ||||||||
QVC-U.S. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 6,140 | 6,120 | 6,257 | ||||||||
Adjusted OIBDA | 1,446 | 1,435 | 1,467 | ||||||||
QVC-International | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 2,631 | 2,562 | 2,486 | ||||||||
Adjusted OIBDA | $ 451 | $ 405 | $ 427 |
Information about QVC's Opera73
Information about QVC's Operating Segments (Depreciation/Amortization by Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Depreciation | $ 155 | $ 142 | $ 134 |
Amortization | 364 | 463 | 454 |
QVC-U.S. | |||
Segment Reporting Information [Line Items] | |||
Depreciation | 93 | 78 | 63 |
Amortization | 330 | 414 | 404 |
QVC-International | |||
Segment Reporting Information [Line Items] | |||
Depreciation | 62 | 64 | 71 |
Amortization | $ 34 | $ 49 | $ 50 |
Information about QVC's Opera74
Information about QVC's Operating Segments (Total Assets and CAPEX by Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Total assets | $ 11,550 | $ 11,545 |
Capital expenditures | 152 | 179 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,429 | 9,595 |
Capital expenditures | 116 | 152 |
QVC-International | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,121 | 1,950 |
Capital expenditures | $ 36 | $ 27 |
Information about QVC's Opera75
Information about QVC's Operating Segments (Long-lived Assets by Segment) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 1,005 | $ 1,031 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 559 | 594 |
QVC-International | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 446 | $ 437 |
Information about QVC's Opera76
Information about QVC's Operating Segments (Reconciliation of Adjusted OIBDA to Income before Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | |||
Adjusted OIBDA | $ 1,897 | $ 1,840 | $ 1,894 |
Stock-based compensation | (31) | (32) | (31) |
Depreciation and amortization | (519) | (605) | (588) |
Equity in losses of investee | (3) | (6) | (9) |
Gains on financial instruments | 0 | 2 | 0 |
Interest expense, net | (214) | (210) | (208) |
Foreign currency (loss) gain | (6) | 38 | 14 |
Loss on extinguishment of debt | 0 | 0 | (21) |
Income before income taxes | $ 1,124 | $ 1,027 | $ 1,051 |
Information about QVC's Opera77
Information about QVC's Operating Segments (Net Revenue by Geographical Area) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues from External Customers | |||||||||||
Net revenue | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 2,658 | $ 1,948 | $ 2,063 | $ 2,013 | $ 8,771 | $ 8,682 | $ 8,743 |
Japan | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 934 | 897 | 808 | ||||||||
Germany | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 899 | 865 | 837 | ||||||||
United Kingdom | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 640 | 654 | 718 | ||||||||
Other countries | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 158 | 146 | 123 | ||||||||
QVC-U.S. | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | $ 6,140 | $ 6,120 | $ 6,257 |
Information about QVC's Opera78
Information about QVC's Operating Segments (Property and Equipment By Geographical Area) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Property and equipment [Line Items] | ||
Property and equipment, net | $ 1,005 | $ 1,031 |
Germany | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 164 | 153 |
Japan | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 143 | 145 |
United Kingdom | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 84 | 83 |
Other countries | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 55 | 56 |
QVC-U.S. | ||
Property and equipment [Line Items] | ||
Property and equipment, net | $ 559 | $ 594 |
Information about QVC's Opera79
Information about QVC's Operating Segments Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
QVC-International | ||
Segment Reporting Information [Line Items] | ||
Segment Cost Allocation | $ 36 | $ 31 |
Other Comprehensive Income (Acc
Other Comprehensive Income (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Foreign currency translation adjustments | |||
Beginning balance | $ (224) | $ (140) | $ (39) |
Other comprehensive income attributable to QVC, Inc. stockholder | 131 | (84) | (101) |
Ending balance | (93) | (224) | (140) |
AOCL | |||
Beginning balance | (224) | (140) | (39) |
Other comprehensive income attributable to QVC, Inc. stockholder | 131 | (84) | (101) |
Ending balance | $ (93) | $ (224) | $ (140) |
Other Comprehensive Income (Com
Other Comprehensive Income (Component of Other Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency translation adjustments before tax | $ 156 | $ (96) | $ (119) |
Tax (expense) benefit from foreign currency translation gain (loss) | (21) | 13 | 17 |
Foreign currency translation adjustments, net-of-tax | $ 135 | $ (83) | $ (102) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 2 Months Ended | |
Mar. 01, 2018 | Dec. 31, 2017 | |
Subsequent Event [Line Items] | ||
Line of credit facility remaining borrowing capacity | $ 877 | |
Liberty | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Dividends declared to parent company | $ 233 | |
Subsequent event dividend to parent | 183 | |
Tranche One, Shared with Related Party [Member] | Senior secured credit facility | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit facility remaining borrowing capacity | $ 283 |
Guarantor_Non-Guarantor Subsi83
Guarantor/Non-Guarantor Subsidiary Financial Information (Narrative) (Details) | Dec. 31, 2017 |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
Subsidiary Guarantors, Ownership Percentage | 100.00% |
Guarantor_Non-Guarantor Subsi84
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Financial Position) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | |||||
Cash and cash equivalents | $ 260 | $ 284 | $ 327 | $ 347 | |
Restricted cash | 8 | 10 | |||
Accounts receivable, net | 1,388 | 1,246 | |||
Inventories | 1,019 | 950 | |||
Prepaid expenses and other current assets | 51 | 46 | |||
Total current assets | 2,726 | 2,536 | |||
Property and equipment, net | 1,005 | 1,031 | |||
Television distribution rights, net | 78 | 183 | |||
Goodwill | 5,075 | 4,995 | 5,035 | ||
Other intangible assets, net | 2,605 | 2,738 | |||
Other noncurrent assets | 61 | 62 | |||
Investments in subsidiaries | 0 | 0 | |||
Total assets | 11,550 | 11,545 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 17 | 14 | |||
Accounts payable-trade | 756 | 678 | |||
Accrued liabilities | 872 | 769 | |||
Intercompany accounts payable (receivable) | 0 | 0 | |||
Total current liabilities | 1,645 | 1,461 | |||
Long-term portion of debt and capital lease obligations | 5,173 | 5,275 | |||
Deferred income taxes | 473 | 778 | |||
Other long-term liabilities | 117 | 136 | |||
Total liabilities | 7,408 | 7,650 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 4,032 | 3,795 | |||
Noncontrolling interest | 110 | 100 | |||
Total equity | 4,142 | 3,895 | 4,118 | $ 5,046 | |
Total liabilities and equity | 11,550 | 11,545 | |||
Parent issuer- QVC, Inc. | |||||
Current assets: | |||||
Cash and cash equivalents | 2 | 2 | 0 | 2 | |
Restricted cash | 5 | 8 | |||
Accounts receivable, net | 1,076 | 958 | |||
Inventories | 758 | 726 | |||
Prepaid expenses and other current assets | 28 | 22 | |||
Total current assets | 1,869 | 1,716 | |||
Property and equipment, net | 295 | 317 | |||
Television distribution rights, net | 0 | 0 | |||
Goodwill | 4,190 | 4,190 | |||
Other intangible assets, net | 539 | 666 | |||
Other noncurrent assets | 14 | 15 | |||
Investments in subsidiaries | 3,579 | 3,389 | |||
Total assets | 10,486 | 10,293 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 3 | 3 | |||
Accounts payable-trade | 455 | 425 | |||
Accrued liabilities | 366 | 74 | |||
Intercompany accounts payable (receivable) | 453 | 623 | |||
Total current liabilities | 1,277 | 1,125 | |||
Long-term portion of debt and capital lease obligations | 5,033 | 5,132 | |||
Deferred income taxes | 52 | 145 | |||
Other long-term liabilities | 92 | 96 | |||
Total liabilities | 6,454 | 6,498 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 4,032 | 3,795 | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | 4,032 | 3,795 | |||
Total liabilities and equity | 10,486 | 10,293 | |||
Combined subsidiary guarantors | |||||
Current assets: | |||||
Cash and cash equivalents | 33 | 97 | 112 | 123 | |
Restricted cash | 0 | 0 | |||
Accounts receivable, net | 0 | 0 | |||
Inventories | 0 | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | |||
Total current assets | 33 | 97 | |||
Property and equipment, net | 60 | 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 | 1,626 | 1,030 | |||
Total assets | 3,845 | 3,406 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 0 | 0 | |||
Accounts payable-trade | 0 | 0 | |||
Accrued liabilities | 227 | 234 | |||
Intercompany accounts payable (receivable) | (1,513) | (246) | |||
Total current liabilities | (1,286) | (12) | |||
Long-term portion of debt and capital lease obligations | 0 | 0 | |||
Deferred income taxes | 468 | 707 | |||
Other long-term liabilities | 0 | 0 | |||
Total liabilities | (818) | 695 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 4,663 | 2,711 | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | 4,663 | 2,711 | |||
Total liabilities and equity | 3,845 | 3,406 | |||
Combined non-guarantor subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 225 | 185 | 215 | 222 | |
Restricted cash | 3 | 2 | |||
Accounts receivable, net | 312 | 288 | |||
Inventories | 261 | 224 | |||
Prepaid expenses and other current assets | 23 | 24 | |||
Total current assets | 824 | 723 | |||
Property and equipment, net | 650 | 651 | |||
Television distribution rights, net | 0 | 16 | |||
Goodwill | 885 | 805 | |||
Other intangible assets, net | 18 | 23 | |||
Other noncurrent assets | 47 | 47 | |||
Investments in subsidiaries | 0 | 0 | |||
Total assets | 2,424 | 2,265 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 14 | 11 | |||
Accounts payable-trade | 301 | 253 | |||
Accrued liabilities | 279 | 461 | |||
Intercompany accounts payable (receivable) | 1,060 | (377) | |||
Total current liabilities | 1,654 | 348 | |||
Long-term portion of debt and capital lease obligations | 140 | 143 | |||
Deferred income taxes | (47) | (74) | |||
Other long-term liabilities | 25 | 40 | |||
Total liabilities | 1,772 | 457 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 542 | 1,708 | |||
Noncontrolling interest | 110 | 100 | |||
Total equity | 652 | 1,808 | |||
Total liabilities and equity | 2,424 | 2,265 | |||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||
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 | (5,205) | (4,419) | |||
Total assets | (5,205) | (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 | (5,205) | (4,419) | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | (5,205) | (4,419) | |||
Total liabilities and equity | $ (5,205) | $ (4,419) |
Guarantor_Non-Guarantor Subsi85
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 2,658 | $ 1,948 | $ 2,063 | $ 2,013 | $ 8,771 | $ 8,682 | $ 8,743 |
Operating costs and expenses: | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 5,598 | 5,540 | 5,528 | ||||||||
Operating | 601 | 606 | 607 | ||||||||
Selling, general and administrative, including stock-based compensation | 706 | 728 | 745 | ||||||||
Depreciation | 155 | 142 | 134 | ||||||||
Amortization | 364 | 463 | 454 | ||||||||
Operating expenses | 7,424 | 7,479 | 7,468 | ||||||||
Operating income | 496 | 274 | 306 | 271 | 404 | 231 | 307 | 261 | 1,347 | 1,203 | 1,275 |
Other (expense) income: | |||||||||||
Equity in losses of investee | (3) | (6) | (9) | ||||||||
Gains on financial instruments | 0 | 2 | 0 | ||||||||
Interest expense, net | (214) | (210) | (208) | ||||||||
Foreign currency gain (loss) | (6) | 38 | 14 | ||||||||
Loss on extinguishment of debt | 0 | 0 | (21) | ||||||||
Intercompany interest (expense) income | 0 | 0 | 0 | ||||||||
Nonoperating (expense) income | (223) | (176) | (224) | ||||||||
Income before income taxes | 1,124 | 1,027 | 1,051 | ||||||||
Income tax expense | (152) | (385) | (389) | ||||||||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | ||||||||
Net income | 520 | 166 | 151 | 135 | 225 | 116 | 168 | 133 | 972 | 642 | 662 |
Less net income attributable to the noncontrolling interest | (46) | (38) | (34) | ||||||||
Net income attributable to QVC, Inc. stockholder | $ 507 | $ 154 | $ 141 | $ 124 | $ 215 | $ 107 | $ 157 | $ 125 | 926 | 604 | 628 |
Parent issuer- QVC, Inc. | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | 6,298 | 6,179 | 6,416 | ||||||||
Operating costs and expenses: | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 3,877 | 3,855 | 4,018 | ||||||||
Operating | 433 | 414 | 338 | ||||||||
Selling, general and administrative, including stock-based compensation | 1,097 | 1,116 | 1,180 | ||||||||
Depreciation | 67 | 57 | 43 | ||||||||
Amortization | 187 | 245 | 233 | ||||||||
Operating expenses | 5,661 | 5,687 | 5,812 | ||||||||
Operating income | 637 | 492 | 604 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | 0 | 0 | 0 | ||||||||
Gains on financial instruments | 2 | ||||||||||
Interest expense, net | (215) | (211) | (205) | ||||||||
Foreign currency gain (loss) | (5) | 17 | 15 | ||||||||
Loss on extinguishment of debt | (21) | ||||||||||
Intercompany interest (expense) income | (12) | (2) | (7) | ||||||||
Nonoperating (expense) income | (232) | (194) | (218) | ||||||||
Income before income taxes | 405 | 298 | 386 | ||||||||
Income tax expense | (129) | (114) | (136) | ||||||||
Equity in earnings of subsidiaries, net of tax | 696 | 458 | 412 | ||||||||
Net income | 972 | 642 | 662 | ||||||||
Less net income attributable to the noncontrolling interest | (46) | (38) | (34) | ||||||||
Net income attributable to QVC, Inc. stockholder | 926 | 604 | 628 | ||||||||
Combined subsidiary guarantors | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | 1,000 | 1,001 | 962 | ||||||||
Operating costs and expenses: | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 157 | 169 | 109 | ||||||||
Operating | 265 | 258 | 265 | ||||||||
Selling, general and administrative, including stock-based compensation | 2 | 1 | 1 | ||||||||
Depreciation | 7 | 7 | 8 | ||||||||
Amortization | 142 | 168 | 163 | ||||||||
Operating expenses | 573 | 603 | 546 | ||||||||
Operating income | 427 | 398 | 416 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | 0 | 0 | 0 | ||||||||
Gains on financial instruments | 0 | ||||||||||
Interest expense, net | 1 | 0 | 0 | ||||||||
Foreign currency gain (loss) | 1 | 0 | (1) | ||||||||
Loss on extinguishment of debt | 0 | ||||||||||
Intercompany interest (expense) income | 96 | 1 | (51) | ||||||||
Nonoperating (expense) income | 98 | 1 | (52) | ||||||||
Income before income taxes | 525 | 399 | 364 | ||||||||
Income tax expense | 80 | (156) | (153) | ||||||||
Equity in earnings of subsidiaries, net of tax | 47 | 189 | 262 | ||||||||
Net income | 652 | 432 | 473 | ||||||||
Less net income attributable to the noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income attributable to QVC, Inc. stockholder | 652 | 432 | 473 | ||||||||
Combined non-guarantor subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | 2,848 | 2,787 | 2,717 | ||||||||
Operating costs and expenses: | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 1,744 | 1,726 | 1,624 | ||||||||
Operating | 277 | 274 | 293 | ||||||||
Selling, general and administrative, including stock-based compensation | 428 | 346 | 404 | ||||||||
Depreciation | 81 | 78 | 83 | ||||||||
Amortization | 35 | 50 | 58 | ||||||||
Operating expenses | 2,565 | 2,474 | 2,462 | ||||||||
Operating income | 283 | 313 | 255 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | (3) | (6) | (9) | ||||||||
Gains on financial instruments | 0 | ||||||||||
Interest expense, net | 0 | 1 | (3) | ||||||||
Foreign currency gain (loss) | (2) | 21 | 0 | ||||||||
Loss on extinguishment of debt | 0 | ||||||||||
Intercompany interest (expense) income | (84) | 1 | 58 | ||||||||
Nonoperating (expense) income | (89) | 17 | 46 | ||||||||
Income before income taxes | 194 | 330 | 301 | ||||||||
Income tax expense | (103) | (115) | (100) | ||||||||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | ||||||||
Net income | 91 | 215 | 201 | ||||||||
Less net income attributable to the noncontrolling interest | (46) | (38) | (34) | ||||||||
Net income attributable to QVC, Inc. stockholder | 45 | 177 | 167 | ||||||||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | (1,375) | (1,285) | (1,352) | ||||||||
Operating costs and expenses: | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | (180) | (210) | (223) | ||||||||
Operating | (374) | (340) | (289) | ||||||||
Selling, general and administrative, including stock-based compensation | (821) | (735) | (840) | ||||||||
Depreciation | 0 | 0 | 0 | ||||||||
Amortization | 0 | 0 | 0 | ||||||||
Operating expenses | (1,375) | (1,285) | (1,352) | ||||||||
Operating income | 0 | 0 | 0 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | 0 | 0 | 0 | ||||||||
Gains on financial instruments | 0 | ||||||||||
Interest expense, net | 0 | 0 | 0 | ||||||||
Foreign currency gain (loss) | 0 | 0 | 0 | ||||||||
Loss on extinguishment of debt | 0 | ||||||||||
Intercompany interest (expense) income | 0 | 0 | 0 | ||||||||
Nonoperating (expense) income | 0 | 0 | 0 | ||||||||
Income before income taxes | 0 | 0 | 0 | ||||||||
Income tax expense | 0 | 0 | 0 | ||||||||
Equity in earnings of subsidiaries, net of tax | (743) | (647) | (674) | ||||||||
Net income | (743) | (647) | (674) | ||||||||
Less net income attributable to the noncontrolling interest | 46 | 38 | 34 | ||||||||
Net income attributable to QVC, Inc. stockholder | $ (697) | $ (609) | $ (640) |
Guarantor_Non-Guarantor Subsi86
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | $ 520 | $ 166 | $ 151 | $ 135 | $ 225 | $ 116 | $ 168 | $ 133 | $ 972 | $ 642 | $ 662 |
Foreign currency translation adjustments, net of tax | 135 | (83) | (102) | ||||||||
Total comprehensive income | 1,107 | 559 | 560 | ||||||||
Comprehensive income attributable to noncontrolling interest | (50) | (39) | (33) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | 1,057 | 520 | 527 | ||||||||
Parent issuer- QVC, Inc. | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 972 | 642 | 662 | ||||||||
Foreign currency translation adjustments, net of tax | 135 | (83) | (102) | ||||||||
Total comprehensive income | 1,107 | 559 | 560 | ||||||||
Comprehensive income attributable to noncontrolling interest | (50) | (39) | (33) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | 1,057 | 520 | 527 | ||||||||
Combined subsidiary guarantors | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 652 | 432 | 473 | ||||||||
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 | ||||||||
Total comprehensive income | 652 | 432 | 473 | ||||||||
Comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | 652 | 432 | 473 | ||||||||
Combined non-guarantor subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 91 | 215 | 201 | ||||||||
Foreign currency translation adjustments, net of tax | 135 | (83) | (102) | ||||||||
Total comprehensive income | 226 | 132 | 99 | ||||||||
Comprehensive income attributable to noncontrolling interest | (50) | (39) | (33) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | 176 | 93 | 66 | ||||||||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | (743) | (647) | (674) | ||||||||
Foreign currency translation adjustments, net of tax | (135) | 83 | 102 | ||||||||
Total comprehensive income | (878) | (564) | (572) | ||||||||
Comprehensive income attributable to noncontrolling interest | 50 | 39 | 33 | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | $ (828) | $ (525) | $ (539) |
Guarantor_Non-Guarantor Subsi87
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Cash Flow) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | $ 1,202 | $ 1,178 | $ 1,028 |
Investing activities: | |||
Capital expenditures | (152) | (179) | (215) |
Expenditures for television distribution rights | (50) | (38) | (72) |
Decreases in restricted cash | 2 | 1 | 0 |
Other investing activities | 0 | (3) | 2 |
Changes in other noncurrent assets | (1) | (1) | 0 |
Intercompany investing activities | 0 | 0 | 0 |
Net cash used in investing activities | (201) | (220) | (285) |
Financing activities: | |||
Principal payments of debt and capital lease obligations | (2,278) | (1,733) | (2,177) |
Principal borrowings of debt from senior secured credit facility | 2,162 | 1,505 | 2,974 |
Payment of debt origination fees | 0 | (2) | (3) |
Payment of bond premium fees | 0 | 0 | (18) |
Dividends paid to Liberty Interactive Corporation | (866) | (703) | (1,485) |
Dividends paid to noncontrolling interest | (40) | (39) | (36) |
Other financing activities | (16) | (9) | (15) |
Net short-term intercompany debt (repayments) borrowings | 0 | 0 | 0 |
Other intercompany financing activities | 0 | 0 | 0 |
Net cash used in financing activities | (1,038) | (981) | (760) |
Effect of foreign exchange rate changes on cash and cash equivalents | 13 | (20) | (3) |
Net (decrease) increase in cash and cash equivalents | (24) | (43) | (20) |
Cash and cash equivalents, beginning of period | 284 | 327 | |
Cash and cash equivalents, end of period | 260 | 284 | 327 |
Parent issuer- QVC, Inc. | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | 641 | 555 | 274 |
Investing activities: | |||
Capital expenditures | (103) | (141) | (154) |
Expenditures for television distribution rights | 0 | 0 | 0 |
Decreases in restricted cash | 3 | 1 | 1 |
Other investing activities | (12) | 2 | |
Changes in other noncurrent assets | (1) | (2) | 12 |
Intercompany investing activities | 545 | 452 | 525 |
Net cash used in investing activities | 444 | 298 | 386 |
Financing activities: | |||
Principal payments of debt and capital lease obligations | (2,268) | (1,727) | (2,170) |
Principal borrowings of debt from senior secured credit facility | 2,162 | 1,505 | 2,974 |
Payment of debt origination fees | (2) | (3) | |
Payment of bond premium fees | (18) | ||
Dividends paid to Liberty Interactive Corporation | (866) | (703) | (1,485) |
Dividends paid to noncontrolling interest | 0 | 0 | 0 |
Other financing activities | (16) | (9) | (15) |
Net short-term intercompany debt (repayments) borrowings | (170) | 61 | (822) |
Other intercompany financing activities | 73 | 24 | 877 |
Net cash used in financing activities | (1,085) | (851) | (662) |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 2 | (2) |
Cash and cash equivalents, beginning of period | 2 | 0 | |
Cash and cash equivalents, end of period | 2 | 2 | 0 |
Combined subsidiary guarantors | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | 507 | 408 | 314 |
Investing activities: | |||
Capital expenditures | (4) | (2) | (9) |
Expenditures for television distribution rights | (50) | (38) | (68) |
Decreases in restricted cash | 0 | 0 | 0 |
Other investing activities | 0 | 0 | |
Changes in other noncurrent assets | 0 | 0 | 0 |
Intercompany investing activities | (1,507) | 131 | 413 |
Net cash used in investing activities | (1,561) | 91 | 336 |
Financing activities: | |||
Principal payments of debt and capital lease obligations | 0 | 0 | 0 |
Principal borrowings of debt from senior secured credit facility | 0 | 0 | 0 |
Payment of debt origination fees | 0 | 0 | |
Payment of bond premium fees | 0 | ||
Dividends paid to Liberty Interactive Corporation | 0 | 0 | 0 |
Dividends paid to noncontrolling interest | 0 | 0 | 0 |
Other financing activities | 0 | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | (1,267) | (1,517) | 2,192 |
Other intercompany financing activities | 2,257 | 1,003 | (2,853) |
Net cash used in financing activities | 990 | (514) | (661) |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | (64) | (15) | (11) |
Cash and cash equivalents, beginning of period | 97 | 112 | |
Cash and cash equivalents, end of period | 33 | 97 | 112 |
Combined non-guarantor subsidiaries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | 54 | 215 | 440 |
Investing activities: | |||
Capital expenditures | (45) | (36) | (52) |
Expenditures for television distribution rights | 0 | 0 | (4) |
Decreases in restricted cash | (1) | 0 | (1) |
Other investing activities | 9 | 0 | |
Changes in other noncurrent assets | 0 | 1 | (12) |
Intercompany investing activities | 0 | 0 | 0 |
Net cash used in investing activities | (46) | (26) | (69) |
Financing activities: | |||
Principal payments of debt and capital lease obligations | (10) | (6) | (7) |
Principal borrowings of debt from senior secured credit facility | 0 | 0 | 0 |
Payment of debt origination fees | 0 | 0 | |
Payment of bond premium fees | 0 | ||
Dividends paid to Liberty Interactive Corporation | 0 | 0 | 0 |
Dividends paid to noncontrolling interest | (40) | (39) | (36) |
Other financing activities | 0 | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | 1,437 | 1,456 | (1,370) |
Other intercompany financing activities | (1,368) | (1,610) | 1,038 |
Net cash used in financing activities | 19 | (199) | (375) |
Effect of foreign exchange rate changes on cash and cash equivalents | 13 | (20) | (3) |
Net (decrease) increase in cash and cash equivalents | 40 | (30) | (7) |
Cash and cash equivalents, beginning of period | 185 | 215 | |
Cash and cash equivalents, end of period | 225 | 185 | 215 |
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash provided by operating activities | 0 | 0 | 0 |
Investing activities: | |||
Capital expenditures | 0 | 0 | 0 |
Expenditures for television distribution rights | 0 | 0 | 0 |
Decreases in restricted cash | 0 | 0 | 0 |
Other investing activities | 0 | 0 | |
Changes in other noncurrent assets | 0 | 0 | 0 |
Intercompany investing activities | 962 | (583) | (938) |
Net cash used in investing activities | 962 | (583) | (938) |
Financing activities: | |||
Principal payments of debt and capital lease obligations | 0 | 0 | 0 |
Principal borrowings of debt from senior secured credit facility | 0 | 0 | 0 |
Payment of debt origination fees | 0 | 0 | |
Payment of bond premium fees | 0 | ||
Dividends paid to Liberty Interactive Corporation | 0 | 0 | 0 |
Dividends paid to noncontrolling interest | 0 | 0 | 0 |
Other financing activities | 0 | 0 | 0 |
Net short-term intercompany debt (repayments) borrowings | 0 | 0 | 0 |
Other intercompany financing activities | (962) | 583 | 938 |
Net cash used in financing activities | (962) | 583 | 938 |
Effect of foreign exchange rate changes on cash and cash equivalents | 0 | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 | |
Cash and cash equivalents, end of period | $ 0 | $ 0 | $ 0 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Cash contributions to defined contribution plans | $ 18 | $ 23 | $ 24 |
Quarterly Financial Informati89
Quarterly Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenue | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 2,658 | $ 1,948 | $ 2,063 | $ 2,013 | $ 8,771 | $ 8,682 | $ 8,743 |
Operating income | 496 | 274 | 306 | 271 | 404 | 231 | 307 | 261 | 1,347 | 1,203 | 1,275 |
Net income | 520 | 166 | 151 | 135 | 225 | 116 | 168 | 133 | 972 | 642 | 662 |
Net income attributable to QVC, Inc. stockholder | $ 507 | $ 154 | $ 141 | $ 124 | $ 215 | $ 107 | $ 157 | $ 125 | $ 926 | $ 604 | $ 628 |