Document and Entity Information
Document and Entity Information Document $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)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, 2018 |
Document Fiscal Year Focus | 2,018 |
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, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 543 | $ 282 |
Restricted cash | 7 | 8 |
Accounts receivable, less allowance for doubtful accounts of $112 at December 31, 2018 and $91 at December 31, 2017 | 1,787 | 1,680 |
Inventories | 1,280 | 1,204 |
Prepaid expenses and other current assets | 216 | 71 |
Total current assets | 3,833 | 3,245 |
Noncurrent assets: | ||
Property and equipment, net of accumulated depreciation of $1,281 at December 31, 2018 and $1,174 at December 31, 2017 | 1,165 | 1,170 |
Television Distribution Rights, Net | 140 | 78 |
Goodwill | 5,972 | 5,979 |
Other intangible assets, net | 3,666 | 3,770 |
Other noncurrent assets | 80 | 77 |
Total assets | 14,856 | 14,319 |
Current liabilities: | ||
Current portion of debt and capital lease obligations | 421 | 17 |
Accounts payable-trade | 1,008 | 958 |
Accrued liabilities | 1,026 | 1,057 |
Total current liabilities | 2,455 | 2,032 |
Noncurrent liabilities: | ||
Long-term portion of debt and capital lease obligations | 4,699 | 5,633 |
Deferred income taxes | 700 | 730 |
Other long-term liabilities | 173 | 128 |
Total liabilities | 8,027 | 8,523 |
QVC, Inc. stockholder's equity: | ||
Common stock, $0.01 par value, 1 authorized share | 0 | 0 |
Additional paid-in capital | 9,123 | 8,576 |
Accumulated deficit | (2,269) | (2,797) |
Accumulated other comprehensive loss | (144) | (93) |
Total QVC, Inc. stockholder's equity | 6,710 | 5,686 |
Noncontrolling interest | 119 | 110 |
Total equity | 6,829 | 5,796 |
Total liabilities and equity | $ 14,856 | $ 14,319 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for doubtful accounts | $ 112 | $ 91 |
Accumulated depreciation | $ 1,281 | $ 1,174 |
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net revenue | $ 3,555 | $ 2,569 | $ 2,556 | $ 2,602 | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 11,282 | $ 8,771 | $ 8,682 |
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 7,248 | 5,598 | 5,540 | ||||||||
Operating costs and expenses: | |||||||||||
Operating | 881 | 601 | 606 | ||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 1,200 | 744 | |||||||||
Selling, General and Administrative Expense | 728 | ||||||||||
Depreciation | 174 | 155 | 142 | ||||||||
Amortization | 237 | 364 | 463 | ||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 30 | 0 | 0 | ||||||||
Operating expenses | 9,770 | 7,462 | 7,479 | ||||||||
Operating income | 461 | 305 | 390 | 356 | 458 | 274 | 306 | 271 | 1,512 | 1,309 | 1,203 |
Other (expense) income: | |||||||||||
Equity in losses of investee | (3) | (3) | (6) | ||||||||
(Losses) gains on financial instruments | (2) | 0 | 2 | ||||||||
Interest expense, net | (243) | (214) | (210) | ||||||||
Foreign currency (loss) gain | 0 | (6) | 38 | ||||||||
Loss on extinguishment of debt | (2) | 0 | 0 | ||||||||
Nonoperating expense | (250) | (223) | (176) | ||||||||
Income before income taxes | 1,262 | 1,086 | 1,027 | ||||||||
Income tax expense | (334) | (139) | (385) | ||||||||
Net income | 291 | 181 | 244 | 212 | 495 | 166 | 151 | 135 | 928 | 947 | 642 |
Less net income attributable to the noncontrolling interest | (46) | (46) | (38) | ||||||||
Net income attributable to QVC, Inc. stockholder | $ 278 | $ 170 | $ 233 | $ 201 | $ 482 | $ 154 | $ 141 | $ 124 | $ 882 | $ 901 | $ 604 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income Statement - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income | $ 291 | $ 181 | $ 244 | $ 212 | $ 495 | $ 166 | $ 151 | $ 135 | $ 928 | $ 947 | $ 642 |
Foreign currency translation adjustments, net of tax | (48) | 135 | (83) | ||||||||
Total comprehensive income | 880 | 1,082 | 559 | ||||||||
Comprehensive income attributable to noncontrolling interest | (49) | (50) | (39) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | $ 831 | $ 1,032 | $ 520 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net income | $ 928 | $ 947 | $ 642 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in losses of investee | 3 | 3 | 6 |
Increase (Decrease) in Other Deferred Liability | (30) | (329) | (43) |
Foreign currency loss (gain) | 0 | 6 | (38) |
Depreciation | 174 | 155 | 142 |
Amortization | 237 | 364 | 463 |
Change in fair value of financial instruments and noncash interest | 8 | 4 | 5 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 30 | 0 | 0 |
Loss on extinguishment of debt | 2 | 0 | 0 |
Stock-based compensation | 46 | 39 | 32 |
Change in other long-term liabilities | 42 | (19) | (8) |
Effects of changes in working capital items | (284) | 32 | (23) |
Net cash provided by operating activities | 1,156 | 1,202 | 1,178 |
Investing activities: | |||
Capital expenditures | (228) | (152) | (179) |
Expenditures for television distribution rights | (140) | (50) | (38) |
Changes in other noncurrent assets | (16) | (1) | (1) |
Other investing activities | (29) | 0 | (3) |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | 22 | 0 |
Payments to Acquire Businesses, Net of Cash Acquired [Abstract] | |||
Net cash used in investing activities | (413) | (181) | (221) |
Financing activities: | |||
Principal payments of debt and capital lease obligations | (3,541) | (2,278) | (1,733) |
Principal borrowings of debt from senior secured credit facilities | 2,750 | 2,162 | 1,505 |
Proceeds from issuance of senior secured notes | 225 | 0 | 0 |
Payment of debt origination fees | (14) | 0 | (2) |
Capital contributions received from Qurate Retail, Inc. | 520 | 0 | 0 |
Payments of Dividends | 367 | 866 | 703 |
Dividends paid to noncontrolling interest | (40) | (40) | (39) |
Other financing activities | (18) | (16) | (9) |
Net cash used in financing activities | (485) | (1,038) | (981) |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 2 | 13 | (20) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 260 | (4) | (44) |
Cash, cash equivalents and restricted cash, end of year | 543 | 282 | |
Effects of changes in working capital items: | |||
(Increase) decrease in accounts receivable | (110) | (127) | 117 |
Increase in inventories | (113) | (43) | (38) |
(Increase) decrease in prepaid expenses and other current assets | (97) | 0 | 29 |
Increase in accounts payable-trade | 11 | 50 | 22 |
Increase (decrease) in accrued liabilities and other | 25 | 152 | (153) |
Effects of changes in working capital items | (284) | 32 | (23) |
Cash paid for taxes-to Qurate Retail Inc. | 273 | 363 | 395 |
Cash paid for taxes-other | 134 | 81 | 105 |
Cash paid for interest | 241 | 211 | 210 |
Cash, cash equivalents and restricted cash, beginning of year | 290 | 294 | 338 |
Cash, cash equivalents and restricted cash, end of year | $ 550 | $ 290 | $ 294 |
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, 2015 | $ 4,118 | $ 0 | $ 6,827 | $ (2,669) | $ (140) | $ 100 |
Common Stock, Shares, Outstanding (beginning) 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 | |
Capital contributions received from Qurate Retail, Inc. | 0 | |||||
Dividends paid to Qurate Retail, Inc. and noncontrolling interest and other | (742) | 0 | (703) | 0 | (39) | |
Impact of tax liability allocation and indemnification agreement with Qurate Retail, Inc. | (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 | 947 | 0 | 901 | 0 | 46 | |
Foreign currency translation adjustments, net of tax | 135 | 0 | 0 | 131 | 4 | |
Capital contributions received from Qurate Retail, Inc. | 0 | |||||
Dividends paid to Qurate Retail, Inc. and noncontrolling interest and other | (906) | 0 | (866) | 0 | (40) | |
Impact of tax liability allocation and indemnification agreement with Qurate Retail, Inc. | 31 | 31 | 0 | 0 | 0 | |
Withholding taxes on net share settlements of stock-based compensation | (16) | (16) | 0 | 0 | 0 | |
Business Combination, Consideration Transferred | (1,671) | 1,671 | 0 | 0 | 0 | |
Stock-based compensation | 39 | 39 | 0 | 0 | 0 | |
Balance at Dec. 31, 2017 | 5,796 | $ 0 | 8,576 | (2,797) | (93) | 110 |
Common Stock, Shares, Outstanding (ending) at Dec. 31, 2017 | 1 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 928 | 0 | 882 | 0 | 46 | |
Foreign currency translation adjustments, net of tax | (48) | 0 | 0 | (51) | 3 | |
Capital contributions received from Qurate Retail, Inc. | 520 | 520 | 0 | 0 | 0 | |
Dividends paid to Qurate Retail, Inc. and noncontrolling interest and other | (407) | 0 | (367) | 0 | (40) | |
Withholding taxes on net share settlements of stock-based compensation | (19) | (19) | 0 | 0 | 0 | |
Stock-based compensation | 46 | 46 | 0 | 0 | 0 | |
Balance at Dec. 31, 2018 | 6,829 | $ 0 | 9,123 | (2,269) | (144) | 119 |
Common Stock, Shares, Outstanding (ending) at Dec. 31, 2018 | 1 | |||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 13 | $ 0 | $ 13 | $ 0 | $ 0 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
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 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, HSN, HSN2 and Beauty iQ. The Company's U.S. programming is also available on QVC.com and HSN.com, QVC's U.S. websites; mobile applications via streaming video; over-the-air broadcasters; and over-the-top content platforms (Roku, Apple TV, Amazon Fire, Facebook, etc.). QVC's digital platforms enable consumers to purchase goods offered on our broadcast programming, along with a wide assortment of products that are available only on QVC.com. QVC.com and our other digital platforms (including our mobile applications, social pages and others) are natural extensions of our business model, allowing customers to engage in our shopping experience wherever they are, with live or on-demand content customized to the device they are using. In addition to offering video content, QVC.com allows shoppers to browse, research, compare and perform targeted searches for products, read customer reviews, control the order-entry process and conveniently access their QVC account. Internationally, QVC's 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 Style and QVC2 in Germany and QVC Beauty, QVC Extra and QVC Style in the U.K. Similar to the U.S., our international businesses also engage customers via websites, mobile applications and social pages. 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, 2018, 2017 and 2016 , QVC-Japan paid dividends to Mitsui of $40 million , $40 million and $39 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 broadcast network and an e-commerce 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 Qurate Retail, Inc. ("Qurate Retail") (formerly Liberty Interactive Corporation) (Nasdaq: QRTEA and QRTEB), which owns interests in a broad range of digital commerce businesses, including Qurate Retail's other wholly-owned subsidiary zulily, llc ("zulily"), as well as other minority investments. QVC is part of the Qurate Retail Group ("QRG"), formerly QVC Group, a portfolio of brands including QVC, zulily and the Cornerstone brands ("CBI"). On March 9, 2018, Qurate Retail, GCI Liberty, Inc. ("GCI Liberty") (formerly General Communication, Inc.), an Alaska corporation, and Liberty Interactive LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Qurate Retail completed transactions whereby Qurate Retail acquired GCI Liberty through a reorganization in which certain assets and liabilities attributed to Qurate Retail’s Ventures Group were contributed to GCI Liberty in exchange for a controlling interest in GCI Liberty. Qurate Retail then effected a tax-free separation of its controlling interest in the combined company. Qurate Retail's QVC Group common stock became the only outstanding common stock of Qurate Retail. On October 1, 2015, Qurate Retail acquired all of the outstanding shares of zulily (now known as zulily, llc), an online retailer. 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 December 31, 2018, QVC amended and restated its senior secured credit facility (the "Fourth Amended and Restated Credit Agreement") increasing the revolving credit facility from $2.65 billion to $3.65 billion as explained further in note 8. On December 29, 2017, Qurate Retail completed the acquisition of the remaining 62% ownership interest of HSN, Inc. ("HSN") it did not previously own in an all-stock transaction. On December 31, 2018, after a series of transactions to separate HSN's other businesses from its channel operations, Qurate Retail transferred its 100% ownership interest in the restructured HSN, which consisted only of channel operations, and is referenced to as HSN in these consolidated financial statements, to QVC through a transaction among entities under common control. As a result of the transaction, the assets and liabilities of HSN were transferred from Qurate Retail at Qurate Retail's historical cost to QVC through an equity contribution. As a result of the common control transaction with Qurate Retail, the Company retrospectively adjusted certain balances within the consolidated financial statements as of and for the year ended December 31, 2017, in order to combine the financial results of the Company and HSN since Qurate Retail's acquisition of HSN on December 29, 2017. The Company's interim consolidated financial statements for the year ended December 31, 2018 were also retrospectively adjusted. All periods presented are prepared on a combined basis and are referred to as the consolidated financial statements herein. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. On October 17, 2018, QRG announced a series of initiatives designed to better position its HSN and QVC- U.S. businesses (“QRG Initiatives”). As part of the QRG Initiatives, QVC will close its fulfillment centers in Lancaster, Pennsylvania and Roanoke, Virginia and has entered into an agreement to lease a new fulfillment center in Bethlehem, Pennsylvania, commencing in 2019 (see note 9). QVC recorded transaction related costs of $60 million during the year ended December 31, 2018, which primarily related to severance and other QRG initiatives. In the fourth quarter of 2018, QVC recorded a charge related to the potential closure of its operations in France. For the year ended December 31, 2018, QVC has recorded $9 million in severance expenses and $4 million in inventory obsolescence related to these potential exit activities. 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, 2018 | |
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 $233 million and $42 million at December 31, 2018 and 2017 , respectively. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents approximate their fair values (Level 1). See note 15. (b) Restricted cash Restricted cash at December 31, 2018 and 2017 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, 2018 and 2017 were as follows: (in millions) QVC-U.S. QVC-International HSN Total Balance as of December 31, 2016 $ 4,190 805 — 4,995 Common control transaction (1) — — 904 904 Exchange rate fluctuations — 80 — 80 Balance as of December 31, 2017 4,190 885 904 5,979 Purchase accounting adjustments (2) — — 18 18 Exchange rate fluctuations — (25 ) — (25 ) Balance as of December 31, 2018 $ 4,190 860 922 5,972 (1) As of December 31, 2018, QVC completed a common control transaction with Qurate Retail and subsequently recorded $904 million of goodwill related to HSN on December 29, 2017 as a result of the transaction. (2) Adjustment to HSN goodwill is due an increase in in the preliminary purchase price allocation by Qurate Retail during the year ended December 31, 2018. 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 reporting unit over the fair value is recorded as an impairment charge. For the year ended December 31, 2018 , QVC only performed a qualitative assessment for its QVC-U.S. and QVC-International reporting segments as it was more likely than not that the carrying values exceeded the fair values for each of the reporting units and performed a quantitative assessment for its HSN segment. There was no goodwill impairment recorded during the years ended December 31, 2018. 2017 or 2016. QVC utilizes a quantitative assessment to determine 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. The Company recorded a $30 million impairment loss related to an indefinite-lived intangible asset during the year ended December 31, 2018. There were no impairment losses record during the years ended December 31, 2017 or 2016. See Note 6 for more information. (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 For the year ended December 31, 2018, the Company recognizes revenue at the time of shipment to customers. As a result of the adoption of ASC 606 (defined below), the revenue for shipments in transit is no longer recorded as deferred revenue. For the years ended December 31, 2017 and 2016, the revenue for shipments in-transit was recorded as deferred revenue. Refer to the Adoption of New Accounting Pronouncements section below for further explanation. The Company's general policy is to allow customers the right to return merchandise. An allowance for returned merchandise is provided at the time revenue is recorded as a percentage of sales based on historical experience. Refer to note 10 for further explanation. (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 $138 million , $86 million and $84 million for the years ended December 31, 2018, 2017 and 2016 , 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 11, the Company and Qurate Retail 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) Common control transaction As a result of the common control transaction with Qurate Retail (see note 1), QVC received the following assets and liabilities as of December 29, 2017 through a capital contribution, which reflected the initial purchase price allocation for HSN by Qurate Retail (in millions): Cash and cash equivalents $ 22 Accounts receivable 292 Inventory 185 Property and equipment 165 Goodwill 904 Other intangible assets 1,165 Other assets 37 Accounts payable-trade and accrued liabilities (366 ) Long-term portion of debt (460 ) Deferred income taxes (263 ) Other long-term liabilities (10 ) Capital contribution from Qurate Retail, Inc. $ 1,671 Goodwill is calculated by Qurate Retail as the excess of the consideration transferred for the acquisition over the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, value associated with future customers, continued innovation and noncontractual relationships. Intangible assets acquired during 2017 were comprised of customer relationships of $425 million with a weighted average life of approximately 9 years , capitalized software of $7 million with a weighted average life of approximately 3 years , and technology of $105 million with a weighted average life of approximately 7 years . None of the acquired goodwill is expected to be deductible for tax purposes. Included in operating income for the year ended December 31, 2017 is $38 million related to HSN’s operations since the date of acquisition, which is primarily related to severance cost and stock-based compensation post acquisition and included within selling, general and administrative costs, including transaction related costs and stock-based compensation, within the consolidated statement of operations. HSN’s other results of operations are not included in our consolidated statement of operations for the year ended December 31, 2017 as the results of the final two days of 2017 were considered immaterial to the consolidated financial statements. The unaudited pro forma net revenue and income before income taxes of QVC, prepared utilizing the historical financial statements of HSN, giving effect to purchase accounting related adjustments made at the time of acquisition, as if the transaction discussed above occurred on January 1, 2016, are as follows: Years Ended December 31, (in millions) (unaudited) 2017 2016 Net revenue $ 11,114 11,161 Income before income taxes 1,163 1,222 The unaudited pro forma information is not representative of QVC’s future financial position, future results of operations or future cash flows nor does it reflect what QVC’s financial position, results of operations or cash flows would have been if Qurate Retail had previously purchased HSN and QVC controlled HSN during the periods presented. The unaudited pro forma information includes transaction related costs incurred as a result of the acquisition of $39 million in 2017. (t) 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 $38 million classified within other noncurrent assets on the consolidated balance sheet. (u) 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 Adoption of new accounting pronouncements On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU No. 2016-08, 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. On January 1, 2018, the Company adopted the new accounting standard Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, and all related amendments ("ASC 606") to all contracts using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as a $14 million adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company does not expect the adoption of the new revenue standard to have a material impact to its net income on an ongoing basis. Refer to the table below for the adoption of this guidance. 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 adopted this guidance on January 1, 2018 and there was no significant effect of the standard on its consolidated financial statements. The cumulative effect of the changes to accumulated deficit due to the adoption of ASC 606 and ASU No. 2016-16 were as follows: (in millions) Balance at December 31, 2017 Adjustments Due to ASC 606 Adjustments Due to ASU 2016-16 Balance at January 1, 2018 Assets: Inventories $ 1,204 (22 ) — 1,182 Prepaid expenses and other current assets 71 — (1 ) 70 Liabilities: Accrued liabilities 1,057 (36 ) — 1,021 Equity: Accumulated deficit $ (2,797 ) 14 (1 ) (2,784 ) In accordance with the new revenue standard requirements, the impact of adoption on our condensed consolidated statements of operations was as follows: Statements of Operations Year ended December 31, 2018 (in millions) As Reported Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Net revenue $ 11,282 11,143 139 Costs and expenses: Cost of goods sold (exclusive of depreciation and amortization) 7,248 7,238 10 Operating 881 879 2 Selling, general and administrative, including transaction related costs and stock-based compensation 1,200 1,082 118 Income tax expense 334 332 2 Net income $ 928 921 7 The effect of changes of adoption is primarily due to the timing of revenue recognition at QVC-Global and the classification of income for the Company's Private Label Credit Card ("PLCC") income. For the year ended December 31, 2018, revenue is recognized at the time of shipment to the Company's customers consistent with when control passes and PLCC income is recognized in net revenue. For the year ended December 31, 2017, revenue at QVC-Global was recognized at the time of delivery to the customers and deferred revenue was recorded to account for the shipments in-transit. In addition, PLCC income was recognized as an offset to selling, general and administrative expenses. The Company also recognized a separate $116 million asset (included in prepaid expenses and other current assets) related to the expected return of inventory and a $242 million liability (included in accrued liabilities) relating to its sales return reserve at December 31, 2018, instead of the net presentation of the liability in the amount of $119 million that was reported at December 31, 2017. 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 adopted this guidance during the first quarter of 2018 and there was no significant effect of the standard on its financial reporting. 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 adopted this guidance during the first quarter of 2018 and there was no significant effect of the standard 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 adopted this guidance during the first quarter of 2018 and has reclassified prior period balances in cash and cash equivalents within the consolidated statements of cash flows in order to conform with current period presentation. 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 adopted this guidance during the first quarter of 2018 and there was no significant effect of the standard on its consolidated financial statements. Accounting pronouncements issued but not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which revises the accounting related to lessee accounting. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which provided further clarification on the standard. 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 Company will adopt the amendments in this ASU on January 1, 2019 utilizing the modified retrospective transition approach and will not restate comparative periods. The Company plans to elect the package of practical expedients permitted under the transition guidance, which allows it to carryforward its historical lease classification, its determination regarding whether a contract contains a lease and any initial indirect costs that had existed prior to the adoption of this new standard. The Company also plans to elect to combine both lease and non-lease components and to elect to expense all short leases with a term of less than 12 months and not record a related right-of use asset and operating lease liability on the consolidated balance sheet. The Company expects that the discounted amount of 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. While the Company is still evaluating the impact on its disclosures, it does not expect the adoption of the new standard to have a material impact on the remaining consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), which addresses the effect of the change in the U.S. federal corporate tax rate due to the enactment of the December 22, 2017 Tax Cuts and Jobs Act (the "Tax Act") on items within accumulated other comprehensive income (loss). The guidance will be effective for the Company in the first quarter of 2019 with early adoption permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40) , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance will be effective for the Company in the first quarter of 2020 with early adoption permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. |
Accounts Receivable Accounts Re
Accounts Receivable Accounts Receivable | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | Accounts Receivable The Company offers an installment sales plan (known as Easy-Pay for QVC-U.S. and the U.K.; Q-Pay in Germany and Italy and FlexPay at HSN). The installment sales plan permits customers to pay for items in two or more installments. When the installment sales 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 account is subsequently billed in up to five additional monthly installments until the total purchase price of the products has been billed by the Company. In 2014, the Company 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 PLCC company in the U.S. The agreement with the Bank was amended and restated in March 2017 and December 2018. 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 PLCC, nor the extent that they will make payments on their outstanding balances. As a result of the adoption of ASC 606, $118 million of PLCC income was recorded in net revenue during the year ended December 31, 2018. Prior to adoption, the PLCC income was included as a reduction of selling, general and administrative expenses, which amounted to $105 million and $100 million for the years ended December 31, 2017 and 2016, 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) 2018 2017 Installment sales plan $ 1,533 1,396 Major credit cards and customers 269 295 Other receivables 97 80 1,899 1,771 Less allowance for doubtful accounts (112 ) (91 ) Accounts receivable, net $ 1,787 1,680 A summary of activity in the allowance for doubtful accounts was as follows: (in millions) Balance Additions- Deductions- Balance 2018 $ 91 112 (91 ) 112 2017 97 72 (78 ) 91 2016 86 107 (96 ) 97 The carrying value of accounts receivable, adjusted for the reserves described above, approximates fair value as of December 31, 2018, 2017 and 2016 |
Property and Equipment, Net Pro
Property and Equipment, Net Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 life Land $ 128 108 N/A Buildings and improvements 1,174 1,166 8 - 20 years Furniture and other equipment 543 546 2 -10 years Broadcast equipment 179 138 2 - 6 years Computer equipment 186 174 2 - 5 years Transponders and terrestrial transmitter (note 9) 178 170 8 - 15 years Projects in progress 58 42 N/A 2,446 2,344 Less: accumulated depreciation (1,281 ) (1,174 ) Property and equipment, net $ 1,165 1,170 Disposal of assets reduced property and equipment by $56 million and $40 million for the years ended December 31, 2018 and 2017 , respectively. |
Television Distribution Rights,
Television Distribution Rights, Net | 12 Months Ended |
Dec. 31, 2018 | |
Television Distribution Rights [Abstract] | |
Schedule of television distribution rights | Television distribution rights consisted of the following: December 31, (in millions) 2018 2017 Television distribution rights $ 723 730 Less accumulated amortization (583 ) (652 ) Television distribution rights, net $ 140 78 Television Distribution Rights, Net Television distribution rights consisted of the following: December 31, (in millions) 2018 2017 Television distribution rights $ 723 730 Less accumulated amortization (583 ) (652 ) Television distribution rights, net $ 140 78 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 2.2 years at December 31, 2018 . Amortization expense for television distribution rights was $77 million , $157 million and $193 million for the years ended December 31, 2018, 2017 and 2016 , respectively. The decrease in amortization expense is primarily due to the end of affiliation agreement terms for contracts in place at the time of Qurate Retail's acquisition of QVC in 2003. As of December 31, 2018 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): 2019 $ 74 2020 55 2021 9 2022 2 2023 — 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 $363 million for the year ended December 31, 2018 and $298 million for each of the years ended December 31, 2017 and 2016 , 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, 2018 | |
Other Intangible Assets [Abstract] | |
Intangible assets disclosure | Other Intangible Assets, Net Other intangible assets consisted of the following: December 31, 2018 2017 Weighted average remaining life (years) (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 890 (640 ) 250 822 (548 ) 274 4.0 Affiliate and customer relationships 2,831 (2,450 ) 381 2,845 (2,409 ) 436 7.9 Debt origination fees 10 — 10 8 (3 ) 5 5.0 Trademarks (indefinite life) 3,025 — 3,025 3,055 — 3,055 N/A $ 6,756 (3,090 ) 3,666 6,730 (2,960 ) 3,770 6.3 N/A - Not applicable. Disposal of assets reduced other intangible assets by $11 million and $20 million for the years ended December 31, 2018 and 2017 , respectively. Amortization expense for other intangible assets was $160 million , $207 million and $270 million for the years ended December 31, 2018, 2017 and 2016 , respectively. During the year ended December 31, 2018, a $30 million impairment loss was recorded due to the change in the fair value of trademarks (indefinite life) within the HSN operating segment. There was no impairment loss recorded for the years ended December 31, 2017 or 2016. As of December 31, 2018 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): 2019 $ 148 2020 117 2021 93 2022 64 2023 64 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | |
Accrued liabilities | Accrued Liabilities Accrued liabilities consisted of the following: December 31, (in millions) 2018 2017 Accounts payable non-trade $ 314 324 Allowance for sales returns 242 119 Accrued compensation and benefits 146 195 Sales and other taxes 101 82 Accrued interest 58 58 Accrued cable distribution fees 39 63 Income taxes 37 77 Deferred revenue 24 70 Other 65 69 $ 1,026 1,057 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 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 6.375% Senior Secured Notes due 2067 225 — Senior secured credit facilities 1,185 1,956 Capital lease obligations 188 68 Build to suit lease obligation — 101 Less debt issuance costs, net (25 ) (22 ) Total debt and capital lease obligations 5,120 5,650 Less current portion (421 ) (17 ) Long-term portion of debt and capital lease obligations $ 4,699 5,633 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. With the exception of the notes in item (h) below, the interest on QVC's senior secured notes is payable semi-annually. At December 31, 2018 , the 3.125% Senior Secured Notes due 2019 are classified within current portion of long-term debt as they mature in less than one year from December 31, 2018 . (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. (h) 6.375% Senior Secured Notes due 2067 On September 13, 2018, Q VC completed a registered debt offering for $225 million of 6.375% Senior Secured Notes due 2067 ("2067 Notes") at par. The proceeds were used to partially prepay existing indebtedness under QVC's senior secured credit facility and for general corporate purposes. The costs to complete the financing were deferred and are being amortized to interest expense over the term of the 2067 Notes. Interest on the 2067 Notes will be paid quarterly in March, June, September, and December, which commenced on December 15, 2018. QVC has the option to call the 2067 Notes after 5 years at par value. Senior Secured Credit Facility On December 31, 2018, QVC entered into the Fourth Amended and Restated Credit Agreement with zulily as borrowers (collectively, the “Borrowers”) which is a multi-currency facility that provides for a $3.65 billion revolving credit facility with a $450 million sub-limit for standby letters of credit and $1.8 billion of uncommitted incremental revolving loan commitments or incremental term loans. The Fourth 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 14). The remaining $3.25 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. 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 Qurate Retail, all of its loans must be repaid and its letters of credit cash collateralized. The facility matures on December 31, 2023. Payment of loans may be accelerated following certain customary events of default. QVC had $2,310 million available under the terms of the senior secured credit facility at December 31, 2018 , including the portion available under the $400 million tranche on which zulily may also borrow. The interest rate on the senior secured credit facility was 3.9% at December 31, 2018 . The purpose of the amendment was to, among other things, repay certain fees and expenses, finance working capital needs and general corporate purposes of the Company and its respective subsidiaries and make certain restricted payments and loans to the Company's respective parents and affiliates . The payment and performance of the Borrowers’ obligations under the Fourth Amended and Restated Credit Agreement are guaranteed by each of QVC’s Material Domestic Subsidiaries (as defined in the Fourth Amended and Restated Credit Agreement). Further, the borrowings under the Fourth 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 Fourth 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. On January 27, 2015, HSN entered into a $1.25 billion five-year syndicated credit agreement ("HSN Credit Agreement") which was secured by 100% of the voting equity securities of HSN's U.S. subsidiaries and 65% of HSN's first-tier foreign subsidiaries. Certain HSN subsidiaries had unconditionally guaranteed HSN's obligations under the HSN Credit Agreement. The HSN Credit Agreement, which included a $750 million revolving credit facility and a $500 million term loan, could be increased up to $1.75 billion subject to certain conditions and was set to expire on January 27, 2020. On December 29, 2017, the HSN Credit Agreement was amended, the outstanding balance on the term loan was repaid, and the revolving credit facility was increased to $1 billion . The maturity of the revolving credit facility was extended to December 29, 2022. Loans under the amended HSN Credit Agreement bore interest at a per annum rate equal to LIBOR plus a predetermined margin that ranged from 1.25% to 1.75% or the Base Rate (as defined in the amended HSN Credit Agreement) plus a predetermined margin that ranged from 0.25% to 0.75% . HSN paid a commitment fee ranging from 0.20% to 0.30% (based on the leverage ratio) on the unused portion of the revolving credit facility. On December 31, 2018, the HSN Credit Agreement was terminated and the outstanding balance was repaid. As a result of the termination of the HSN Credit Agreement, the Company recorded a loss on debt extinguishment of $2 million within the consolidated statement of operations. 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 (losses) gains on financial instruments in the accompanying consolidated statements of operations. At December 31, 2018 the fair value of the swap instrument was in a net asset position of approximately $1 million which was included in prepaid expenses and other current assets. At December 31, 2017 the fair value of the swap instrument was in a net asset position of approximately $2 million which was included in other noncurrent assets. As of December 31, 2017, HSN had an outstanding interest rate swap that was in a net asset position of $5 million , which was included in other noncurrent assets, that effectively converted $250 million of its variable rate bank credit facility to a fixed rate of 1.05% with a maturity date in January 2020 (the swapped fixed rate was exclusive of the credit spread under the HSN Credit Agreement). Based on HSN's leverage ratio as of December 31, 2017, the all-in fixed rate was 2.35% . The Company accounted for the interest rate swap at fair value with changes recorded through (losses) gains on financial instruments in the consolidated statements of operations. On December 31, 2018, the interest rate swap was terminated as a result of the termination of the HSN Credit Agreement. Subsequently, QVC entered into a thirteen month interest rate swap arrangement with the same terms. The new swap instrument does not qualify as a cash flow hedge and the fair value of the swap instrument was in a net asset position of approximately $4 million as of December 31, 2018 , which was included in prepaid expenses and other current assets. Other Debt Related Information QVC was in compliance with all of its debt covenants at December 31, 2018 . During the year ended December 31, 2018 , 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 leases) prior to amortization of bond discounts and related debt issuance costs was 4.6% as of December 31, 2018 . At December 31, 2018 and 2017 , outstanding trade letters of credit totaled $13 million and $21 million , respectively. |
Leases and Transponder Service
Leases and Transponder Service Agreements | 12 Months Ended |
Dec. 31, 2018 | |
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 at December 31, 2018 consisted of the following: (in millions) Capital leases Operating leases 2019 $ 29 30 2020 26 22 2021 25 13 2022 24 10 2023 22 8 Thereafter 117 63 Total $ 243 146 QVC distributes its programmings, 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., Italy and neighboring countries. The Company also transmits its programmings 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 or internal resources. 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 sixteen 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 $14 million , $13 million and $12 million for the years ended December 31, 2018, 2017 and 2016, respectively. Total future minimum capital lease payments of $243 million include $55 million of imputed interest. The transponder service agreements for QVC- U.S. and HSN transponders expire between 2019 and 2025 . The service agreements for QVC-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 $34 million , $23 million and $24 million for the years ended December 31, 2018, 2017 and 2016 , 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 was 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 had an option to extend the term of the Lease for up to two consecutive terms of 10 years each. 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. Upon opening the distribution center, the Company evaluated whether the Lease met the criteria for "sale-leaseback" treatment under U.S. GAAP and concluded that it did not and therefore treated the Lease as a financing obligation and lease payments were 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 August 2018, QVC exercised the right to purchase the Premises and related land from the landlord by entering into an amended and restated agreement ("New Lease"). QVC made an initial payment of $10 million and will make annual payments of $12 million over a term of 13 years . The Company classifies the New Lease within capital lease obligations and lease payments are attributed to: (1) a reduction of the principal obligation and (2) imputed interest expense. In connection with the New Lease, QVC capitalized the related land at fair market value while the building asset is currently being depreciated over its estimated useful life of 20 years . On October 5, 2018, QVC entered into a lease (“ECDC Lease”) for an East Coast distribution center as part of the QRG Initiatives. The 1.7 million square foot rental building is located in Bethlehem, Pennsylvania and will be leased to QVC for an initial term of 15 years . QVC expects the ECDC Lease to commence in the third quarter of 2019, at which point the discounted value of the ECDC Lease will be recorded as an asset and a liability in the consolidated balance sheets in accordance with ASU No. 2016-02, which will be adopted by the Company on January 1, 2019. Under the ECDC Lease, QVC will be required to pay an initial base rent of approximately $10 million per year, increasing to approximately $14 million per year, as well as all real estate taxes and other building operating costs. QVC also has the option to extend the term of the ECDC Lease for up to two consecutive terms of 5 years each and one final term of 4 years . |
Revenue (Notes)
Revenue (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenue Disaggregated revenue by segment and product category consisted of the following: Year ended December 31, 2018 (in millions) QVC-U.S. QVC-International HSN Intersegment eliminations Total Home $ 2,265 1,023 910 — 4,198 Beauty 1,040 640 286 — 1,966 Apparel 1,140 453 183 — 1,776 Accessories 772 273 161 — 1,206 Electronics 674 119 455 — 1,248 Jewelry 324 213 149 — 686 Other revenue 134 17 58 (7 ) 202 Total net revenue $ 6,349 2,738 2,202 (7 ) 11,282 Consumer Product Revenue and Other Revenue QVC's revenue includes sales of consumer products in the following categories; home, apparel, beauty, accessories, electronics and jewelry, which are primarily sold through live merchandise-focused televised shopping programs and via our websites and other interactive media. Other revenue consists primarily of income generated from our U.S. PLCC in which a large consumer financial services company provides revolving credit directly to QVC's customers for the sole purpose of purchasing merchandise or services with a PLCC. In return, the Company receives a portion of the net economics of the credit card program. Revenue Recognition For the year ended December 31, 2018 , revenue is recognized when obligations with the Company's customers are satisfied; generally this occurs at the time of shipment to its customers consistent with when control of the shipped product passes. The recognized revenue reflects the consideration the Company expects to receive in exchange for transferring goods, net of allowances for returns. The Company generally recognizes revenue related to the PLCC over time as the PLCC is used by QVC's customers. Sales, value add, use and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company has elected to treat shipping and handling activities that occur after the customer obtains control of the goods as a fulfillment cost and not as a promised good or service. Accordingly, the Company accrues the related shipping costs and recognizes revenue upon delivery of the goods to the shipping carrier. In electing this accounting policy, all shipping and handling activities are treated as fulfillment costs. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts under ASC 606 not to consider the time value of money. Significant Judgments Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. The Company has determined that it is generally the principal in vendor arrangements as the Company can establish control over the goods prior to shipment. Accordingly, the Company records revenue for these arrangements on a gross basis. The total reduction in net revenue due to returns for the years ended December 31, 2018, 2017 and 2016 aggregated to $2,213 million , $1,811 million and $1,815 million , respectively. As a result of the adoption of ASC 606 the Company recognized a separate $116 million asset (included in prepaid expenses and other current assets) related to the expected return of inventory and a $242 million liability (included in accrued liabilities) relating to its sales return reserve at December 31, 2018, instead of the net presentation of the liability that was reported at December 31, 2017 and 2016. A summary of activity in the allowance for sales returns, recorded on a gross basis for the year ended December 31, 2018 and recorded on a net margin basis for the years ending December 31, 2017 and 2016, was as follows: (in millions) Balance Additions- Deductions Transfer of HSN reserve Balance 2018 $ 243 2,213 (2,214 ) — 242 2017 93 982 (979 ) 23 119 2016 103 1,010 (1,020 ) — 93 |
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, 2018 | |
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 Qurate Retail common stock ( “QRTEA”) 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"). On December 31, 2018, Qurate Retail transferred their 100% ownership interest in HSN to QVC through a transaction among entities under common control. As a result of the transaction, QVC has presented the related Options and shares granted to HSN employees and officers in the information below as of December 29, 2017. (a) Stock options CommerceHub, Inc. ("CommerceHub") 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 Qurate Retail 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 a 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 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 Awards 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 QRTEA Options granted to QVC employees and officers as of and during the year ended December 31, 2018 is presented below: Options Weighted Aggregate Weighted average remaining Outstanding at January 1, 2018 14,872,849 $ 24.53 $ 25,290 5.1 Granted 4,016,618 26.77 Transferred from zulily (1) 2,785,968 16.16 Exercised (3,045,271 ) 16.60 Forfeited (3,976,575 ) 27.25 Outstanding at December 31, 2018 14,653,589 24.46 8,353 4.4 Exercisable at December 31, 2018 6,970,577 23.85 6,214 3.4 (1) During year ended December 31, 2018 , 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. Upon employee exercise of the Options, the exercise price is remitted to Qurate Retail in exchange for the shares. The aggregate intrinsic value of all Options exercised during the years ended December 31, 2018, 2017 and 2016 was $20 million , $32 million and $28 million , respectively. The weighted average fair value at date of grant of a QRTEA Option granted during the years ended December 31, 2018, 2017 and 2016 was $8.52 , $7.86 and $7.84 , respectively. During the years ended December 31, 2018, 2017 and 2016 , the fair value of each QRTEA Option was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: 2018 2017 2016 Expected volatility 29.7 % 30.3 % 27.4 % Expected term (years) 5.2 5.9 6.1 Risk free interest rate 2.7 % 2.1 % 1.6 % Expected dividend yield — — — Expected volatility is based on historical and implied volatilities of QRTEA 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 Qurate Retail's stocks and the implied volatility of publicly traded Qurate Retail 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, 2018, 2017 and 2016 , the Company recorded $28 million , $29 million and $21 million , respectively, of stock-based compensation expense related to the Options. As of December 31, 2018 , the total unrecognized compensation cost related to unvested Options was approximately $49 million . Such amount will be recognized in the Company's consolidated statement of operations over a weighted average period of approximately 2.4 years . (b) Restricted stock plan A summary of the activity of the Liberty Incentive Plan with respect to the QRTEA restricted shares granted to QVC employees and officers as of and during the year ended December 31, 2018 is presented below: Restricted shares Weighted average Outstanding at January 1, 2018 2,393,700 $ 24.49 Granted 910,559 26.23 Transferred from zulily (1) 110,550 24.02 Transferred from CBI (2) 1,818 24.42 Vested (1,516,428 ) 24.21 Forfeited (300,906 ) 26.06 Outstanding at December 31, 2018 1,599,293 25.42 (1) During year ended December 31, 2018 , 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. (2) During year ended December 31, 2018 , employees were transferred to QVC from CBI 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, 2018 is presented below: Restricted shares Weighted Outstanding at January 1, 2018 4,061 $ 51.47 Granted — — Vested (3,839 ) 51.54 Forfeited (222 ) 50.52 Outstanding at December 31, 2018 — — During the years ended December 31, 2018, 2017 and 2016 , the Company recorded $18 million , $10 million and $11 million , respectively, of stock-based compensation expense related to these shares. As of December 31, 2018 , the total unrecognized compensation cost related to unvested restricted shares of common stock was approximately $24 million . Such amount will be recognized in the Company's consolidated statement of operations over a weighted average period of approximately 2.3 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 QRTEA restricted shares granted to QVC employees and officers during the years ended December 31, 2018, 2017 and 2016 was $26.23 , $22.49 , and $25.86 , respectively. There have been no LVNTA restricted shares granted to QVC employees and officers during the years ended December 31, 2018, 2017 and 2016 . The aggregate fair value of all restricted shares of common stock that vested during the years ended December 31, 2018, 2017 and 2016 was $37 million , $10 million and $8 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income Taxes Income tax expense (benefit) consisted of the following: Years ended December 31, (in millions) 2018 2017 2016 Current: U.S. federal $ 239 352 326 State and local 37 27 29 Foreign jurisdictions 84 87 73 Total 360 466 428 Deferred: U.S. federal (27 ) (320 ) (31 ) State and local (2 ) (7 ) (8 ) Foreign jurisdictions 3 — (4 ) Total (26 ) (327 ) (43 ) Total income tax expense $ 334 139 385 Pre-tax income (loss) was as follows: Years ended December 31, (in millions) 2018 2017 2016 QVC-U.S. $ 1,033 915 859 QVC-International 200 209 168 HSN 29 (38 ) — Consolidated QVC $ 1,262 1,086 1,027 Total income tax expense differs from the amounts computed by applying the U.S. federal income tax rate of 21% in 2018 and 35% in 2017 and 2016, as a result of the following: Years ended December 31, 2018 2017 2016 Provision at statutory rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.2 % 1.0 % 1.3 % Foreign taxes 0.8 % — % (0.3 )% Foreign earnings repatriation — % — % 0.2 % Valuation allowance 2.6 % 1.0 % 1.0 % Permanent differences (0.2 )% (2.2 )% (0.6 )% Impact of Tax Cuts and Jobs Act — % (26.0 )% — % Investment in subsidiary 0.6 % 4.0 % — % Impact of foreign currency tax regulation (0.6 )% 0.4 % 1 % Other, net 0.1 % (0.4 )% (0.1 )% Total income tax expense 26.5 % 12.8 % 37.5 % 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) 2018 2017 Deferred tax assets: Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts $ 29 28 Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986 33 30 Allowance for sales returns 31 30 Deferred revenue 15 29 Deferred compensation 39 33 Unrecognized federal and state tax benefits 10 11 Net operating loss carryforwards 49 34 Foreign tax credits carryforward 17 — Accrued liabilities 33 30 Other 5 1 Subtotal 261 226 Valuation allowance (64 ) (33 ) Total deferred tax assets 197 193 Deferred tax liabilities: Depreciation and amortization (840 ) (876 ) Cumulative translation of foreign currencies (16 ) (18 ) Investment in subsidiary (41 ) (29 ) Total deferred tax liabilities (897 ) (923 ) Net deferred tax liability $ (700 ) (730 ) In the above table, valuation allowances exist due to the uncertainty of whether or not the benefit of certain U.S. federal and foreign tax credits and 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 $1 million , $9 million and $7 million for the years ended December 31, 2018, 2017 and 2016, respectively. 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 contained a number of provisions which impacted the tax position of the Company in both 2017 and 2018, and will impact the Company’s tax position in future years. Changes which became effective in 2017 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 performed an evaluation of its earnings and profits of its foreign subsidiaries and determined that deficits in some of the subsidiaries offset the surpluses in others so that no amount was subject to the mandatory repatriation provision of the Act in 2017. 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. The Company recorded an income tax benefit of $282 million through operations to reflect the impact of the law changes included in the Act. This non-cash tax benefit was primarily attributed to the remeasurement at the new lower federal tax rate of deferred tax liabilities related to non-current intangible assets. Other provisions of the Act which impact the Company’s tax position and which became effective in 2018 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, the deduction for foreign derived intangible income (“FDII”), and new rules regarding the usage of foreign tax credits in the U.S. Specifically, due to the rules relating to the categorization of income for foreign tax credit purposes, the Company recognized a foreign tax credit carryover in the branch income basket, for which a deferred tax asset and full valuation allowance have been established. The Company is party to a Tax Liability Allocation and Indemnification Agreement (the "Tax Agreement") with Qurate Retail. The Tax Agreement establishes the methodology for the calculation and payment of income taxes in connection with the consolidation of the Company with Qurate Retail for income tax purposes. Generally, the Tax Agreement provides that the Company will pay Qurate Retail 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 Qurate Retail, 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 Qurate Retail’s consolidated tax return. The differences recorded during the years ended December 31, 2018 and 2017, were $2 million and $31 million , respectively, in capital contributions and were related primarily to foreign tax credit carryovers being utilized in Qurate'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 was related primarily to foreign tax credits recognized by QVC and not utilized in Qurate Retail’s tax return during the tax year. The amounts of the tax-related balance due to Qurate Retail at December 31, 2018 and 2017 were $26 million and $52 million , respectively, and are included in accrued liabilities in the consolidated balance sheets. A reconciliation of the 2017 and 2018 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 Impact of transfer of HSN through common control transaction with Qurate Retail 3 Balance at December 31, 2017 53 Increases related to prior year tax positions 1 Decreases related to prior year tax positions (9 ) Decreases related to settlements with taxing authorities — Increases related to current year tax positions 9 Balance at December 31, 2018 $ 54 Included in the balance of unrecognized tax benefits at December 31, 2018 are potential benefits of $43 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 for the years ended December 31, 2018, 2017 or 2016. The Company has tax positions for which the amount of related unrecognized tax benefits could change during 2019 . These consist of nonfederal transfer pricing and other tax issues. The amount of unrecognized tax benefits related to these issues could have an impact of $2 million in 2019 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 Qurate Retail. As of December 31, 2018, the Company's tax years through 2014 are closed for federal income tax purposes, and the IRS has completed its examination of the Company's 2015 and 2016 tax years. The Company's 2017 and 2018 tax years are being examined currently as part of the Qurate Retail 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, 2018, the Company, or one of its subsidiaries was under examination in the states of Pennsylvania and Wisconsin. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions On October 1, 2015, Qurate Retail acquired all of the outstanding shares of zulily. 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, 2018, 2017 and 2016 , QVC and zulily engage in multiple transactions relating to sales, sourcing of merchandise, marketing initiatives, business advisory services and software development. The gross value of these transactions totaled $14 million , $9 million and $12 million for the years ended December 31, 2018, 2017 and 2016 , respectively, 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 . QVC subsequently amended and restated its senior secured credit facility by entering into the Fourth Amended and Restated Credit Agreement, increasing the revolving credit facility to $3.65 billion . See note 8 for more information regarding the revolving credit facility. 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, 2018, there was $135 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, 2018. QVC engages with CommerceHub, which was an approximately 99% owned subsidiary of Qurate Retail prior to the completion of its spin-off from Qurate Retail 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, 2018, 2017 and 2016 , 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, Qurate Retail completed the CommerceHub Spin-Off. As a result, Qurate Retail and CommerceHub are now separate companies. QVC engages with CBI, which is a wholly owned subsidiary of Qurate Retail and prior to the common control transaction between QVC and Qurate Retail, included as part of HSN. CBI is not part of the results of operations or financial position of QVC presented in these consolidated financial statements. During the year ended December 31, 2018, QVC and CBI engaged in multiple transactions relating to sourcing of merchandise, personnel and business advisory services. The gross value of these transactions totaled $68 million for the year ended December 31, 2018. QVC also held a $28 million note receivable from CBI, which is included within other noncurrent assets on the consolidated balance sheet as of December 31, 2018. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 233 233 — — Interest rate swap arrangements (note 8) 5 — 5 — Debt (note 8) 4,758 189 4,569 — 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) 7 — 7 — Long-term liabilities: Debt (note 8) 5,592 — 5,592 — The 2067 Notes (ticker: QVCD) are considered Level 1 fair value instruments as reported in the foregoing tables as they are traded on the New York Stock Exchange, which the Company considers to be an "active market," as defined by U.S. GAAP. The remainder of the Company's Level 2 financial liabilities are debt instruments with quoted market prices that are not considered to be traded on "active markets." Accordingly, these financial instruments are reported in the foregoing tables as Level 2 fair value instruments. During the year ended December 31, 2016, QVC entered into a three-year interest rate swap arrangement with a notional amount of $125 million to mitigate the interest rate risk associated with interest payments related to its variable rate debt. The swap arrangement does not qualify as a cash flow hedge under U.S. GAAP. Accordingly, changes in the fair value of the swap are reflected in (losses) gains on financial instruments in the accompanying consolidated statements of operations. At December 31, 2018 the fair value of the swap instrument was in a net asset position of approximately $1 million which was included in prepaid expenses and other current assets. At December 31, 2017 the fair value of the swap instrument was in a net asset position of approximately $2 million which was included in other noncurrent assets. As of December 31, 2017, HSN had an outstanding interest rate swap that was in a net asset position of $5 million , which was included in other noncurrent assets, that effectively converted $250 million of its variable rate bank credit facility to a fixed rate of 1.05% with a maturity date in January 2020 (the swapped fixed rate was exclusive of the credit spread under the HSN Credit Agreement). Based on HSN's leverage ratio as of December 31, 2017, the all-in fixed rate was 2.35% . The Company accounted for the interest rate swap at fair value with changes recorded through (losses) gains on financial instruments in the consolidated statements of operations. On December 31, 2018, the interest rate swap was terminated as a result of the termination of the HSN Credit Agreement. Subsequently, QVC entered into a thirteen month interest rate swap arrangement with the same terms. The new swap instrument does not qualify as a cash flow hedge and the fair value of the swap instrument was in a net asset position of approximately $4 million as of December 31, 2018 , which was included in prepaid expenses and other current assets. |
Information about QVC's Operati
Information about QVC's Operating Segments | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment reporting disclosure | Information about QVC's Operating Segments and Geographical Data The Company has identified three reportable segments: QVC-U.S., QVC-International and HSN, which are retailers of a wide range of consumer products which are marketed and sold primarily by merchandise-focused televised-shopping programs as well as via the Internet and mobile applications in certain markets. QVC allocates certain corporate costs for management reporting purposes from its QVC-U.S. segment to the QVC-International segment and beginning in the second quarter of 2018, QVC-U.S. began allocating costs to HSN. 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, 2018, 2017 and 2016 , the costs allocated to QVC-International totaled approximately $39 million , $36 million and $31 million respectively. For the year ended December 31, 2018 the costs allocated to HSN totaled approximately $8 million . 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., QVC-International and HSN. 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., QVC-International and HSN 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, which is unaudited, as revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses (excluding transaction related costs and 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 impairment, depreciation, amortization, transaction related costs 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, 2018 2017 2016 (in millions) Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 6,349 1,417 6,140 1,455 6,120 1,435 QVC-International 2,738 429 2,631 451 2,562 405 HSN 2,202 213 — — — — Intersegment eliminations (7 ) — — — — — Consolidated QVC $ 11,282 2,059 8,771 1,906 8,682 1,840 Other information Years ended December 31, 2018 2017 2016 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 90 147 93 330 78 414 QVC-International 56 10 62 34 64 49 HSN 28 80 — — — — Consolidated QVC $ 174 237 155 364 142 463 Years ended December 31, 2018 2017 (in millions) Total Capital Total Capital QVC-U.S. $ 9,785 143 9,429 116 QVC-International 2,154 67 2,121 36 HSN 2,917 18 2,769 — Consolidated QVC $ 14,856 228 14,319 152 Property and equipment, net of accumulated depreciation, by segment were as follows: December 31, (in millions) 2018 2017 QVC-U.S. $ 555 559 QVC-International 454 446 HSN 156 165 Consolidated QVC $ 1,165 1,170 The following table provides a reconciliation of Adjusted OIBDA to income before income taxes: Years ended December 31, (in millions) 2018 2017 2016 Adjusted OIBDA $ 2,059 1,906 1,840 Impairment loss (30 ) — — Transaction related costs (60 ) (39 ) — Stock-based compensation (46 ) (39 ) (32 ) Depreciation and amortization (411 ) (519 ) (605 ) Equity in losses of investee (3 ) (3 ) (6 ) (Losses) gains on financial instruments (2 ) — 2 Interest expense, net (243 ) (214 ) (210 ) Foreign currency (loss) gain — (6 ) 38 Loss on extinguishment of debt (2 ) — — Income before income taxes $ 1,262 1,086 1,027 The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographic area: Years ended December 31, (in millions) 2018 2017 2016 United States $ 8,544 6,140 6,120 Japan 947 934 897 Germany 943 899 865 United Kingdom 679 640 654 Other countries 169 158 146 Consolidated QVC $ 11,282 8,771 8,682 The following table summarizes property and equipment, net of accumulated depreciation, based on physical location: December 31, (in millions) 2018 2017 United States $ 712 724 Germany 161 164 Japan 165 143 United Kingdom 77 84 Other countries 50 55 Consolidated QVC $ 1,165 1,170 |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2018 | |
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, 2016 $ (140 ) (140 ) Other comprehensive loss attributable to QVC, Inc. stockholder (84 ) (84 ) Balance at December 31, 2016 (224 ) (224 ) Other comprehensive loss attributable to QVC, Inc. stockholder 131 131 Balance at December 31, 2017 (93 ) (93 ) Other comprehensive income attributable to QVC, Inc. stockholder (51 ) (51 ) Balance at December 31, 2018 $ (144 ) (144 ) The component of other comprehensive income (loss) 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, 2018: Foreign currency translation adjustments $ (49 ) 1 (48 ) Other comprehensive loss (49 ) 1 (48 ) 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 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent to December 31, 2018 , QVC declared and paid dividends to Qurate Retail in the amount of $304 million . As of February 28, 2019, zulily had $150 million outstanding on the shared tranche within the Fourth Amended and Restated Credit Agreement. |
Guarantor_Non-Guarantor Subsidi
Guarantor/Non-Guarantor Subsidiary Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
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 for the year ended December 31, 2016 and thereafter. In connection with the Fourth Amended and Restated Credit Agreement (refer to Note 8) on December 31, 2018, the following subsidiaries became part of the combined subsidiary guarantors: QVC Duestchland GP, Inc.; HSNi, LLC; HSN Holding LLC; AST Sub, Inc.; Home Shopping Network En Espanol, L.P.; Home Shopping Network En Espanol, L.L.C; H.O.T. Networks Holdings (Delaware) LLC; HSN of Nevada LLC; Ingenious Designs LLC; NLG Merger Corp. and Ventana Television, Inc. The Company has shown all of the subsidiaries of our HSN segment as combined subsidiary guarantors as of December 29, 2017, the date in which HSN became a subsidiary of QVC through a common control transaction with Qurate Retail. 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. 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, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 73 192 278 — 543 Restricted cash 5 — 2 — 7 Accounts receivable, net 1,166 307 314 — 1,787 Inventories 725 310 245 — 1,280 Prepaid expenses and other current assets 95 73 48 — 216 Total current assets 2,064 882 887 — 3,833 Property and equipment, net 281 213 671 — 1,165 Television distribution rights, net — 139 1 — 140 Goodwill 4,190 922 860 — 5,972 Other intangible assets, net 529 3,116 21 — 3,666 Other noncurrent assets 8 20 52 — 80 Investments in subsidiaries 5,523 885 — (6,408 ) — Total assets $ 12,595 6,177 2,492 (6,408 ) 14,856 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 403 1 17 — 421 Accounts payable-trade 494 201 313 — 1,008 Accrued liabilities 358 394 274 — 1,026 Intercompany accounts (receivable) payable (95 ) (1,015 ) 1,110 — — Total current liabilities 1,160 (419 ) 1,714 — 2,455 Long-term portion of debt and capital lease obligations 4,540 6 153 — 4,699 Deferred income taxes 63 695 (58 ) — 700 Other long-term liabilities 122 34 17 — 173 Total liabilities 5,885 316 1,826 — 8,027 Equity: QVC, Inc. stockholder's equity 6,710 5,861 547 (6,408 ) 6,710 Noncontrolling interest — — 119 — 119 Total equity 6,710 5,861 666 (6,408 ) 6,829 Total liabilities and equity $ 12,595 6,177 2,492 (6,408 ) 14,856 Consolidating Balance Sheets December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 55 225 — 282 Restricted cash 5 — 3 — 8 Accounts receivable, net 1,076 292 312 — 1,680 Inventories 758 185 261 — 1,204 Prepaid expenses and other current assets 28 20 23 — 71 Total current assets 1,869 552 824 — 3,245 Property and equipment, net 295 225 650 — 1,170 Television distribution rights, net — 78 — — 78 Goodwill 4,190 904 885 — 5,979 Other intangible assets, net 539 3,213 18 — 3,770 Other noncurrent assets 14 16 47 — 77 Investments in subsidiaries 5,233 1,626 — (6,859 ) — Total assets $ 12,140 6,614 2,424 (6,859 ) 14,319 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 14 — 17 Accounts payable-trade 455 202 301 — 958 Accrued liabilities 366 412 279 — 1,057 Intercompany accounts payable (receivable) 453 (1,513 ) 1,060 — — Total current liabilities 1,277 (899 ) 1,654 — 2,032 Long-term portion of debt and capital lease obligations 5,033 460 140 — 5,633 Deferred income taxes 52 725 (47 ) — 730 Other long-term liabilities 92 11 25 — 128 Total liabilities 6,454 297 1,772 — 8,523 Equity: QVC, Inc. stockholder's equity 5,686 6,317 542 (6,859 ) 5,686 Noncontrolling interest — — 110 — 110 Total equity 5,686 6,317 652 (6,859 ) 5,796 Total liabilities and equity $ 12,140 6,614 2,424 (6,859 ) 14,319 Consolidating Statements of Operations Year ended December 31, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,502 3,185 2,964 (1,369 ) 11,282 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 3,979 1,617 1,832 (180 ) 7,248 Operating 442 533 288 (382 ) 881 Selling, general and administrative, including transaction related costs and stock-based compensation 1,252 282 473 (807 ) 1,200 Depreciation 65 37 72 — 174 Amortization 79 147 11 — 237 Impairment loss — 30 — — 30 5,817 2,646 2,676 (1,369 ) 9,770 Operating income 685 539 288 — 1,512 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Losses on financial instruments (1 ) (1 ) — — (2 ) Interest expense, net (223 ) (15 ) (5 ) — (243 ) Foreign currency gain (loss) 2 — (2 ) — — Loss on extinguishment of debt — (2 ) — — (2 ) Intercompany interest (expense) income (34 ) 151 (117 ) — — (256 ) 133 (127 ) — (250 ) Income before income taxes 429 672 161 — 1,262 Income tax expense (127 ) (121 ) (86 ) — (334 ) Equity in earnings of subsidiaries, net of tax 626 50 — (676 ) — Net income 928 601 75 (676 ) 928 Less net income attributable to the noncontrolling interest (46 ) — (46 ) 46 (46 ) Net income attributable to QVC, Inc. stockholder $ 882 601 29 (630 ) 882 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 transaction related costs and stock-based compensation 1,097 40 428 (821 ) 744 Depreciation 67 7 81 — 155 Amortization 187 142 35 — 364 5,661 611 2,565 (1,375 ) 7,462 Operating income 637 389 283 — 1,309 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 405 487 194 — 1,086 Income tax (expense) benefit (129 ) 93 (103 ) — (139 ) Equity in earnings of subsidiaries, net of tax 671 47 — (718 ) — Net income 947 627 91 (718 ) 947 Less net income attributable to the noncontrolling interest (46 ) — (46 ) 46 (46 ) Net income attributable to QVC, Inc. stockholder $ 901 627 45 (672 ) 901 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 ) Gains 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 Comprehensive Income Year ended December 31, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 928 601 75 (676 ) 928 Foreign currency translation adjustments, net of tax (48 ) — (48 ) 48 (48 ) Total comprehensive income 880 601 27 (628 ) 880 Comprehensive income attributable to noncontrolling interest (49 ) — (49 ) 49 (49 ) Comprehensive income attributable to QVC, Inc. stockholder $ 831 601 (22 ) (579 ) 831 Consolidating Statements of Comprehensive Income Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 947 627 91 (718 ) 947 Foreign currency translation adjustments, net of tax 135 — 135 (135 ) 135 Total comprehensive income 1,082 627 226 (853 ) 1,082 Comprehensive income attributable to noncontrolling interest (50 ) — (50 ) 50 (50 ) Comprehensive income attributable to QVC, Inc. stockholder $ 1,032 627 176 (803 ) 1,032 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 Cash Flows Year ended December 31, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 461 592 103 — 1,156 Investing activities: Capital expenditures (121 ) (19 ) (88 ) — (228 ) Expenditures for television distribution rights — (139 ) (1 ) — (140 ) Changes in other noncurrent assets 1 (4 ) (13 ) — (16 ) Other investing activities — (29 ) — — (29 ) Intercompany investing activities 433 (688 ) — 255 — Net cash provided by (used in) investing activities 313 (879 ) (102 ) 255 (413 ) Financing activities: Principal payments of debt and capital lease obligations (2,680 ) (851 ) (10 ) — (3,541 ) Principal borrowings of debt from senior secured credit facility 2,362 388 — — 2,750 Proceeds from issuance of senior secured notes 225 — — — 225 Payment of debt origination fees (14 ) — — — (14 ) Capital contributions received from Qurate Retail, Inc. 340 180 — — 520 Dividends paid to Qurate Retail Inc. (367 ) — — — (367 ) Dividends paid to noncontrolling interest — — (40 ) — (40 ) Other financing activities (10 ) (8 ) — — (18 ) Net short-term intercompany debt (repayments) borrowings (548 ) 498 50 — — Other intercompany financing activities (11 ) 217 49 (255 ) — Net cash (used in) provided by financing activities (703 ) 424 49 (255 ) (485 ) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — — 2 — 2 Net increase in cash, cash equivalents and restricted cash 71 137 52 — 260 Cash, cash equivalents and restricted cash, beginning of period 7 55 228 — 290 Cash, cash equivalents and restricted cash, end of period $ 78 192 280 — 550 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 ) Changes in other noncurrent assets (1 ) — — — (1 ) Intercompany investing activities 545 (1,507 ) — 962 — Common control transaction with Qurate Retail, Inc., net of cash received — 22 — — 22 Net cash provided by (used in) investing activities 441 (1,539 ) (45 ) 962 (181 ) 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 Qurate Retail, Inc. (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, cash equivalents and restricted cash — — 13 — 13 Net (decrease) increase in cash, cash equivalents and restricted cash (3 ) (42 ) 41 — (4 ) Cash, cash equivalents and restricted cash, beginning of period 10 97 187 — 294 Cash, cash equivalents and restricted cash, end of period $ 7 55 228 — 290 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 ) 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 297 91 (26 ) (583 ) (221 ) 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 Qurate Retail, Inc. (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, cash equivalents and restricted cash — — (20 ) — (20 ) Net increase (decrease) in cash, cash equivalents and restricted cash 1 (15 ) (30 ) — (44 ) Cash, cash equivalents and restricted cash, beginning of period 9 112 217 — 338 Cash, cash equivalents and restricted cash, end of period $ 10 97 187 — 294 |
Employee Benefit Plans (Notes)
Employee Benefit Plans (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
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 $22 million , $18 million and $23 million for the years ended December 31, 2018, 2017 and 2016 , respectively. |
Quarterly Financial Information
Quarterly Financial Information (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Quarterly Financial Information (Unaudited) Year ended December 31, 2018 (in millions) 1st Quarter (a) 2nd Quarter (a) 3rd Quarter (a) 4th Quarter Net revenue $ 2,602 2,556 2,569 3,555 Operating income $ 356 390 305 461 Net income $ 212 244 181 291 Net income attributable to QVC, Inc. stockholder $ 201 233 170 278 Year ended December 31, 2017 (in millions) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter (a) Net revenue $ 1,965 1,979 2,010 2,817 Operating income $ 271 306 274 458 Net income $ 135 151 166 495 Net income attributable to QVC, Inc. stockholder $ 124 141 154 482 (a) The 4th quarter of the year ended December 31, 2017 and the 1st, 2nd and 3rd quarters of the year ended December 31, 2018, have been retrospectively adjusted as a result of the common control transaction with Qurate Retail on December 31, 2018, in order to combine the financial results of the Company and HSN (see note 1). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 $233 million and $42 million at December 31, 2018 and 2017 , 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, 2018 and 2017 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, 2018 and 2017 were as follows: (in millions) QVC-U.S. QVC-International HSN Total Balance as of December 31, 2016 $ 4,190 805 — 4,995 Common control transaction (1) — — 904 904 Exchange rate fluctuations — 80 — 80 Balance as of December 31, 2017 4,190 885 904 5,979 Purchase accounting adjustments (2) — — 18 18 Exchange rate fluctuations — (25 ) — (25 ) Balance as of December 31, 2018 $ 4,190 860 922 5,972 (1) As of December 31, 2018, QVC completed a common control transaction with Qurate Retail and subsequently recorded $904 million of goodwill related to HSN on December 29, 2017 as a result of the transaction. (2) Adjustment to HSN goodwill is due an increase in in the preliminary purchase price allocation by Qurate Retail during the year ended December 31, 2018. 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 reporting unit over the fair value is recorded as an impairment charge. For the year ended December 31, 2018 , QVC only performed a qualitative assessment for its QVC-U.S. and QVC-International reporting segments as it was more likely than not that the carrying values exceeded the fair values for each of the reporting units and performed a quantitative assessment for its HSN segment. There was no goodwill impairment recorded during the years ended December 31, 2018. 2017 or 2016. QVC utilizes a quantitative assessment to determine 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. The Company recorded a $30 million impairment loss related to an indefinite-lived intangible asset during the year ended December 31, 2018. There were no impairment losses record during the years ended December 31, 2017 or 2016. |
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 For the year ended December 31, 2018, the Company recognizes revenue at the time of shipment to customers. As a result of the adoption of ASC 606 (defined below), the revenue for shipments in transit is no longer recorded as deferred revenue. For the years ended December 31, 2017 and 2016, the revenue for shipments in-transit was recorded as deferred revenue. Refer to the Adoption of New Accounting Pronouncements section below for further explanation. The Company's general policy is to allow customers the right to return merchandise. An allowance for returned merchandise is provided at the time revenue is recorded as a percentage of sales based on historical experience. Revenue Recognition For the year ended December 31, 2018 , revenue is recognized when obligations with the Company's customers are satisfied; generally this occurs at the time of shipment to its customers consistent with when control of the shipped product passes. The recognized revenue reflects the consideration the Company expects to receive in exchange for transferring goods, net of allowances for returns. The Company generally recognizes revenue related to the PLCC over time as the PLCC is used by QVC's customers. Sales, value add, use and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company has elected to treat shipping and handling activities that occur after the customer obtains control of the goods as a fulfillment cost and not as a promised good or service. Accordingly, the Company accrues the related shipping costs and recognizes revenue upon delivery of the goods to the shipping carrier. In electing this accounting policy, all shipping and handling activities are treated as fulfillment costs. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts under ASC 606 not to consider the time value of money. Significant Judgments Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. The Company has determined that it is generally the principal in vendor arrangements as the Company can establish control over the goods prior to shipment. Accordingly, the Company records revenue for these arrangements on a gross basis. The total reduction in net revenue due to returns for the years ended December 31, 2018, 2017 and 2016 aggregated to $2,213 million , $1,811 million and $1,815 million , respectively. As a result of the adoption of ASC 606 the Company recognized a separate $116 million asset (included in prepaid expenses and other current assets) related to the expected return of inventory and a $242 million liability (included in accrued liabilities) relating to its sales return reserve at December 31, 2018, instead of the net presentation of the liability that was reported at December 31, 2017 and 2016. A summary of activity in the allowance for sales returns, recorded on a gross basis for the year ended December 31, 2018 and recorded on a net margin basis for the years ending December 31, 2017 and 2016, was as follows: (in millions) Balance Additions- Deductions Transfer of HSN reserve Balance 2018 $ 243 2,213 (2,214 ) — 242 2017 93 982 (979 ) 23 119 2016 103 1,010 (1,020 ) — 93 |
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 $138 million , $86 million and $84 million for the years ended December 31, 2018, 2017 and 2016 , 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 11, the Company and Qurate Retail 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 | (t) 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 $38 million classified within other noncurrent assets on the consolidated balance sheet. |
Use of estimates policy | (u) 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 Adoption of new accounting pronouncements On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU No. 2016-08, 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. On January 1, 2018, the Company adopted the new accounting standard Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, and all related amendments ("ASC 606") to all contracts using the modified retrospective method. The Company recognized the cumulative effect of initially applying the new revenue standard as a $14 million adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company does not expect the adoption of the new revenue standard to have a material impact to its net income on an ongoing basis. Refer to the table below for the adoption of this guidance. 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 adopted this guidance on January 1, 2018 and there was no significant effect of the standard on its consolidated financial statements. The cumulative effect of the changes to accumulated deficit due to the adoption of ASC 606 and ASU No. 2016-16 were as follows: (in millions) Balance at December 31, 2017 Adjustments Due to ASC 606 Adjustments Due to ASU 2016-16 Balance at January 1, 2018 Assets: Inventories $ 1,204 (22 ) — 1,182 Prepaid expenses and other current assets 71 — (1 ) 70 Liabilities: Accrued liabilities 1,057 (36 ) — 1,021 Equity: Accumulated deficit $ (2,797 ) 14 (1 ) (2,784 ) In accordance with the new revenue standard requirements, the impact of adoption on our condensed consolidated statements of operations was as follows: Statements of Operations Year ended December 31, 2018 (in millions) As Reported Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Net revenue $ 11,282 11,143 139 Costs and expenses: Cost of goods sold (exclusive of depreciation and amortization) 7,248 7,238 10 Operating 881 879 2 Selling, general and administrative, including transaction related costs and stock-based compensation 1,200 1,082 118 Income tax expense 334 332 2 Net income $ 928 921 7 The effect of changes of adoption is primarily due to the timing of revenue recognition at QVC-Global and the classification of income for the Company's Private Label Credit Card ("PLCC") income. For the year ended December 31, 2018, revenue is recognized at the time of shipment to the Company's customers consistent with when control passes and PLCC income is recognized in net revenue. For the year ended December 31, 2017, revenue at QVC-Global was recognized at the time of delivery to the customers and deferred revenue was recorded to account for the shipments in-transit. In addition, PLCC income was recognized as an offset to selling, general and administrative expenses. The Company also recognized a separate $116 million asset (included in prepaid expenses and other current assets) related to the expected return of inventory and a $242 million liability (included in accrued liabilities) relating to its sales return reserve at December 31, 2018, instead of the net presentation of the liability in the amount of $119 million that was reported at December 31, 2017. 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 adopted this guidance during the first quarter of 2018 and there was no significant effect of the standard on its financial reporting. 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 adopted this guidance during the first quarter of 2018 and there was no significant effect of the standard 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 adopted this guidance during the first quarter of 2018 and has reclassified prior period balances in cash and cash equivalents within the consolidated statements of cash flows in order to conform with current period presentation. 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 adopted this guidance during the first quarter of 2018 and there was no significant effect of the standard on its consolidated financial statements. Accounting pronouncements issued but not yet adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which revises the accounting related to lessee accounting. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which provided further clarification on the standard. 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 Company will adopt the amendments in this ASU on January 1, 2019 utilizing the modified retrospective transition approach and will not restate comparative periods. The Company plans to elect the package of practical expedients permitted under the transition guidance, which allows it to carryforward its historical lease classification, its determination regarding whether a contract contains a lease and any initial indirect costs that had existed prior to the adoption of this new standard. The Company also plans to elect to combine both lease and non-lease components and to elect to expense all short leases with a term of less than 12 months and not record a related right-of use asset and operating lease liability on the consolidated balance sheet. The Company expects that the discounted amount of 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. While the Company is still evaluating the impact on its disclosures, it does not expect the adoption of the new standard to have a material impact on the remaining consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), which addresses the effect of the change in the U.S. federal corporate tax rate due to the enactment of the December 22, 2017 Tax Cuts and Jobs Act (the "Tax Act") on items within accumulated other comprehensive income (loss). The guidance will be effective for the Company in the first quarter of 2019 with early adoption permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40) , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance will be effective for the Company in the first quarter of 2020 with early adoption permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. |
Revenue (Policies)
Revenue (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue [Abstract] | |
Revenue recognition policy | (j) Revenue recognition For the year ended December 31, 2018, the Company recognizes revenue at the time of shipment to customers. As a result of the adoption of ASC 606 (defined below), the revenue for shipments in transit is no longer recorded as deferred revenue. For the years ended December 31, 2017 and 2016, the revenue for shipments in-transit was recorded as deferred revenue. Refer to the Adoption of New Accounting Pronouncements section below for further explanation. The Company's general policy is to allow customers the right to return merchandise. An allowance for returned merchandise is provided at the time revenue is recorded as a percentage of sales based on historical experience. Revenue Recognition For the year ended December 31, 2018 , revenue is recognized when obligations with the Company's customers are satisfied; generally this occurs at the time of shipment to its customers consistent with when control of the shipped product passes. The recognized revenue reflects the consideration the Company expects to receive in exchange for transferring goods, net of allowances for returns. The Company generally recognizes revenue related to the PLCC over time as the PLCC is used by QVC's customers. Sales, value add, use and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company has elected to treat shipping and handling activities that occur after the customer obtains control of the goods as a fulfillment cost and not as a promised good or service. Accordingly, the Company accrues the related shipping costs and recognizes revenue upon delivery of the goods to the shipping carrier. In electing this accounting policy, all shipping and handling activities are treated as fulfillment costs. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts under ASC 606 not to consider the time value of money. Significant Judgments Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. The Company has determined that it is generally the principal in vendor arrangements as the Company can establish control over the goods prior to shipment. Accordingly, the Company records revenue for these arrangements on a gross basis. The total reduction in net revenue due to returns for the years ended December 31, 2018, 2017 and 2016 aggregated to $2,213 million , $1,811 million and $1,815 million , respectively. As a result of the adoption of ASC 606 the Company recognized a separate $116 million asset (included in prepaid expenses and other current assets) related to the expected return of inventory and a $242 million liability (included in accrued liabilities) relating to its sales return reserve at December 31, 2018, instead of the net presentation of the liability that was reported at December 31, 2017 and 2016. A summary of activity in the allowance for sales returns, recorded on a gross basis for the year ended December 31, 2018 and recorded on a net margin basis for the years ending December 31, 2017 and 2016, was as follows: (in millions) Balance Additions- Deductions Transfer of HSN reserve Balance 2018 $ 243 2,213 (2,214 ) — 242 2017 93 982 (979 ) 23 119 2016 103 1,010 (1,020 ) — 93 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows: (in millions) QVC-U.S. QVC-International HSN Total Balance as of December 31, 2016 $ 4,190 805 — 4,995 Common control transaction (1) — — 904 904 Exchange rate fluctuations — 80 — 80 Balance as of December 31, 2017 4,190 885 904 5,979 Purchase accounting adjustments (2) — — 18 18 Exchange rate fluctuations — (25 ) — (25 ) Balance as of December 31, 2018 $ 4,190 860 922 5,972 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Common control transaction (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | As a result of the common control transaction with Qurate Retail (see note 1), QVC received the following assets and liabilities as of December 29, 2017 through a capital contribution, which reflected the initial purchase price allocation for HSN by Qurate Retail (in millions): Cash and cash equivalents $ 22 Accounts receivable 292 Inventory 185 Property and equipment 165 Goodwill 904 Other intangible assets 1,165 Other assets 37 Accounts payable-trade and accrued liabilities (366 ) Long-term portion of debt (460 ) Deferred income taxes (263 ) Other long-term liabilities (10 ) Capital contribution from Qurate Retail, Inc. $ 1,671 |
Business Acquisition, Pro Forma Information [Table Text Block] | The unaudited pro forma net revenue and income before income taxes of QVC, prepared utilizing the historical financial statements of HSN, giving effect to purchase accounting related adjustments made at the time of acquisition, as if the transaction discussed above occurred on January 1, 2016, are as follows: Years Ended December 31, (in millions) (unaudited) 2017 2016 Net revenue $ 11,114 11,161 Income before income taxes 1,163 1,222 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The cumulative effect of the changes to accumulated deficit due to the adoption of ASC 606 and ASU No. 2016-16 were as follows: (in millions) Balance at December 31, 2017 Adjustments Due to ASC 606 Adjustments Due to ASU 2016-16 Balance at January 1, 2018 Assets: Inventories $ 1,204 (22 ) — 1,182 Prepaid expenses and other current assets 71 — (1 ) 70 Liabilities: Accrued liabilities 1,057 (36 ) — 1,021 Equity: Accumulated deficit $ (2,797 ) 14 (1 ) (2,784 ) In accordance with the new revenue standard requirements, the impact of adoption on our condensed consolidated statements of operations was as follows: Statements of Operations Year ended December 31, 2018 (in millions) As Reported Balances Without Adoption of ASC 606 Effect of Change Increase/(Decrease) Net revenue $ 11,282 11,143 139 Costs and expenses: Cost of goods sold (exclusive of depreciation and amortization) 7,248 7,238 10 Operating 881 879 2 Selling, general and administrative, including transaction related costs and stock-based compensation 1,200 1,082 118 Income tax expense 334 332 2 Net income $ 928 921 7 |
Summary of activity in allowance for sales returns | A summary of activity in the allowance for sales returns, recorded on a gross basis for the year ended December 31, 2018 and recorded on a net margin basis for the years ending December 31, 2017 and 2016, was as follows: (in millions) Balance Additions- Deductions Transfer of HSN reserve Balance 2018 $ 243 2,213 (2,214 ) — 242 2017 93 982 (979 ) 23 119 2016 103 1,010 (1,020 ) — 93 |
Accounts Receivable Accounts _2
Accounts Receivable Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | Accounts receivable consisted of the following: December 31, (in millions) 2018 2017 Installment sales plan $ 1,533 1,396 Major credit cards and customers 269 295 Other receivables 97 80 1,899 1,771 Less allowance for doubtful accounts (112 ) (91 ) Accounts receivable, net $ 1,787 1,680 |
Summary of activity in the allowance for doubtful accounts | A summary of activity in the allowance for doubtful accounts was as follows: (in millions) Balance Additions- Deductions- Balance 2018 $ 91 112 (91 ) 112 2017 97 72 (78 ) 91 2016 86 107 (96 ) 97 |
Property and Equipment, Net P_2
Property and Equipment, Net Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule Property, Plant and Equipment, net | Property and equipment consisted of the following: December 31, Estimated (in millions) 2018 2017 life Land $ 128 108 N/A Buildings and improvements 1,174 1,166 8 - 20 years Furniture and other equipment 543 546 2 -10 years Broadcast equipment 179 138 2 - 6 years Computer equipment 186 174 2 - 5 years Transponders and terrestrial transmitter (note 9) 178 170 8 - 15 years Projects in progress 58 42 N/A 2,446 2,344 Less: accumulated depreciation (1,281 ) (1,174 ) Property and equipment, net $ 1,165 1,170 |
Television Distribution Right_2
Television Distribution Rights, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Television Distribution Rights [Abstract] | |
Schedule of television distribution rights | Television distribution rights consisted of the following: December 31, (in millions) 2018 2017 Television distribution rights $ 723 730 Less accumulated amortization (583 ) (652 ) Television distribution rights, net $ 140 78 Television Distribution Rights, Net Television distribution rights consisted of the following: December 31, (in millions) 2018 2017 Television distribution rights $ 723 730 Less accumulated amortization (583 ) (652 ) Television distribution rights, net $ 140 78 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 2.2 years at December 31, 2018 . Amortization expense for television distribution rights was $77 million , $157 million and $193 million for the years ended December 31, 2018, 2017 and 2016 , respectively. The decrease in amortization expense is primarily due to the end of affiliation agreement terms for contracts in place at the time of Qurate Retail's acquisition of QVC in 2003. As of December 31, 2018 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): 2019 $ 74 2020 55 2021 9 2022 2 2023 — 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 $363 million for the year ended December 31, 2018 and $298 million for each of the years ended December 31, 2017 and 2016 , which is included as part of operating expenses in the consolidated statements of operations. |
Schedule of expected amortization expense | As of December 31, 2018 , related amortization expense for each of the next five years ended December 31 was as follows (in millions): 2019 $ 74 2020 55 2021 9 2022 2 2023 — |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Intangible Assets [Abstract] | |
Schedule of acquired intangible assets by class | Other intangible assets consisted of the following: December 31, 2018 2017 Weighted average remaining life (years) (in millions) Gross Accumulated Other intangible assets, net Gross Accumulated Other intangible assets, net Purchased and internally developed software $ 890 (640 ) 250 822 (548 ) 274 4.0 Affiliate and customer relationships 2,831 (2,450 ) 381 2,845 (2,409 ) 436 7.9 Debt origination fees 10 — 10 8 (3 ) 5 5.0 Trademarks (indefinite life) 3,025 — 3,025 3,055 — 3,055 N/A $ 6,756 (3,090 ) 3,666 6,730 (2,960 ) 3,770 6.3 |
Schedule of finite-lived intangible assets future amortization expense | As of December 31, 2018 , the related amortization and interest expense for each of the next five years ended December 31 was as follows (in millions): 2019 $ 148 2020 117 2021 93 2022 64 2023 64 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following: December 31, (in millions) 2018 2017 Accounts payable non-trade $ 314 324 Allowance for sales returns 242 119 Accrued compensation and benefits 146 195 Sales and other taxes 101 82 Accrued interest 58 58 Accrued cable distribution fees 39 63 Income taxes 37 77 Deferred revenue 24 70 Other 65 69 $ 1,026 1,057 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt and capital lease obligations consisted of the following: December 31, (in millions) 2018 2017 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 6.375% Senior Secured Notes due 2067 225 — Senior secured credit facilities 1,185 1,956 Capital lease obligations 188 68 Build to suit lease obligation — 101 Less debt issuance costs, net (25 ) (22 ) Total debt and capital lease obligations 5,120 5,650 Less current portion (421 ) (17 ) Long-term portion of debt and capital lease obligations $ 4,699 5,633 |
Leases and Transponder Servic_2
Leases and Transponder Service Agreements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 at December 31, 2018 consisted of the following: (in millions) Capital leases Operating leases 2019 $ 29 30 2020 26 22 2021 25 13 2022 24 10 2023 22 8 Thereafter 117 63 Total $ 243 146 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | Disaggregated revenue by segment and product category consisted of the following: Year ended December 31, 2018 (in millions) QVC-U.S. QVC-International HSN Intersegment eliminations Total Home $ 2,265 1,023 910 — 4,198 Beauty 1,040 640 286 — 1,966 Apparel 1,140 453 183 — 1,776 Accessories 772 273 161 — 1,206 Electronics 674 119 455 — 1,248 Jewelry 324 213 149 — 686 Other revenue 134 17 58 (7 ) 202 Total net revenue $ 6,349 2,738 2,202 (7 ) 11,282 |
Revenue Valuation Allowance and
Revenue Valuation Allowance and Reserves (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Allowance for Sales Returns [Abstract] | |
Summary of activity in allowance for sales returns | A summary of activity in the allowance for sales returns, recorded on a gross basis for the year ended December 31, 2018 and recorded on a net margin basis for the years ending December 31, 2017 and 2016, was as follows: (in millions) Balance Additions- Deductions Transfer of HSN reserve Balance 2018 $ 243 2,213 (2,214 ) — 242 2017 93 982 (979 ) 23 119 2016 103 1,010 (1,020 ) — 93 |
Stock Options and Other Share_2
Stock Options and Other Share-Based Awards Stock Options and Other Share- Based Awards (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 QRTEA Options granted to QVC employees and officers as of and during the year ended December 31, 2018 is presented below: Options Weighted Aggregate Weighted average remaining Outstanding at January 1, 2018 14,872,849 $ 24.53 $ 25,290 5.1 Granted 4,016,618 26.77 Transferred from zulily (1) 2,785,968 16.16 Exercised (3,045,271 ) 16.60 Forfeited (3,976,575 ) 27.25 Outstanding at December 31, 2018 14,653,589 24.46 8,353 4.4 Exercisable at December 31, 2018 6,970,577 23.85 6,214 3.4 (1) During year ended December 31, 2018 , 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. |
Schedule of stock options valuation assumptions | During the years ended December 31, 2018, 2017 and 2016 , the fair value of each QRTEA Option was determined as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: 2018 2017 2016 Expected volatility 29.7 % 30.3 % 27.4 % Expected term (years) 5.2 5.9 6.1 Risk free interest rate 2.7 % 2.1 % 1.6 % Expected dividend yield — — — |
Schedule of restricted stock activity | A summary of the activity of the Liberty Incentive Plan with respect to the QRTEA restricted shares granted to QVC employees and officers as of and during the year ended December 31, 2018 is presented below: Restricted shares Weighted average Outstanding at January 1, 2018 2,393,700 $ 24.49 Granted 910,559 26.23 Transferred from zulily (1) 110,550 24.02 Transferred from CBI (2) 1,818 24.42 Vested (1,516,428 ) 24.21 Forfeited (300,906 ) 26.06 Outstanding at December 31, 2018 1,599,293 25.42 (1) During year ended December 31, 2018 , 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. (2) During year ended December 31, 2018 , employees were transferred to QVC from CBI 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, 2018 is presented below: Restricted shares Weighted Outstanding at January 1, 2018 4,061 $ 51.47 Granted — — Vested (3,839 ) 51.54 Forfeited (222 ) 50.52 Outstanding at December 31, 2018 — — |
Income Taxes Income Tax (Tables
Income Taxes Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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) 2018 2017 2016 Current: U.S. federal $ 239 352 326 State and local 37 27 29 Foreign jurisdictions 84 87 73 Total 360 466 428 Deferred: U.S. federal (27 ) (320 ) (31 ) State and local (2 ) (7 ) (8 ) Foreign jurisdictions 3 — (4 ) Total (26 ) (327 ) (43 ) Total income tax expense $ 334 139 385 |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Pre-tax income (loss) was as follows: Years ended December 31, (in millions) 2018 2017 2016 QVC-U.S. $ 1,033 915 859 QVC-International 200 209 168 HSN 29 (38 ) — Consolidated QVC $ 1,262 1,086 1,027 |
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 21% in 2018 and 35% in 2017 and 2016, as a result of the following: Years ended December 31, 2018 2017 2016 Provision at statutory rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.2 % 1.0 % 1.3 % Foreign taxes 0.8 % — % (0.3 )% Foreign earnings repatriation — % — % 0.2 % Valuation allowance 2.6 % 1.0 % 1.0 % Permanent differences (0.2 )% (2.2 )% (0.6 )% Impact of Tax Cuts and Jobs Act — % (26.0 )% — % Investment in subsidiary 0.6 % 4.0 % — % Impact of foreign currency tax regulation (0.6 )% 0.4 % 1 % Other, net 0.1 % (0.4 )% (0.1 )% Total income tax expense 26.5 % 12.8 % 37.5 % |
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) 2018 2017 Deferred tax assets: Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts $ 29 28 Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986 33 30 Allowance for sales returns 31 30 Deferred revenue 15 29 Deferred compensation 39 33 Unrecognized federal and state tax benefits 10 11 Net operating loss carryforwards 49 34 Foreign tax credits carryforward 17 — Accrued liabilities 33 30 Other 5 1 Subtotal 261 226 Valuation allowance (64 ) (33 ) Total deferred tax assets 197 193 Deferred tax liabilities: Depreciation and amortization (840 ) (876 ) Cumulative translation of foreign currencies (16 ) (18 ) Investment in subsidiary (41 ) (29 ) Total deferred tax liabilities (897 ) (923 ) Net deferred tax liability $ (700 ) (730 ) |
Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block] | A reconciliation of the 2017 and 2018 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 Impact of transfer of HSN through common control transaction with Qurate Retail 3 Balance at December 31, 2017 53 Increases related to prior year tax positions 1 Decreases related to prior year tax positions (9 ) Decreases related to settlements with taxing authorities — Increases related to current year tax positions 9 Balance at December 31, 2018 $ 54 |
Assets and Liabilities Measur_2
Assets and Liabilities Measured at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 using (in millions) Total Quoted prices Significant Significant Current assets: Cash equivalents $ 233 233 — — Interest rate swap arrangements (note 8) 5 — 5 — Debt (note 8) 4,758 189 4,569 — 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) 7 — 7 — Long-term liabilities: Debt (note 8) 5,592 — 5,592 — |
Information about QVC's Opera_2
Information about QVC's Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Adjusted OIBDA by Segment | Years ended December 31, 2018 2017 2016 (in millions) Net Adjusted Net Adjusted Net Adjusted QVC-U.S. $ 6,349 1,417 6,140 1,455 6,120 1,435 QVC-International 2,738 429 2,631 451 2,562 405 HSN 2,202 213 — — — — Intersegment eliminations (7 ) — — — — — Consolidated QVC $ 11,282 2,059 8,771 1,906 8,682 1,840 |
Schedule of Depreciation and Amortization by Segment | Years ended December 31, 2018 2017 2016 (in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization QVC-U.S. $ 90 147 93 330 78 414 QVC-International 56 10 62 34 64 49 HSN 28 80 — — — — Consolidated QVC $ 174 237 155 364 142 463 |
Schedule of Capital Expenditures and Total Assets by Segment | Years ended December 31, 2018 2017 (in millions) Total Capital Total Capital QVC-U.S. $ 9,785 143 9,429 116 QVC-International 2,154 67 2,121 36 HSN 2,917 18 2,769 — Consolidated QVC $ 14,856 228 14,319 152 |
Property and equipment, net by Segment | Property and equipment, net of accumulated depreciation, by segment were as follows: December 31, (in millions) 2018 2017 QVC-U.S. $ 555 559 QVC-International 454 446 HSN 156 165 Consolidated QVC $ 1,165 1,170 |
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) 2018 2017 2016 Adjusted OIBDA $ 2,059 1,906 1,840 Impairment loss (30 ) — — Transaction related costs (60 ) (39 ) — Stock-based compensation (46 ) (39 ) (32 ) Depreciation and amortization (411 ) (519 ) (605 ) Equity in losses of investee (3 ) (3 ) (6 ) (Losses) gains on financial instruments (2 ) — 2 Interest expense, net (243 ) (214 ) (210 ) Foreign currency (loss) gain — (6 ) 38 Loss on extinguishment of debt (2 ) — — Income before income taxes $ 1,262 1,086 1,027 |
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) 2018 2017 2016 United States $ 8,544 6,140 6,120 Japan 947 934 897 Germany 943 899 865 United Kingdom 679 640 654 Other countries 169 158 146 Consolidated QVC $ 11,282 8,771 8,682 |
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) 2018 2017 United States $ 712 724 Germany 161 164 Japan 165 143 United Kingdom 77 84 Other countries 50 55 Consolidated QVC $ 1,165 1,170 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2016 $ (140 ) (140 ) Other comprehensive loss attributable to QVC, Inc. stockholder (84 ) (84 ) Balance at December 31, 2016 (224 ) (224 ) Other comprehensive loss attributable to QVC, Inc. stockholder 131 131 Balance at December 31, 2017 (93 ) (93 ) Other comprehensive income attributable to QVC, Inc. stockholder (51 ) (51 ) Balance at December 31, 2018 $ (144 ) (144 ) |
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, 2018: Foreign currency translation adjustments $ (49 ) 1 (48 ) Other comprehensive loss (49 ) 1 (48 ) 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 ) |
Guarantor_Non-Guarantor Subsi_2
Guarantor/Non-Guarantor Subsidiary Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Current Period | Consolidating Balance Sheets December 31, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 73 192 278 — 543 Restricted cash 5 — 2 — 7 Accounts receivable, net 1,166 307 314 — 1,787 Inventories 725 310 245 — 1,280 Prepaid expenses and other current assets 95 73 48 — 216 Total current assets 2,064 882 887 — 3,833 Property and equipment, net 281 213 671 — 1,165 Television distribution rights, net — 139 1 — 140 Goodwill 4,190 922 860 — 5,972 Other intangible assets, net 529 3,116 21 — 3,666 Other noncurrent assets 8 20 52 — 80 Investments in subsidiaries 5,523 885 — (6,408 ) — Total assets $ 12,595 6,177 2,492 (6,408 ) 14,856 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 403 1 17 — 421 Accounts payable-trade 494 201 313 — 1,008 Accrued liabilities 358 394 274 — 1,026 Intercompany accounts (receivable) payable (95 ) (1,015 ) 1,110 — — Total current liabilities 1,160 (419 ) 1,714 — 2,455 Long-term portion of debt and capital lease obligations 4,540 6 153 — 4,699 Deferred income taxes 63 695 (58 ) — 700 Other long-term liabilities 122 34 17 — 173 Total liabilities 5,885 316 1,826 — 8,027 Equity: QVC, Inc. stockholder's equity 6,710 5,861 547 (6,408 ) 6,710 Noncontrolling interest — — 119 — 119 Total equity 6,710 5,861 666 (6,408 ) 6,829 Total liabilities and equity $ 12,595 6,177 2,492 (6,408 ) 14,856 |
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Prior Period | Consolidating Balance Sheets December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Assets Current assets: Cash and cash equivalents $ 2 55 225 — 282 Restricted cash 5 — 3 — 8 Accounts receivable, net 1,076 292 312 — 1,680 Inventories 758 185 261 — 1,204 Prepaid expenses and other current assets 28 20 23 — 71 Total current assets 1,869 552 824 — 3,245 Property and equipment, net 295 225 650 — 1,170 Television distribution rights, net — 78 — — 78 Goodwill 4,190 904 885 — 5,979 Other intangible assets, net 539 3,213 18 — 3,770 Other noncurrent assets 14 16 47 — 77 Investments in subsidiaries 5,233 1,626 — (6,859 ) — Total assets $ 12,140 6,614 2,424 (6,859 ) 14,319 Liabilities and equity Current liabilities: Current portion of debt and capital lease obligations $ 3 — 14 — 17 Accounts payable-trade 455 202 301 — 958 Accrued liabilities 366 412 279 — 1,057 Intercompany accounts payable (receivable) 453 (1,513 ) 1,060 — — Total current liabilities 1,277 (899 ) 1,654 — 2,032 Long-term portion of debt and capital lease obligations 5,033 460 140 — 5,633 Deferred income taxes 52 725 (47 ) — 730 Other long-term liabilities 92 11 25 — 128 Total liabilities 6,454 297 1,772 — 8,523 Equity: QVC, Inc. stockholder's equity 5,686 6,317 542 (6,859 ) 5,686 Noncontrolling interest — — 110 — 110 Total equity 5,686 6,317 652 (6,859 ) 5,796 Total liabilities and equity $ 12,140 6,614 2,424 (6,859 ) 14,319 |
Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Current Period | Consolidating Statements of Operations Year ended December 31, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Net revenue $ 6,502 3,185 2,964 (1,369 ) 11,282 Operating costs and expenses: Cost of goods sold (exclusive of depreciation and amortization shown separately below) 3,979 1,617 1,832 (180 ) 7,248 Operating 442 533 288 (382 ) 881 Selling, general and administrative, including transaction related costs and stock-based compensation 1,252 282 473 (807 ) 1,200 Depreciation 65 37 72 — 174 Amortization 79 147 11 — 237 Impairment loss — 30 — — 30 5,817 2,646 2,676 (1,369 ) 9,770 Operating income 685 539 288 — 1,512 Other (expense) income: Equity in losses of investee — — (3 ) — (3 ) Losses on financial instruments (1 ) (1 ) — — (2 ) Interest expense, net (223 ) (15 ) (5 ) — (243 ) Foreign currency gain (loss) 2 — (2 ) — — Loss on extinguishment of debt — (2 ) — — (2 ) Intercompany interest (expense) income (34 ) 151 (117 ) — — (256 ) 133 (127 ) — (250 ) Income before income taxes 429 672 161 — 1,262 Income tax expense (127 ) (121 ) (86 ) — (334 ) Equity in earnings of subsidiaries, net of tax 626 50 — (676 ) — Net income 928 601 75 (676 ) 928 Less net income attributable to the noncontrolling interest (46 ) — (46 ) 46 (46 ) Net income attributable to QVC, Inc. stockholder $ 882 601 29 (630 ) 882 |
Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Prior 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 transaction related costs and stock-based compensation 1,097 40 428 (821 ) 744 Depreciation 67 7 81 — 155 Amortization 187 142 35 — 364 5,661 611 2,565 (1,375 ) 7,462 Operating income 637 389 283 — 1,309 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 405 487 194 — 1,086 Income tax (expense) benefit (129 ) 93 (103 ) — (139 ) Equity in earnings of subsidiaries, net of tax 671 47 — (718 ) — Net income 947 627 91 (718 ) 947 Less net income attributable to the noncontrolling interest (46 ) — (46 ) 46 (46 ) Net income attributable to QVC, Inc. stockholder $ 901 627 45 (672 ) 901 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 ) Gains 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 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Current Period | Consolidating Statements of Comprehensive Income Year ended December 31, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 928 601 75 (676 ) 928 Foreign currency translation adjustments, net of tax (48 ) — (48 ) 48 (48 ) Total comprehensive income 880 601 27 (628 ) 880 Comprehensive income attributable to noncontrolling interest (49 ) — (49 ) 49 (49 ) Comprehensive income attributable to QVC, Inc. stockholder $ 831 601 (22 ) (579 ) 831 |
Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Prior Period | Consolidating Statements of Comprehensive Income Year ended December 31, 2017 (in millions) Parent Combined Combined Eliminations Consolidated- Net income $ 947 627 91 (718 ) 947 Foreign currency translation adjustments, net of tax 135 — 135 (135 ) 135 Total comprehensive income 1,082 627 226 (853 ) 1,082 Comprehensive income attributable to noncontrolling interest (50 ) — (50 ) 50 (50 ) Comprehensive income attributable to QVC, Inc. stockholder $ 1,032 627 176 (803 ) 1,032 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, 2018 (in millions) Parent Combined Combined Eliminations Consolidated- Operating activities: Net cash provided by operating activities $ 461 592 103 — 1,156 Investing activities: Capital expenditures (121 ) (19 ) (88 ) — (228 ) Expenditures for television distribution rights — (139 ) (1 ) — (140 ) Changes in other noncurrent assets 1 (4 ) (13 ) — (16 ) Other investing activities — (29 ) — — (29 ) Intercompany investing activities 433 (688 ) — 255 — Net cash provided by (used in) investing activities 313 (879 ) (102 ) 255 (413 ) Financing activities: Principal payments of debt and capital lease obligations (2,680 ) (851 ) (10 ) — (3,541 ) Principal borrowings of debt from senior secured credit facility 2,362 388 — — 2,750 Proceeds from issuance of senior secured notes 225 — — — 225 Payment of debt origination fees (14 ) — — — (14 ) Capital contributions received from Qurate Retail, Inc. 340 180 — — 520 Dividends paid to Qurate Retail Inc. (367 ) — — — (367 ) Dividends paid to noncontrolling interest — — (40 ) — (40 ) Other financing activities (10 ) (8 ) — — (18 ) Net short-term intercompany debt (repayments) borrowings (548 ) 498 50 — — Other intercompany financing activities (11 ) 217 49 (255 ) — Net cash (used in) provided by financing activities (703 ) 424 49 (255 ) (485 ) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash — — 2 — 2 Net increase in cash, cash equivalents and restricted cash 71 137 52 — 260 Cash, cash equivalents and restricted cash, beginning of period 7 55 228 — 290 Cash, cash equivalents and restricted cash, end of period $ 78 192 280 — 550 |
Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Prior 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 ) Changes in other noncurrent assets (1 ) — — — (1 ) Intercompany investing activities 545 (1,507 ) — 962 — Common control transaction with Qurate Retail, Inc., net of cash received — 22 — — 22 Net cash provided by (used in) investing activities 441 (1,539 ) (45 ) 962 (181 ) 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 Qurate Retail, Inc. (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, cash equivalents and restricted cash — — 13 — 13 Net (decrease) increase in cash, cash equivalents and restricted cash (3 ) (42 ) 41 — (4 ) Cash, cash equivalents and restricted cash, beginning of period 10 97 187 — 294 Cash, cash equivalents and restricted cash, end of period $ 7 55 228 — 290 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 ) 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 297 91 (26 ) (583 ) (221 ) 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 Qurate Retail, Inc. (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, cash equivalents and restricted cash — — (20 ) — (20 ) Net increase (decrease) in cash, cash equivalents and restricted cash 1 (15 ) (30 ) — (44 ) Cash, cash equivalents and restricted cash, beginning of period 9 112 217 — 338 Cash, cash equivalents and restricted cash, end of period $ 10 97 187 — 294 |
Quarterly Financial Informati_2
Quarterly Financial Information (Tables) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Schedule of Quarterly Financial Information | Year ended December 31, 2018 (in millions) 1st Quarter (a) 2nd Quarter (a) 3rd Quarter (a) 4th Quarter Net revenue $ 2,602 2,556 2,569 3,555 Operating income $ 356 390 305 461 Net income $ 212 244 181 291 Net income attributable to QVC, Inc. stockholder $ 201 233 170 278 | Year ended December 31, 2017 (in millions) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter (a) Net revenue $ 1,965 1,979 2,010 2,817 Operating income $ 271 306 274 458 Net income $ 135 151 166 495 Net income attributable to QVC, Inc. stockholder $ 124 141 154 482 (a) The 4th quarter of the year ended December 31, 2017 and the 1st, 2nd and 3rd quarters of the year ended December 31, 2018, have been retrospectively adjusted as a result of the common control transaction with Qurate Retail on December 31, 2018, in order to combine the financial results of the Company and HSN (see note 1). |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 29, 2017 | Jun. 23, 2016 | |
General business information | |||||
Dividends paid to noncontrolling interest | $ 40 | $ 40 | $ 39 | ||
Line of credit facility maximum borrowing capacity | 3,650 | $ 2,650 | |||
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | 60 | $ 39 | |||
Severance Costs | 9 | ||||
Inventory Write-down | $ 4 | ||||
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% | ||||
Ownership Percentage by Parent | 100.00% | ||||
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 facilities | |||||
General business information | |||||
Line of credit facility maximum borrowing capacity | $ 3,250 | $ 2,250 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | $ 904 | |
Goodwill, Purchase Accounting Adjustments | $ 18 | |
Beginning balance | 5,979 | 4,995 |
Exchange rate fluctuations | (25) | 80 |
Ending balance | 5,972 | 5,979 |
QVC-U.S. | ||
Goodwill [Roll Forward] | ||
Beginning balance | 4,190 | 4,190 |
Ending balance | 4,190 | 4,190 |
QVC-International | ||
Goodwill [Roll Forward] | ||
Beginning balance | 885 | 805 |
Exchange rate fluctuations | (25) | 80 |
Ending balance | 860 | 885 |
HSN, Inc. | ||
Goodwill [Roll Forward] | ||
Goodwill, Acquired During Period | 904 | |
Goodwill, Purchase Accounting Adjustments | 18 | |
Beginning balance | 904 | 0 |
Exchange rate fluctuations | 0 | 0 |
Ending balance | $ 922 | $ 904 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Valuation Allowances and Reserves (Details) - Allowance for Sales Returns [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance beginning of year | $ 119 | $ 93 | $ 103 |
Additions- charged to earnings | 2,213 | 982 | 1,010 |
Deductions | (2,214) | (979) | (1,020) |
Balance end of year | $ 242 | $ 119 | $ 93 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies Other Details (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 15, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Interest rate swap arrangements (note 8) | $ 2 | |||
Cash Equivalents, at Carrying Value | $ 233 | 42 | ||
Customer returns | 2,213 | 1,811 | $ 1,815 | |
Advertising Expense | 138 | $ 86 | $ 84 | |
Derivative, notional amount | $ 125 | |||
CNR Home Shopping Co., Ltd. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 38 | |||
Equity method investment, ownership percentage | 49.00% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Indefinite LIved Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets Disclosure [Abstract] | |||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 30 | $ 0 | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies Common control transaction (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Dec. 29, 2017 | |
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | $ 60 | $ 39 | |||||||||||
Cash and cash equivalents | $ 543 | $ 282 | 543 | 282 | |||||||||
Accounts receivable, less allowance for doubtful accounts of $112 at December 31, 2018 and $91 at December 31, 2017 | 1,787 | 1,680 | 1,787 | 1,680 | |||||||||
Inventories | 1,280 | 1,204 | 1,280 | 1,204 | $ 1,182 | ||||||||
Property and equipment, net | 1,165 | 1,170 | 1,165 | 1,170 | |||||||||
Goodwill | 5,972 | 5,979 | 5,972 | 5,979 | $ 4,995 | ||||||||
Other intangible assets, net | 3,666 | 3,770 | 3,666 | 3,770 | |||||||||
Deferred income taxes | (700) | (730) | (700) | (730) | |||||||||
Other long-term liabilities | 173 | 128 | 173 | 128 | |||||||||
Business Combination, Consideration Transferred | 1,671 | ||||||||||||
Operating income | 461 | $ 305 | $ 390 | $ 356 | 458 | $ 274 | $ 306 | $ 271 | 1,512 | 1,309 | 1,203 | ||
HSN, Inc. | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Technology | $ 105 | ||||||||||||
Business Acquisition, Pro Forma Revenue | 11,114 | 11,161 | |||||||||||
Cash and cash equivalents | 22 | ||||||||||||
Accounts receivable, less allowance for doubtful accounts of $112 at December 31, 2018 and $91 at December 31, 2017 | 292 | ||||||||||||
Inventories | 185 | ||||||||||||
Property and equipment, net | 165 | ||||||||||||
Goodwill | $ 922 | $ 904 | 922 | 904 | 0 | 904 | |||||||
Other intangible assets, net | 1,165 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 425 | ||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Capitalized Software | 7 | ||||||||||||
Other Assets | 37 | ||||||||||||
Accounts Payable and Accrued Liabilities | (366) | ||||||||||||
Long-term Debt | (460) | ||||||||||||
Deferred income taxes | (263) | ||||||||||||
Other long-term liabilities | $ (10) | ||||||||||||
Business Acquisition, Pro Forma Operating Income (Loss) | 1,163 | $ 1,222 | |||||||||||
Business Combination, Consideration Transferred | $ 1,671 | ||||||||||||
Operating income | $ 38 | ||||||||||||
Purchased and internally developed software | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||||||||||||
Customer Relationships [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | ||||||||||||
Technology [Member] | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years |
Summary of Significant Accou_11
Summary of Significant Accounting Policies Adoption of New Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Accumulated deficit | $ (2,269) | $ (2,797) | $ (2,269) | $ (2,797) | $ (2,784) | |||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 1,200 | 744 | ||||||||||
Operating | 881 | 601 | $ 606 | |||||||||
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 7,248 | 5,598 | 5,540 | |||||||||
Accrued liabilities | 1,026 | 1,057 | 1,026 | 1,057 | 1,021 | |||||||
Prepaid expenses and other current assets | 216 | 71 | 216 | 71 | 70 | |||||||
Income Tax Expense (Benefit) | 334 | 139 | 385 | |||||||||
Inventories | 1,280 | 1,204 | 1,280 | 1,204 | 1,182 | |||||||
Net income | 291 | $ 181 | $ 244 | $ 212 | 495 | $ 166 | $ 151 | $ 135 | 928 | 947 | 642 | |
Net revenue | 3,555 | $ 2,569 | $ 2,556 | $ 2,602 | 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | 11,282 | 8,771 | $ 8,682 | |
Allowance for sales returns | 242 | $ 119 | 242 | $ 119 | ||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Accumulated deficit | 14 | |||||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 118 | |||||||||||
Operating | 2 | |||||||||||
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 10 | |||||||||||
Accrued liabilities | (36) | |||||||||||
Prepaid expenses and other current assets | $ 116 | 116 | ||||||||||
Income Tax Expense (Benefit) | 2 | |||||||||||
Inventories | (22) | |||||||||||
Net income | 7 | |||||||||||
Net revenue | 139 | |||||||||||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 1,082 | |||||||||||
Operating | 879 | |||||||||||
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 7,238 | |||||||||||
Income Tax Expense (Benefit) | 332 | |||||||||||
Net income | 921 | |||||||||||
Net revenue | $ 11,143 | |||||||||||
Adjustments for New Accounting Pronouncement [Member] | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Accumulated deficit | (1) | |||||||||||
Accrued liabilities | 0 | |||||||||||
Prepaid expenses and other current assets | (1) | |||||||||||
Inventories | $ 0 |
Accounts Receivable Accounts _3
Accounts Receivable Accounts Receivable (Accounts Receivable) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)installment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | $ 1,899 | $ 1,771 | |
Less allowance for doubtful accounts | (112) | (91) | |
Accounts receivable, net | 1,787 | 1,680 | |
Installment sales plan | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 1,533 | 1,396 | |
Credit Card Receivable [Member] | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 269 | 295 | |
Other receivables [Member] | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 97 | 80 | |
SG&A | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Finance income from company branded credit card issued by financial institution | $ 118 | $ 105 | $ 100 |
Minimum | Installment sales plan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of installments plan permits for customers | installment | 2 | ||
Maximum | Installment sales plan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of installments plan permits for customers | installment | 5 |
Accounts Receivable Accounts _4
Accounts Receivable Accounts Receivable (Activity in the Allowance for Doubtful Accounts) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance beginning of year | $ 91 | $ 97 | $ 86 |
Additions- charged to expense | 112 | 72 | 107 |
Deductions- write-offs | (91) | (78) | (96) |
Balance end of year | $ 112 | $ 91 | $ 97 |
Property and Equipment, Net P_3
Property and Equipment, Net Property and Equipment, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 2,446 | $ 2,344 |
Less: accumulated depreciation | (1,281) | (1,174) |
Property and equipment, net | $ 1,165 | 1,170 |
Property, Plant and Equipment, Useful Life | 20 years | |
Property and equipment, disposals | $ 56 | 40 |
Land | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 128 | 108 |
Buildings and improvements | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 1,174 | 1,166 |
Furniture and other equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 543 | 546 |
Broadcast equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 179 | 138 |
Computer equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 186 | 174 |
Transponders and terrestrial transmitter (note 9) | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | 178 | 170 |
Projects in progress | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property and equipment, gross | $ 58 | $ 42 |
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 | 2 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 | 10 years | |
Maximum | Broadcast equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 6 years | |
Maximum | Computer equipment | ||
Property, Plant and Equipment, Net, by Type [Abstract] | ||
Property, Plant and Equipment, Useful Life | 5 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 Right_3
Television Distribution Rights, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Percentage of Net Sales | 5.00% | ||
Television distribution rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Television distribution rights | $ 723 | $ 730 | |
Less accumulated amortization | (583) | (652) | |
Television distribution rights, net | $ 140 | 78 | |
Acquired finite-lived intangible assets, weighted average useful life | 2 years 2 months | ||
Amortization | $ 77 | 157 | $ 193 |
Commission Expense | $ 363 | $ 298 | $ 298 |
Television Distribution Right_4
Television Distribution Rights, Net (Future Amortization Expense) (Details) - Television distribution rights $ in Millions | Dec. 31, 2018USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,019 | $ 74 |
2,020 | 55 |
2,021 | 9 |
2,022 | 2 |
2,023 | $ 0 |
Other Intangible Assets, Net (O
Other Intangible Assets, Net (Other Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 30 | $ 0 | $ 0 |
Gross cost | |||
Purchased and internally developed software | 890 | 822 | |
Affiliate and customer relationships | 2,831 | 2,845 | |
Debt origination fees | 10 | 8 | |
Trademarks (indefinite life) | 3,025 | 3,055 | |
Other intangible assets (excluding goodwill), gross | 6,756 | 6,730 | |
Accumulated amortization | |||
Purchased and internally developed software | (640) | (548) | |
Affiliate and customer relationships | (2,450) | (2,409) | |
Debt origination fees | 0 | (3) | |
Other intangible assets (excluding goodwill), accumulated amortization | (3,090) | (2,960) | |
Other intangible assets, net | |||
Purchased and internally developed software | 250 | 274 | |
Affiliate and customer relationships | 381 | 436 | |
Debt origination fees | 10 | 5 | |
Other intangible assets (excluding goodwill), net | 3,666 | 3,770 | |
Reduction of intangible assets due to disposal of assets | 11 | 20 | |
Amortization of other intangible assets | $ 160 | $ 207 | $ 270 |
Purchased and internally developed software | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 4 years | ||
Affiliate and customer relationships | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 7 years 11 months | ||
Debt origination fees | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 5 years | ||
Other Intangible Assets | |||
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items] | |||
Remaining weighted average years | 6 years 4 months |
Other Intangible Assets, Net (F
Other Intangible Assets, Net (Future Amortization Expense) (Details) - Other Intangible Assets $ in Millions | Dec. 31, 2018USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2,019 | $ 148 |
2,020 | 117 |
2,021 | 93 |
2,022 | 64 |
2,023 | $ 64 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Accrued Liabilities [Abstract] | |||
Accounts payable non-trade | $ 314 | $ 324 | |
Income taxes | 37 | 77 | |
Accrued compensation and benefits | 146 | 195 | |
Allowance for sales returns | 242 | 119 | |
Sales and other taxes | 101 | 82 | |
Deferred revenue | 24 | 70 | |
Accrued interest | 58 | 58 | |
Accrued cable distribution fees | 39 | 63 | |
Other | 65 | 69 | |
Accrued liabilities | $ 1,026 | $ 1,021 | $ 1,057 |
Long-Term Debt (Debt) (Details)
Long-Term Debt (Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Build to suit lease obligation | $ 0 | $ 101 |
Less debt issuance costs, net | (25) | (22) |
Total debt and capital lease obligations | 5,120 | 5,650 |
Less current portion | (421) | (17) |
Long-term portion of debt and capital lease obligations | 4,699 | 5,633 |
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 |
6.375% Senior Secured Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 225 | 0 |
Senior secured credit facilities | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | 1,185 | 1,956 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Debt and capital lease obligations | $ 188 | $ 68 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 29, 2017 | Jun. 23, 2016 | Jun. 15, 2016 | Jan. 27, 2015 | Aug. 21, 2014 | Mar. 18, 2014 | Mar. 18, 2013 | Jul. 02, 2012 | |
Debt Instrument [Line Items] | |||||||||||
Line of credit facility maximum borrowing capacity | $ 3,650 | $ 2,650 | |||||||||
Line of credit facility standby letter of credit | 450 | ||||||||||
Line of credit facility uncommitted loan | $ 1,800 | ||||||||||
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 | $ 2,310 | ||||||||||
Line of credit facility interest rate at period end | 3.90% | ||||||||||
Derivative, notional amount | $ 125 | ||||||||||
Interest rate swap arrangements (note 8) | $ 2 | ||||||||||
Loss on extinguishment of debt | $ 2 | 0 | $ 0 | ||||||||
Debt weighted average interest rate | 4.60% | ||||||||||
Letters of Credit Outstanding, Amount | $ 13 | 21 | |||||||||
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% | ||||||||||
6.375% Senior Secured Notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument interest rate stated percentage | 6.375% | ||||||||||
Debt Instrument, Call Feature | 5 years | ||||||||||
HSN, Inc. | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility maximum borrowing capacity | $ 1,750 | ||||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 1,250 | ||||||||||
Syndicated Credit Agreement Secured Percentage | 100.00% | ||||||||||
Debt instrument lower range of basis spread on variable rate | 0.25% | ||||||||||
Debt instrument higher range of basis spread on variable rate | 0.75% | ||||||||||
Derivative, notional amount | $ 250 | ||||||||||
Derivative, Fixed Interest Rate | 1.05% | ||||||||||
Debt Instrument Interest Rate Including Derivative Fixed Rate | 2.35% | ||||||||||
Interest rate swap arrangements (note 8) | $ 5 | ||||||||||
Loss on extinguishment of debt | $ (2) | ||||||||||
HSN, Inc. Foreign Subs [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Syndicated Credit Agreement Secured Percentage | 65.00% | ||||||||||
250 million interest rate swap [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate swap arrangements (note 8) | $ 4 | ||||||||||
Senior secured credit facilities | HSN, Inc. | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility maximum borrowing capacity | $ 1,000 | $ 750 | |||||||||
Long-term Debt [Member] | HSN, Inc. | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility maximum borrowing capacity | $ 500 | ||||||||||
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% | ||||||||||
London Interbank Offered Rate (LIBOR) | HSN, Inc. | |||||||||||
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 facilities | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility maximum borrowing capacity | $ 400 | 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 facilities | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility maximum borrowing capacity | $ 3,250 | $ 2,250 | |||||||||
Minimum | HSN, Inc. | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.20% | ||||||||||
Maximum | HSN, Inc. | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.30% |
Leases and Transponder Servic_3
Leases and Transponder Service Agreements (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 05, 2018ft² | |
Capital leases | ||||
2,019 | $ 29 | |||
2,020 | 26 | |||
2,021 | 25 | |||
2,022 | 24 | |||
2,023 | 22 | |||
Thereafter | 117 | |||
Total | 243 | |||
Operating leases | ||||
2,019 | 30 | |||
2,020 | 22 | |||
2,021 | 13 | |||
2,022 | 10 | |||
2,023 | 8 | |||
Thereafter | 63 | |||
Total | $ 146 | |||
Capital leased assets, number of agreements | 16 | |||
Capital transponder monthly lease expense | $ 1 | |||
Capital leases income statement depreciation expense | 14 | $ 13 | $ 12 | |
Imputed interest on capital lease | 55 | |||
Operating leases expense | $ 34 | $ 23 | $ 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 | |||
Lessee Leasing Arrangements, Build to Suit, Amended Arrangement, Initial Amount Due | $ 10 | |||
Lessee Leasing Arrangements, Build to Suit, Amended Arrangement, Installment Payment | $ 12 | |||
Lessee Leasing Arrangements, Build to Suit, Amended Arrangement, Payment Term | 13 years | |||
Property and equipment useful life | 20 years | |||
ECDC [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 15 years | |||
Operating Leases, Rent Expense, Minimum Rentals | $ 10 | |||
Operating Leases, Rent Expense, Minimum Rentals, Final Year | $ 14 | |||
Lessee Leasing Arrangements, Operating Lease, Number of Five Year Extension Options | 2 | |||
Lessee, Operating Lease, Renewal Term | 5 years | |||
Lessee Leasing Arrangements, Operating Lease, Number of Four Year Extension Options | 1 | |||
Lessee, Operating Lease, Final Renewal Term | 4 years | |||
Operating leases | ||||
Area of lease (in sqft) | ft² | 1,700,000 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Prepaid expenses and other current assets | $ 216 | $ 70 | $ 71 |
Allowance for sales returns | 242 | $ 119 | |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Prepaid expenses and other current assets | $ 116 |
Revenue Disaggregation of Reven
Revenue Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | $ 3,555 | $ 2,569 | $ 2,556 | $ 2,602 | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 11,282 | $ 8,771 | $ 8,682 |
Home [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 4,198 | ||||||||||
Beauty [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 1,966 | ||||||||||
Apparel [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 1,776 | ||||||||||
Accessories [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 1,206 | ||||||||||
Electronics [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 1,248 | ||||||||||
Jewelry [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 686 | ||||||||||
Other revenue [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 202 | ||||||||||
QVC- Intersegment eliminations [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | (7) | ||||||||||
QVC- Intersegment eliminations [Member] | Home [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 0 | ||||||||||
QVC- Intersegment eliminations [Member] | Beauty [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 0 | ||||||||||
QVC- Intersegment eliminations [Member] | Apparel [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 0 | ||||||||||
QVC- Intersegment eliminations [Member] | Accessories [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 0 | ||||||||||
QVC- Intersegment eliminations [Member] | Electronics [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 0 | ||||||||||
QVC- Intersegment eliminations [Member] | Jewelry [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 0 | ||||||||||
QVC- Intersegment eliminations [Member] | Other revenue [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | (7) | ||||||||||
QVC-U.S. | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 6,349 | 6,140 | 6,120 | ||||||||
QVC-U.S. | Home [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 2,265 | ||||||||||
QVC-U.S. | Beauty [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 1,040 | ||||||||||
QVC-U.S. | Apparel [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 1,140 | ||||||||||
QVC-U.S. | Accessories [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 772 | ||||||||||
QVC-U.S. | Electronics [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 674 | ||||||||||
QVC-U.S. | Jewelry [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 324 | ||||||||||
QVC-U.S. | Other revenue [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 134 | ||||||||||
QVC-International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 2,738 | $ 2,631 | $ 2,562 | ||||||||
QVC-International | Home [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 1,023 | ||||||||||
QVC-International | Beauty [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 640 | ||||||||||
QVC-International | Apparel [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 453 | ||||||||||
QVC-International | Accessories [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 273 | ||||||||||
QVC-International | Electronics [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 119 | ||||||||||
QVC-International | Jewelry [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 213 | ||||||||||
QVC-International | Other revenue [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 17 | ||||||||||
HSN, Inc. | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 2,202 | ||||||||||
HSN, Inc. | Home [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 910 | ||||||||||
HSN, Inc. | Beauty [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 286 | ||||||||||
HSN, Inc. | Apparel [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 183 | ||||||||||
HSN, Inc. | Accessories [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 161 | ||||||||||
HSN, Inc. | Electronics [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 455 | ||||||||||
HSN, Inc. | Jewelry [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | 149 | ||||||||||
HSN, Inc. | Other revenue [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net revenue | $ 58 |
Revenue Valuation Allowances an
Revenue Valuation Allowances and Reserves (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Dec. 31, 2015 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Customer returns | $ 2,213 | $ 1,811 | $ 1,815 | ||
Allowance for Sales Returns [Member] | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Valuation Allowances and Reserves, Balance | 242 | 119 | 93 | $ 243 | $ 103 |
Additions- charged to earnings | 2,213 | 982 | 1,010 | ||
Deductions | $ (2,214) | (979) | $ (1,020) | ||
HSN, Inc. | Allowance for Sales Returns [Member] | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Valuation Allowances and Reserves, Reserves of Businesses Acquired | $ 23 |
Stock Options and Other Share_3
Stock Options and Other Share-Based Awards Stock Options and Other Share- Based Awards (Stock Options Activity) (Details) - QRTEA - Liberty Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding at beginning of the year (in shares) | 14,872,849 | |
Granted (in shares) | 4,016,618 | |
Transferred from zulily (in shares) | 2,785,968 | |
Exercised (in shares) | (3,045,271) | |
Forfeited (in shares) | (3,976,575) | |
Outstanding at end of the year (in shares) | 14,653,589 | 14,872,849 |
Weight average exercise price | ||
Outstanding at beginning of year (in dollars per share) | $ 24.53 | |
Granted (in dollars per share) | 26.77 | |
Transferred from zulily (in dollars per share) | 16.16 | |
Exercised (in dollars per share) | 16.60 | |
Forfeited (in dollars per share) | 27.25 | |
Outstanding at ending of year (in dollars per share) | $ 24.46 | $ 24.53 |
Additional Stock Option Disclosures | ||
Aggregate intrinsic value (000s) | $ 8,353 | $ 25,290 |
Weighted average remaining life (years) | 4 years 5 months | 5 years 1 month |
Exercisable at December 31, 2018 | ||
Options (in shares) | 6,970,577 | |
Weighted average exercise price (in dollars per share) | $ 23.85 | |
Aggregate intrinsic value (000s) | $ 6,214 | |
Weighted average remaining life (years) | 3 years 5 months |
Stock Options and Other Share_4
Stock Options and Other Share-Based Awards Stock Options and Other Share-Based Awards (Stock Options Valuations Assumptions) (Details) - Liberty Incentive Plan - QRTEA - Stock options | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Black- Scholes option pricing model valuation assumptions | |||
Expected volatility | 29.70% | 30.30% | 27.40% |
Expected term (years) | 5 years 2 months | 5 years 11 months | 6 years 1 month |
Risk free interest rate | 2.70% | 2.10% | 1.60% |
Stock Options and Other Share_5
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
QRTEA | |||
Weighted average grant fair value | |||
Outstanding at beginning of the year (in dollars per share) | $ 24.49 | ||
Granted (in dollars per share) | 26.23 | $ 22.49 | $ 25.86 |
Lapsed (in dollars per share) | 24.21 | ||
Forfeited (in dollars per share) | 26.06 | ||
Outstanding at end of the year (in dollars per share) | $ 25.42 | $ 24.49 | |
QRTEA [Member] | |||
Restricted shares | |||
Outstanding at beginning of the year (in shares) | 2,393,700 | ||
Granted (in shares) | 910,559 | ||
Lapsed (in shares) | (1,516,428) | ||
Forfeited (in shares) | (300,906) | ||
Outstanding at end of the year (in shares) | 1,599,293 | 2,393,700 | |
LVNTA | |||
Restricted shares | |||
Outstanding at beginning of the year (in shares) | 4,061 | ||
Granted (in shares) | 0 | ||
Lapsed (in shares) | (3,839) | ||
Forfeited (in shares) | (222) | ||
Outstanding at end of the year (in shares) | 0 | 4,061 | |
Weighted average grant fair value | |||
Outstanding at beginning of the year (in dollars per share) | $ 51.47 | ||
Granted (in dollars per share) | 0 | ||
Lapsed (in dollars per share) | 51.54 | ||
Forfeited (in dollars per share) | 50.52 | ||
Outstanding at end of the year (in dollars per share) | 0 | $ 51.47 | |
zulily, llc | QRTEA | |||
Weighted average grant fair value | |||
Transferred during period (in dollars per share) | $ 24.02 | ||
zulily, llc | QRTEA [Member] | |||
Restricted shares | |||
Transferred during period (in shares) | 110,550 | ||
Cornerstone Brands Inc [Member] | QRTEA | |||
Weighted average grant fair value | |||
Transferred during period (in dollars per share) | $ 24.42 | ||
Cornerstone Brands Inc [Member] | QRTEA [Member] | |||
Restricted shares | |||
Transferred during period (in shares) | 1,818 |
Stock Options and Other Share_6
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 46 | $ 39 | $ 32 |
Liberty Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of options exercised during period | 20 | 32 | 28 |
Unrecognized compensation cost related to options | $ 49 | ||
Unrecognized compensation cost, period for recognition | 2 years 5 months | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 37 | 10 | 8 |
Liberty Incentive Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 28 | 29 | 21 |
Liberty Incentive Plan | Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 18 | $ 10 | $ 11 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 24 | ||
Unrecognized compensation cost, period for recognition | 2 years 3 months | ||
Liberty Incentive Plan | QRTEA | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value of options granted during period | $ 8.52 | $ 7.86 | $ 7.84 |
Granted (in dollars per share) | $ 26.23 | $ 22.49 | $ 25.86 |
HSN, Inc. | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Ownership Percentage by Parent | 100.00% |
Income Taxes Income Taxes (Comp
Income Taxes Income Taxes (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
U.S. federal | $ 239 | $ 352 | $ 326 |
State and local | 37 | 27 | 29 |
Foreign jurisdictions | 84 | 87 | 73 |
Total | 360 | 466 | 428 |
Deferred: | |||
U.S. federal | (27) | (320) | (31) |
State and local | (2) | (7) | (8) |
Foreign jurisdictions | 3 | 0 | (4) |
Total | (26) | (327) | (43) |
Total income tax expense | $ 334 | $ 139 | $ 385 |
Income Taxes Income Taxes (Pre-
Income Taxes Income Taxes (Pre-tax Income, Domestic and Foreign) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
Consolidated pre- tax income | $ 1,262 | $ 1,086 | $ 1,027 |
QVC-U.S. | |||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
U.S. pre-tax income | 1,033 | 915 | 859 |
QVC-International | |||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
Foreign pre- tax income | 200 | 209 | 168 |
HSN, Inc. | |||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
Foreign pre- tax income | $ 29 | $ (38) | $ 0 |
Income Taxes Income Taxes (Effe
Income Taxes Income Taxes (Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation, Percent [Abstract] | |||
Provision at statutory rate | 21.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 2.20% | 1.00% | 1.30% |
Foreign taxes | 0.80% | 0.00% | (0.30%) |
Foreign earnings repatriation | 0.60% | 4.00% | 0.20% |
Valuation allowance | 2.60% | 1.00% | 1.00% |
Permanent differences | (0.20%) | (2.20%) | (0.60%) |
Impact of Tax Cuts and Jobs Act | (26.00%) | ||
Impact of foreign currency tax regulation | (0.60%) | 0.40% | 1.00% |
Other, net | 0.10% | (0.40%) | (0.10%) |
Total income tax expense | 26.50% | 12.80% | 37.50% |
Income Taxes Income Taxes (Defe
Income Taxes Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts | $ 29 | $ 28 |
Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986 | 33 | 30 |
Allowance for sales returns | 31 | 30 |
Deferred Tax Assets, Deferred Income | 15 | 29 |
Deferred compensation | 39 | 33 |
Unrecognized federal and state tax benefits | 10 | 11 |
Operating Loss Carryforwards | 49 | 34 |
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 17 | |
Accrued liabilities | 33 | 30 |
Other | 5 | 1 |
Subtotal | 261 | 226 |
Valuation allowance | (64) | (33) |
Total deferred tax assets | 197 | 193 |
Deferred tax liabilities: | ||
Depreciation and amortization | (840) | (876) |
Cumulative translation of foreign currencies | (16) | (18) |
Deferred tax liability, Investment in Subsidiaries | (41) | (29) |
Total deferred tax liabilities | (897) | (923) |
Net deferred tax liability | $ (700) | $ (730) |
Income Taxes Income Taxes (Reco
Income Taxes Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at December 31, 2017 | $ 53 | $ 55 |
Increases related to prior year tax positions | 1 | 1 |
Decreases related to prior year tax positions | (9) | (8) |
Decreases related to settlements with taxing authorities | 0 | (4) |
Increases related to current year tax positions | 9 | 6 |
Balance at December 31, 2018 | $ 54 | 53 |
Unrecognized Tax Benefits, Increase Resulting from Acquisition | $ 3 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Provision at statutory rate | 21.00% | 35.00% | 35.00% |
Income tax benefit | $ 282 | ||
Tax benefit recognized | 1,000,000 | $ 9,000,000 | $ 7,000,000 |
Unrecognized tax benefits that would impact effective tax rate | 43,000,000 | ||
Federal tax effect on unrecognized tax benefits | 11,000,000 | ||
Significant change in unrecognized tax benefits is reasonably possible, amount of unrecorded benefit | $ 2,000,000 | ||
UNITED STATES | |||
Income Tax Contingency [Line Items] | |||
Provision at statutory rate | 21.00% | 35.00% | |
Liberty | Tax Agreement | |||
Income Tax Contingency [Line Items] | |||
Capital contribution paid to parent company for taxes | $ 2,000,000 | $ 31,000,000 | |
Cash dividends paid to parent company for taxes | $ 64,000,000 | ||
Qurate | Tax Agreement | |||
Income Tax Contingency [Line Items] | |||
Current tax payments due to related parties | $ 26,000,000 | $ 52,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 29, 2017 | Jun. 30, 2016 | Jun. 23, 2016 | |
Related Party Transaction [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 3,650 | $ 2,650 | ||||
Letters of Credit Outstanding, Amount | 13 | $ 21 | ||||
Cornerstone Brands Inc [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | 68 | |||||
Notes Receivable, Related Parties, Noncurrent | 28 | |||||
zulily, llc | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amounts of transactions | 14 | 9 | $ 12 | |||
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% | |||||
Ownership Percentage by Parent | 100.00% | |||||
CommerceHub, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership Percentage by Parent | 99.00% | |||||
QVC [Member] | Senior secured credit facilities | ||||||
Related Party Transaction [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | $ 3,250 | 2,250 | ||||
Tranche One, Shared with Related Party [Member] | Senior secured credit facilities | ||||||
Related Party Transaction [Line Items] | ||||||
Line of credit facility maximum borrowing capacity | 400 | $ 400 | ||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 135 |
Assets and Liabilities Measur_3
Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 15, 2016 |
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 | ||
Recurring | |||
Current assets: | |||
Interest rate swap arrangements (note 8) | $ 5 | ||
Cash equivalents | 233 | 42 | |
Non-current assets: | |||
Interest rate swap arrangements (note 8) | 7 | ||
Long-term liabilities: | |||
Debt (note 8) | 4,758 | 5,592 | |
Recurring | Level 1 | |||
Current assets: | |||
Cash equivalents | 233 | 42 | |
Long-term liabilities: | |||
Debt (note 8) | 189 | ||
Recurring | Level 2 | |||
Current assets: | |||
Interest rate swap arrangements (note 8) | 5 | ||
Non-current assets: | |||
Interest rate swap arrangements (note 8) | 7 | ||
Long-term liabilities: | |||
Debt (note 8) | 4,569 | 5,592 | |
125 million interest rate swap [Member] | |||
Current assets: | |||
Interest rate swap arrangements (note 8) | 1 | ||
Non-current assets: | |||
Interest rate swap arrangements (note 8) | $ 2 | ||
250 million interest rate swap [Member] | |||
Current assets: | |||
Interest rate swap arrangements (note 8) | $ 4 |
Information about QVC's Opera_3
Information about QVC's Operating Segments (Revenue and Adjusted OIBDA by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | $ 3,555 | $ 2,569 | $ 2,556 | $ 2,602 | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 11,282 | $ 8,771 | $ 8,682 |
Adjusted OIBDA | 2,059 | 1,906 | 1,840 | ||||||||
QVC-U.S. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 6,349 | 6,140 | 6,120 | ||||||||
Adjusted OIBDA | 1,417 | 1,455 | 1,435 | ||||||||
QVC-International | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 2,738 | 2,631 | 2,562 | ||||||||
Adjusted OIBDA | 429 | $ 451 | $ 405 | ||||||||
HSN, Inc. | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | 2,202 | ||||||||||
Adjusted OIBDA | 213 | ||||||||||
Intersegment Eliminations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net revenue | (7) | ||||||||||
Adjusted OIBDA | $ 0 |
Information about QVC's Opera_4
Information about QVC's Operating Segments (Depreciation/Amortization by Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Depreciation | $ 174 | $ 155 | $ 142 |
Amortization | 237 | 364 | 463 |
QVC-U.S. | |||
Segment Reporting Information [Line Items] | |||
Depreciation | 90 | 93 | 78 |
Amortization | 147 | 330 | 414 |
QVC-International | |||
Segment Reporting Information [Line Items] | |||
Depreciation | 56 | 62 | 64 |
Amortization | 10 | $ 34 | $ 49 |
HSN, Inc. | |||
Segment Reporting Information [Line Items] | |||
Depreciation | 28 | ||
Amortization | $ 80 |
Information about QVC's Opera_5
Information about QVC's Operating Segments (Total Assets and CAPEX by Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total assets | $ 14,856 | $ 14,319 |
Capital expenditures | 228 | 152 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,785 | 9,429 |
Capital expenditures | 143 | 116 |
QVC-International | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,154 | 2,121 |
Capital expenditures | 67 | 36 |
HSN, Inc. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,917 | $ 2,769 |
Capital expenditures | $ 18 |
Information about QVC's Opera_6
Information about QVC's Operating Segments (Long-lived Assets by Segment) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total assets | $ 14,856 | $ 14,319 |
Capital expenditures | 228 | 152 |
Property and equipment, net | 1,165 | 1,170 |
QVC-U.S. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,785 | 9,429 |
Capital expenditures | 143 | 116 |
Property and equipment, net | 555 | 559 |
QVC-International | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,154 | 2,121 |
Capital expenditures | 67 | 36 |
Property and equipment, net | 454 | 446 |
HSN, Inc. | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,917 | 2,769 |
Capital expenditures | 18 | |
Property and equipment, net | $ 156 | $ 165 |
Information about QVC's Opera_7
Information about QVC's Operating Segments (Reconciliation of Adjusted OIBDA to Income before Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | |||
Adjusted OIBDA | $ 2,059 | $ 1,906 | $ 1,840 |
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | (30) | 0 | 0 |
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed | (60) | (39) | |
Stock-based compensation | (46) | (39) | (32) |
Depreciation and amortization | (411) | (519) | (605) |
Equity in losses of investee | (3) | (3) | (6) |
(Losses) gains on financial instruments | (2) | 0 | 2 |
Interest expense, net | (243) | (214) | (210) |
Foreign currency (loss) gain | 0 | (6) | 38 |
Loss on extinguishment of debt | (2) | 0 | 0 |
Income before income taxes | $ 1,262 | $ 1,086 | $ 1,027 |
Information about QVC's Opera_8
Information about QVC's Operating Segments (Net Revenue by Geographical Area) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers | |||||||||||
Net revenue | $ 3,555 | $ 2,569 | $ 2,556 | $ 2,602 | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 11,282 | $ 8,771 | $ 8,682 |
QVC-U.S. | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 8,544 | 6,140 | 6,120 | ||||||||
Japan | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 947 | 934 | 897 | ||||||||
Germany | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 943 | 899 | 865 | ||||||||
United Kingdom | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | 679 | 640 | 654 | ||||||||
Other countries | |||||||||||
Revenues from External Customers | |||||||||||
Net revenue | $ 169 | $ 158 | $ 146 |
Information about QVC's Opera_9
Information about QVC's Operating Segments (Property and Equipment By Geographical Area) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Property and equipment [Line Items] | ||
Property and equipment, net | $ 1,165 | $ 1,170 |
QVC-U.S. | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 712 | 724 |
Germany | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 161 | 164 |
Japan | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 165 | 143 |
United Kingdom | ||
Property and equipment [Line Items] | ||
Property and equipment, net | 77 | 84 |
Other countries | ||
Property and equipment [Line Items] | ||
Property and equipment, net | $ 50 | $ 55 |
Information about QVC's Oper_10
Information about QVC's Operating Segments Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
QVC-International | |||
Segment Reporting Information [Line Items] | |||
Segment Cost Allocation | $ 39 | $ 36 | $ 31 |
HSN, Inc. | |||
Segment Reporting Information [Line Items] | |||
Segment Cost Allocation | $ 8 |
Other Comprehensive Income (Acc
Other Comprehensive Income (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Foreign currency translation adjustments | |||
Beginning balance | $ (93) | $ (224) | $ (140) |
Other comprehensive income attributable to QVC, Inc. stockholder | (51) | 131 | (84) |
Ending balance | (144) | (93) | (224) |
AOCL | |||
Beginning balance | (93) | (224) | (140) |
Other comprehensive income attributable to QVC, Inc. stockholder | (51) | 131 | (84) |
Ending balance | $ (144) | $ (93) | $ (224) |
Other Comprehensive Income (Com
Other Comprehensive Income (Component of Other Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency translation adjustments before tax | $ (49) | $ 156 | $ (96) |
Tax (expense) benefit from foreign currency translation gain (loss) | 1 | (21) | 13 |
Foreign currency translation adjustments, net-of-tax | $ (48) | $ 135 | $ (83) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 2 Months Ended | |
Mar. 01, 2019 | Dec. 31, 2018 | |
Subsequent Event [Line Items] | ||
Line of credit facility remaining borrowing capacity | $ 2,310 | |
Qurate | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Dividends declared to parent company | $ 304 | |
Tranche One, Shared with Related Party [Member] | Senior secured credit facilities | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Line of credit facility remaining borrowing capacity | $ 150 |
Guarantor_Non-Guarantor Subsi_3
Guarantor/Non-Guarantor Subsidiary Financial Information (Narrative) (Details) | Dec. 31, 2018 |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | |
Subsidiary Guarantors, Ownership Percentage | 100.00% |
Guarantor_Non-Guarantor Subsi_4
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Financial Position) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | |||||
Cash and cash equivalents | $ 543 | $ 282 | |||
Restricted cash | 7 | 8 | |||
Accounts receivable, net | 1,787 | 1,680 | |||
Inventories | 1,280 | $ 1,182 | 1,204 | ||
Prepaid expenses and other current assets | 216 | 70 | 71 | ||
Total current assets | 3,833 | 3,245 | |||
Property and equipment, net | 1,165 | 1,170 | |||
Television Distribution Rights, Net | 140 | 78 | |||
Goodwill | 5,972 | 5,979 | $ 4,995 | ||
Other intangible assets, net | 3,666 | 3,770 | |||
Other noncurrent assets | 80 | 77 | |||
Investments in subsidiaries | 0 | 0 | |||
Total assets | 14,856 | 14,319 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 421 | 17 | |||
Accounts payable-trade | 1,008 | 958 | |||
Accrued liabilities | 1,026 | $ 1,021 | 1,057 | ||
Intercompany accounts (receivable) payable | 0 | 0 | |||
Total current liabilities | 2,455 | 2,032 | |||
Long-term portion of debt and capital lease obligations | 4,699 | 5,633 | |||
Deferred income taxes | 700 | 730 | |||
Other long-term liabilities | 173 | 128 | |||
Total liabilities | 8,027 | 8,523 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 6,710 | 5,686 | |||
Noncontrolling interest | 119 | 110 | |||
Total equity | 6,829 | 5,796 | $ 3,895 | $ 4,118 | |
Total liabilities and equity | 14,856 | 14,319 | |||
Parent issuer- QVC, Inc. | |||||
Current assets: | |||||
Cash and cash equivalents | 73 | 2 | |||
Restricted cash | 5 | 5 | |||
Accounts receivable, net | 1,166 | 1,076 | |||
Inventories | 725 | 758 | |||
Prepaid expenses and other current assets | 95 | 28 | |||
Total current assets | 2,064 | 1,869 | |||
Property and equipment, net | 281 | 295 | |||
Television Distribution Rights, Net | 0 | 0 | |||
Goodwill | 4,190 | 4,190 | |||
Other intangible assets, net | 529 | 539 | |||
Other noncurrent assets | 8 | 14 | |||
Investments in subsidiaries | 5,523 | 5,233 | |||
Total assets | 12,595 | 12,140 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 403 | 3 | |||
Accounts payable-trade | 494 | 455 | |||
Accrued liabilities | 358 | 366 | |||
Intercompany accounts (receivable) payable | (95) | 453 | |||
Total current liabilities | 1,160 | 1,277 | |||
Long-term portion of debt and capital lease obligations | 4,540 | 5,033 | |||
Deferred income taxes | 63 | 52 | |||
Other long-term liabilities | 122 | 92 | |||
Total liabilities | 5,885 | 6,454 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 6,710 | 5,686 | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | 6,710 | 5,686 | |||
Total liabilities and equity | 12,595 | 12,140 | |||
Combined subsidiary guarantors | |||||
Current assets: | |||||
Cash and cash equivalents | 192 | 55 | |||
Restricted cash | 0 | 0 | |||
Accounts receivable, net | 307 | 292 | |||
Inventories | 310 | 185 | |||
Prepaid expenses and other current assets | 73 | 20 | |||
Total current assets | 882 | 552 | |||
Property and equipment, net | 213 | 225 | |||
Television Distribution Rights, Net | 139 | 78 | |||
Goodwill | 922 | 904 | |||
Other intangible assets, net | 3,116 | 3,213 | |||
Other noncurrent assets | 20 | 16 | |||
Investments in subsidiaries | 885 | 1,626 | |||
Total assets | 6,177 | 6,614 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 1 | 0 | |||
Accounts payable-trade | 201 | 202 | |||
Accrued liabilities | 394 | 412 | |||
Intercompany accounts (receivable) payable | (1,015) | (1,513) | |||
Total current liabilities | (419) | (899) | |||
Long-term portion of debt and capital lease obligations | 6 | 460 | |||
Deferred income taxes | 695 | 725 | |||
Other long-term liabilities | 34 | 11 | |||
Total liabilities | 316 | 297 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 5,861 | 6,317 | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | 5,861 | 6,317 | |||
Total liabilities and equity | 6,177 | 6,614 | |||
Combined non-guarantor subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 278 | 225 | |||
Restricted cash | 2 | 3 | |||
Accounts receivable, net | 314 | 312 | |||
Inventories | 245 | 261 | |||
Prepaid expenses and other current assets | 48 | 23 | |||
Total current assets | 887 | 824 | |||
Property and equipment, net | 671 | 650 | |||
Television Distribution Rights, Net | 1 | 0 | |||
Goodwill | 860 | 885 | |||
Other intangible assets, net | 21 | 18 | |||
Other noncurrent assets | 52 | 47 | |||
Investments in subsidiaries | 0 | 0 | |||
Total assets | 2,492 | 2,424 | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 17 | 14 | |||
Accounts payable-trade | 313 | 301 | |||
Accrued liabilities | 274 | 279 | |||
Intercompany accounts (receivable) payable | 1,110 | 1,060 | |||
Total current liabilities | 1,714 | 1,654 | |||
Long-term portion of debt and capital lease obligations | 153 | 140 | |||
Deferred income taxes | (58) | (47) | |||
Other long-term liabilities | 17 | 25 | |||
Total liabilities | 1,826 | 1,772 | |||
QVC, Inc. stockholder's equity: | |||||
QVC, Inc. stockholder's equity | 547 | 542 | |||
Noncontrolling interest | 119 | 110 | |||
Total equity | 666 | 652 | |||
Total liabilities and equity | 2,492 | 2,424 | |||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||
Current assets: | |||||
Cash and cash equivalents | 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 | (6,408) | (6,859) | |||
Total assets | (6,408) | (6,859) | |||
Current liabilities: | |||||
Current portion of debt and capital lease obligations | 0 | 0 | |||
Accounts payable-trade | 0 | 0 | |||
Accrued liabilities | 0 | 0 | |||
Intercompany accounts (receivable) payable | 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 | (6,408) | (6,859) | |||
Noncontrolling interest | 0 | 0 | |||
Total equity | (6,408) | (6,859) | |||
Total liabilities and equity | $ (6,408) | $ (6,859) |
Guarantor_Non-Guarantor Subsi_5
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | $ 3,555 | $ 2,569 | $ 2,556 | $ 2,602 | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 11,282 | $ 8,771 | $ 8,682 |
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 7,248 | 5,598 | 5,540 | ||||||||
Operating costs and expenses: | |||||||||||
Operating | 881 | 601 | 606 | ||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 1,200 | 744 | |||||||||
Selling, General and Administrative Expense | 728 | ||||||||||
Depreciation | 174 | 155 | 142 | ||||||||
Amortization | 237 | 364 | 463 | ||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 30 | 0 | 0 | ||||||||
Operating expenses | 9,770 | 7,462 | 7,479 | ||||||||
Operating income | 461 | 305 | 390 | 356 | 458 | 274 | 306 | 271 | 1,512 | 1,309 | 1,203 |
Other (expense) income: | |||||||||||
Equity in losses of investee | (3) | (3) | (6) | ||||||||
(Losses) gains on financial instruments | (2) | 0 | 2 | ||||||||
Interest expense, net | (243) | (214) | (210) | ||||||||
Foreign currency gain (loss) | 0 | (6) | 38 | ||||||||
Loss on extinguishment of debt | (2) | 0 | 0 | ||||||||
Intercompany interest (expense) income | 0 | 0 | 0 | ||||||||
Nonoperating (expense) income | (250) | (223) | (176) | ||||||||
Income before income taxes | 1,262 | 1,086 | 1,027 | ||||||||
Income tax expense | (334) | (139) | (385) | ||||||||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | ||||||||
Net income | 291 | 181 | 244 | 212 | 495 | 166 | 151 | 135 | 928 | 947 | 642 |
Less net income attributable to the noncontrolling interest | (46) | (46) | (38) | ||||||||
Net income attributable to QVC, Inc. stockholder | $ 278 | $ 170 | $ 233 | $ 201 | $ 482 | $ 154 | $ 141 | $ 124 | 882 | 901 | 604 |
Parent issuer- QVC, Inc. | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | 6,502 | 6,298 | 6,179 | ||||||||
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 3,979 | 3,877 | 3,855 | ||||||||
Operating costs and expenses: | |||||||||||
Operating | 442 | 433 | 414 | ||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 1,252 | 1,097 | |||||||||
Selling, General and Administrative Expense | 1,116 | ||||||||||
Depreciation | 65 | 67 | 57 | ||||||||
Amortization | 79 | 187 | 245 | ||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | ||||||||||
Operating expenses | 5,817 | 5,661 | 5,687 | ||||||||
Operating income | 685 | 637 | 492 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | 0 | 0 | 0 | ||||||||
(Losses) gains on financial instruments | (1) | 2 | |||||||||
Interest expense, net | (223) | (215) | (211) | ||||||||
Foreign currency gain (loss) | 2 | (5) | 17 | ||||||||
Loss on extinguishment of debt | 0 | ||||||||||
Intercompany interest (expense) income | (34) | (12) | (2) | ||||||||
Nonoperating (expense) income | (256) | (232) | (194) | ||||||||
Income before income taxes | 429 | 405 | 298 | ||||||||
Income tax expense | (127) | (129) | (114) | ||||||||
Equity in earnings of subsidiaries, net of tax | 626 | 671 | 458 | ||||||||
Net income | 928 | 947 | 642 | ||||||||
Less net income attributable to the noncontrolling interest | (46) | (46) | (38) | ||||||||
Net income attributable to QVC, Inc. stockholder | 882 | 901 | 604 | ||||||||
Combined subsidiary guarantors | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | 3,185 | 1,000 | 1,001 | ||||||||
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 1,617 | 157 | 169 | ||||||||
Operating costs and expenses: | |||||||||||
Operating | 533 | 265 | 258 | ||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 282 | 40 | |||||||||
Selling, General and Administrative Expense | 1 | ||||||||||
Depreciation | 37 | 7 | 7 | ||||||||
Amortization | 147 | 142 | 168 | ||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 30 | ||||||||||
Operating expenses | 2,646 | 611 | 603 | ||||||||
Operating income | 539 | 389 | 398 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | 0 | 0 | 0 | ||||||||
(Losses) gains on financial instruments | (1) | 0 | |||||||||
Interest expense, net | (15) | 1 | 0 | ||||||||
Foreign currency gain (loss) | 0 | 1 | 0 | ||||||||
Loss on extinguishment of debt | (2) | ||||||||||
Intercompany interest (expense) income | 151 | 96 | 1 | ||||||||
Nonoperating (expense) income | 133 | 98 | 1 | ||||||||
Income before income taxes | 672 | 487 | 399 | ||||||||
Income tax expense | (121) | 93 | (156) | ||||||||
Equity in earnings of subsidiaries, net of tax | 50 | 47 | 189 | ||||||||
Net income | 601 | 627 | 432 | ||||||||
Less net income attributable to the noncontrolling interest | 0 | 0 | 0 | ||||||||
Net income attributable to QVC, Inc. stockholder | 601 | 627 | 432 | ||||||||
Combined non-guarantor subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | 2,964 | 2,848 | 2,787 | ||||||||
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | 1,832 | 1,744 | 1,726 | ||||||||
Operating costs and expenses: | |||||||||||
Operating | 288 | 277 | 274 | ||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | 473 | 428 | |||||||||
Selling, General and Administrative Expense | 346 | ||||||||||
Depreciation | 72 | 81 | 78 | ||||||||
Amortization | 11 | 35 | 50 | ||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | ||||||||||
Operating expenses | 2,676 | 2,565 | 2,474 | ||||||||
Operating income | 288 | 283 | 313 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | (3) | (3) | (6) | ||||||||
(Losses) gains on financial instruments | 0 | 0 | |||||||||
Interest expense, net | (5) | 0 | 1 | ||||||||
Foreign currency gain (loss) | (2) | (2) | 21 | ||||||||
Loss on extinguishment of debt | 0 | ||||||||||
Intercompany interest (expense) income | (117) | (84) | 1 | ||||||||
Nonoperating (expense) income | (127) | (89) | 17 | ||||||||
Income before income taxes | 161 | 194 | 330 | ||||||||
Income tax expense | (86) | (103) | (115) | ||||||||
Equity in earnings of subsidiaries, net of tax | 0 | 0 | 0 | ||||||||
Net income | 75 | 91 | 215 | ||||||||
Less net income attributable to the noncontrolling interest | (46) | (46) | (38) | ||||||||
Net income attributable to QVC, Inc. stockholder | 29 | 45 | 177 | ||||||||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net revenue | (1,369) | (1,375) | (1,285) | ||||||||
Cost of Goods Sold, Excluding Depreciation, Depletion, and Amortization | (180) | (180) | (210) | ||||||||
Operating costs and expenses: | |||||||||||
Operating | (382) | (374) | (340) | ||||||||
Selling, General and Administrative, Including Transaction Related Costs and Stock-Based Compensation | (807) | (821) | |||||||||
Selling, General and Administrative Expense | (735) | ||||||||||
Depreciation | 0 | 0 | 0 | ||||||||
Amortization | 0 | 0 | 0 | ||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 0 | ||||||||||
Operating expenses | (1,369) | (1,375) | (1,285) | ||||||||
Operating income | 0 | 0 | 0 | ||||||||
Other (expense) income: | |||||||||||
Equity in losses of investee | 0 | 0 | 0 | ||||||||
(Losses) gains on financial instruments | 0 | 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 | (676) | (718) | (647) | ||||||||
Net income | (676) | (718) | (647) | ||||||||
Less net income attributable to the noncontrolling interest | 46 | 46 | 38 | ||||||||
Net income attributable to QVC, Inc. stockholder | $ (630) | $ (672) | $ (609) |
Guarantor_Non-Guarantor Subsi_6
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | $ 291 | $ 181 | $ 244 | $ 212 | $ 495 | $ 166 | $ 151 | $ 135 | $ 928 | $ 947 | $ 642 |
Foreign currency translation adjustments, net of tax | (48) | 135 | (83) | ||||||||
Total comprehensive income | 880 | 1,082 | 559 | ||||||||
Comprehensive income attributable to noncontrolling interest | (49) | (50) | (39) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | 831 | 1,032 | 520 | ||||||||
Parent issuer- QVC, Inc. | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 928 | 947 | 642 | ||||||||
Foreign currency translation adjustments, net of tax | (48) | 135 | (83) | ||||||||
Total comprehensive income | 880 | 1,082 | 559 | ||||||||
Comprehensive income attributable to noncontrolling interest | (49) | (50) | (39) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | 831 | 1,032 | 520 | ||||||||
Combined subsidiary guarantors | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 601 | 627 | 432 | ||||||||
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 | ||||||||
Total comprehensive income | 601 | 627 | 432 | ||||||||
Comprehensive income attributable to noncontrolling interest | 0 | 0 | 0 | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | 601 | 627 | 432 | ||||||||
Combined non-guarantor subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | 75 | 91 | 215 | ||||||||
Foreign currency translation adjustments, net of tax | (48) | 135 | (83) | ||||||||
Total comprehensive income | 27 | 226 | 132 | ||||||||
Comprehensive income attributable to noncontrolling interest | (49) | (50) | (39) | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | (22) | 176 | 93 | ||||||||
Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Net income | (676) | (718) | (647) | ||||||||
Foreign currency translation adjustments, net of tax | 48 | (135) | 83 | ||||||||
Total comprehensive income | (628) | (853) | (564) | ||||||||
Comprehensive income attributable to noncontrolling interest | 49 | 50 | 39 | ||||||||
Comprehensive income attributable to QVC, Inc. stockholder | $ (579) | $ (803) | $ (525) |
Guarantor_Non-Guarantor Subsi_7
Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Cash Flow) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by operating activities | $ 1,156 | $ 1,202 | $ 1,178 | |
Investing activities: | ||||
Capital expenditures | (228) | (152) | (179) | |
Expenditures for television distribution rights | (140) | (50) | (38) | |
Other investing activities | (29) | 0 | (3) | |
Changes in other noncurrent assets | (16) | (1) | (1) | |
Intercompany investing activities | 0 | 0 | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | 22 | 0 | |
Net cash used in investing activities | (413) | (181) | (221) | |
Financing activities: | ||||
Principal payments of debt and capital lease obligations | (3,541) | (2,278) | (1,733) | |
Principal borrowings of debt from senior secured credit facilities | 2,750 | 2,162 | 1,505 | |
Proceeds from issuance of senior secured notes | 225 | 0 | 0 | |
Payment of debt origination fees | (14) | 0 | (2) | |
Capital contributions received from Qurate Retail, Inc. | 520 | 0 | 0 | |
Payments of Dividends | (367) | (866) | (703) | |
Dividends paid to noncontrolling interest | (40) | (40) | (39) | |
Other financing activities | (18) | (16) | (9) | |
Net short-term intercompany debt (repayments) borrowings | 0 | 0 | 0 | |
Other intercompany financing activities | 0 | 0 | 0 | |
Net cash used in financing activities | (485) | (1,038) | (981) | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 2 | 13 | (20) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 260 | (4) | (44) | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 550 | 290 | 294 | $ 338 |
Parent issuer- QVC, Inc. | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by operating activities | 461 | 641 | 555 | |
Investing activities: | ||||
Capital expenditures | (121) | (103) | (141) | |
Expenditures for television distribution rights | 0 | 0 | 0 | |
Other investing activities | 0 | (12) | ||
Changes in other noncurrent assets | 1 | (1) | (2) | |
Intercompany investing activities | 433 | 545 | 452 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | |||
Net cash used in investing activities | 313 | 441 | 297 | |
Financing activities: | ||||
Principal payments of debt and capital lease obligations | (2,680) | (2,268) | (1,727) | |
Principal borrowings of debt from senior secured credit facilities | 2,362 | 2,162 | 1,505 | |
Proceeds from issuance of senior secured notes | 225 | |||
Payment of debt origination fees | (14) | (2) | ||
Capital contributions received from Qurate Retail, Inc. | 340 | |||
Payments of Dividends | (367) | (866) | (703) | |
Dividends paid to noncontrolling interest | 0 | 0 | 0 | |
Other financing activities | (10) | (16) | (9) | |
Net short-term intercompany debt (repayments) borrowings | (548) | (170) | 61 | |
Other intercompany financing activities | (11) | 73 | 24 | |
Net cash used in financing activities | (703) | (1,085) | (851) | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 | 0 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 71 | (3) | 1 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 78 | 7 | 10 | 9 |
Combined subsidiary guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by operating activities | 592 | 507 | 408 | |
Investing activities: | ||||
Capital expenditures | (19) | (4) | (2) | |
Expenditures for television distribution rights | (139) | (50) | (38) | |
Other investing activities | (29) | 0 | ||
Changes in other noncurrent assets | (4) | 0 | 0 | |
Intercompany investing activities | (688) | (1,507) | 131 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 22 | |||
Net cash used in investing activities | (879) | (1,539) | 91 | |
Financing activities: | ||||
Principal payments of debt and capital lease obligations | (851) | 0 | 0 | |
Principal borrowings of debt from senior secured credit facilities | 388 | 0 | 0 | |
Proceeds from issuance of senior secured notes | 0 | |||
Payment of debt origination fees | 0 | 0 | ||
Capital contributions received from Qurate Retail, Inc. | 180 | |||
Payments of Dividends | 0 | 0 | 0 | |
Dividends paid to noncontrolling interest | 0 | 0 | 0 | |
Other financing activities | (8) | 0 | 0 | |
Net short-term intercompany debt (repayments) borrowings | 498 | (1,267) | (1,517) | |
Other intercompany financing activities | 217 | 2,257 | 1,003 | |
Net cash used in financing activities | 424 | 990 | (514) | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 | 0 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 137 | (42) | (15) | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 192 | 55 | 97 | 112 |
Combined non-guarantor subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by operating activities | 103 | 54 | 215 | |
Investing activities: | ||||
Capital expenditures | (88) | (45) | (36) | |
Expenditures for television distribution rights | (1) | 0 | 0 | |
Other investing activities | 0 | 9 | ||
Changes in other noncurrent assets | (13) | 0 | 1 | |
Intercompany investing activities | 0 | 0 | 0 | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | |||
Net cash used in investing activities | (102) | (45) | (26) | |
Financing activities: | ||||
Principal payments of debt and capital lease obligations | (10) | (10) | (6) | |
Principal borrowings of debt from senior secured credit facilities | 0 | 0 | 0 | |
Proceeds from issuance of senior secured notes | 0 | |||
Payment of debt origination fees | 0 | 0 | ||
Capital contributions received from Qurate Retail, Inc. | 0 | |||
Payments of Dividends | 0 | 0 | 0 | |
Dividends paid to noncontrolling interest | (40) | (40) | (39) | |
Other financing activities | 0 | 0 | 0 | |
Net short-term intercompany debt (repayments) borrowings | 50 | 1,437 | 1,456 | |
Other intercompany financing activities | 49 | (1,368) | (1,610) | |
Net cash used in financing activities | 49 | 19 | (199) | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 2 | 13 | (20) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 52 | 41 | (30) | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 280 | 228 | 187 | 217 |
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 | |
Other investing activities | 0 | 0 | ||
Changes in other noncurrent assets | 0 | 0 | 0 | |
Intercompany investing activities | 255 | 962 | (583) | |
Payments for (Proceeds from) Businesses and Interest in Affiliates | 0 | |||
Net cash used in investing activities | 255 | 962 | (583) | |
Financing activities: | ||||
Principal payments of debt and capital lease obligations | 0 | 0 | 0 | |
Principal borrowings of debt from senior secured credit facilities | 0 | 0 | 0 | |
Proceeds from issuance of senior secured notes | 0 | |||
Payment of debt origination fees | 0 | 0 | ||
Capital contributions received from Qurate Retail, Inc. | 0 | |||
Payments of Dividends | 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 | (255) | (962) | 583 | |
Net cash used in financing activities | (255) | (962) | 583 | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 | 0 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 0 | 0 | 0 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 0 | $ 0 | $ 0 | $ 0 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Cash contributions to defined contribution plans | $ 22 | $ 18 | $ 23 |
Quarterly Financial Informati_3
Quarterly Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenue | $ 3,555 | $ 2,569 | $ 2,556 | $ 2,602 | $ 2,817 | $ 2,010 | $ 1,979 | $ 1,965 | $ 11,282 | $ 8,771 | $ 8,682 |
Operating income | 461 | 305 | 390 | 356 | 458 | 274 | 306 | 271 | 1,512 | 1,309 | 1,203 |
Net income | 291 | 181 | 244 | 212 | 495 | 166 | 151 | 135 | 928 | 947 | 642 |
Net income attributable to QVC, Inc. stockholder | $ 278 | $ 170 | $ 233 | $ 201 | $ 482 | $ 154 | $ 141 | $ 124 | $ 882 | $ 901 | $ 604 |