Guarantor/Non-Guarantor Subsidiary Financial Information | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 |
Guarantor Non-guarantor Subsidiary Financial Information [Abstract] | ' | ' |
Guarantor Non-guarantor Subsidiary Financial Information | ' | ' |
Guarantor/Non-guarantor Subsidiary Financial Information | (19) Guarantor/Non-guarantor Subsidiary Financial Information |
The following information contains the condensed consolidating financial statements for the Company, the parent on a stand-alone basis (QVC, Inc.), the combined subsidiary guarantors (Affiliate Relations Holdings, Inc.; Affiliate Investment, Inc.; AMI 2, Inc.; ER Marks, Inc.; QVC International LLC; QVC Rocky Mount, Inc. and QVC San Antonio, LLC) and the combined non-guarantor subsidiaries pursuant to Rule 3-10 of Regulation S-X. Certain non-guarantor subsidiaries are majority-owned by QVC International LLC, which is a guarantor subsidiary. | 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 International LLC; QVC Rocky Mount, Inc. and QVC San Antonio, LLC) and the combined non-guarantor subsidiaries pursuant to Rule 3-10 of Regulation S-X. Certain non-guarantor subsidiaries are majority-owned by QVC International LLC, which is a guarantor subsidiary. |
These condensed consolidating financial statements have been prepared from the Company's financial information on the same basis of accounting as the Company's condensed consolidated financial statements. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, such as management fees, royalty revenue and expense, interest income and expense and gains on intercompany asset transfers. 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. | 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 and interest income and expense. Goodwill and other intangible assets have been allocated to the subsidiaries based on management’s estimates. Certain costs have been partially allocated to all of the subsidiaries of the Company. |
During the three months ended June 30, 2014, an intangible asset held by certain non-guarantor subsidiaries was sold to QVC, Inc. resulting in a gain of $20 million reflected in intercompany interest and other income for the non-guarantor subsidiaries and also included in equity in earnings of subsidiaries for the subsidiary guarantors. The gain is eliminated in the eliminations column. The impact of these earnings has been eliminated in the presentation of intangible assets and equity in earnings of subsidiaries of the parent company. | The subsidiary guarantors are 100% owned by the Company. All guarantees are full and unconditional and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its U.S. subsidiaries, including the guarantors, by dividend or loan. The Company has not presented separate notes and other disclosures concerning the subsidiary guarantors as the Company has determined that such material information is available in the notes to the Company's consolidated financial statements. |
The subsidiary guarantors are 100% owned by the Company. All guarantees are full and unconditional and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its U.S. subsidiaries, including the guarantors, by dividend or loan. The Company has not presented separate notes and other disclosures concerning the subsidiary guarantors as the Company has determined that such material information is available in the notes to the Company's condensed consolidated financial statements. | The Company adjusted the previously reported consolidating financial statements to correctly classify transactions among QVC Inc., the combined subsidiary guarantors and the combined non-guarantor subsidiaries. |
The Company adjusted the previously reported consolidating financial statements to correctly classify transactions among QVC Inc., the combined subsidiary guarantors and the combined non-guarantor subsidiaries. | The adjustments to the consolidating balance sheets: |
The adjustments to the condensed consolidating statements of operations: | | | | | | | | | | | | |
| | | | | | | | | | | | • | increased intercompany accounts receivable of the combined non-guarantor subsidiaries by $650 million and increased intercompany accounts payable of QVC, Inc. by $1,055 million related to cumulative revenue net of cumulative cost of goods sold and cumulative operating expenses, which have been attributed from QVC, Inc. to the combined non-guarantor subsidiaries as of December 31, 2012; and | | | | | | | | | | |
• | attributed net revenue of $58 million and operating expenses of $9 million from QVC, Inc. to the combined non-guarantor subsidiaries for the three months ended June 30, 2013; | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | • | increased shareholder’s equity for the combined subsidiary guarantors by $405 million and combined non-guarantor subsidiaries by $650 million with an equal and offsetting increase in the investment in subsidiaries of QVC, Inc. and its corresponding elimination as of December 31, 2012. | | | | | | | | | | |
• | recognized equal and offsetting increases in the equity in earnings of subsidiaries of QVC, Inc. with a corresponding elimination for the three months ended June 30, 2013; | | | | | | | | | | | The adjustments to the consolidating statements of operations: |
| | | | | | | | | | | | | | | | | | | | | | | |
• | attributed net revenue of $112 million, cost of goods sold of $11 million and operating expenses of $17 million from QVC, Inc. to the combined non-guarantor subsidiaries for the six months ended June 30, 2013; and | | | | | | | | | | | • | attributed $231 million and $199 million of revenue, $69 million and $73 million of cost of goods sold and $33 million and $25 million in operating expenses for the years ended 2012 and 2011, respectively, from QVC, Inc. to the combined non-guarantor subsidiaries and recognized equal and offsetting increases in the equity in earnings of subsidiaries of QVC, Inc.; and | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
• | recognized equal and offsetting increases in the equity in earnings of subsidiaries of QVC, Inc. with a corresponding elimination for the six months ended June 30, 2013. | | | | | | | | | | | • | recognized $63 million and $52 million for the years ended 2012 and 2011, respectively, in net income attributable to noncontrolling interests of QVC, Inc. and eliminated that income in consolidation. | | | | | | | | | | |
The adjustments to the condensed consolidating statements of cash flows for the six months ended June 30, 2013: | The adjustments to the condensed consolidating statements of cash flows: |
| | | | | | | | | | | | | | | | | | | | | | | |
• | attributed net cash provided by operating activities of $83 million from QVC, Inc. to the combined non-guarantor subsidiaries primarily related to revenue net of cost of goods sold and operating expenses; | | | | | | | | | | | • | attributed net cash provided by operating activities from QVC, Inc. to the combined non-guarantor subsidiaries primarily related to revenue net of cost of goods sold and operating expenses of $156 million and $103 million for the years ended 2012 and 2011, respectively; | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
• | decreased net cash provided by investing activities of $34 million of QVC, Inc. with an equal and offsetting elimination; and | | | | | | | | | | | • | increased net cash provided by the investing activities of QVC, Inc. of $101 million for the year ended 2012, decreased net cash used in the investing activities of QVC, Inc. of $37 million for the year ended 2011 and increased net cash provided by the investing activities of the combined subsidiary guarantors of $49 million for the year ended 2012, all with equal and offsetting eliminations; and | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
• | increased net cash provided by financing activities of $117 million of QVC, Inc. and decreased net cash used in financing activities of $83 million of the non-guarantor subsidiaries, all with equal and offsetting eliminations. | | | | | | | | | | | • | increased net cash provided by the financing activities of QVC, Inc. of $55 million and $140 million for the years ended 2012 and 2011, respectively, decreased net cash used in the financing activities of the combined subsidiary guarantors of $48 million for the year ended 2012 and decreased net cash used in the financing activities of the non-guarantor subsidiaries of $152 million and $106 million for the years ended 2012 and 2011, respectively, all with equal and offsetting eliminations. | | | | | | | | | | |
The adjustments had no impact to the Company's condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive income, condensed consolidated statements of changes in equity or condensed consolidated statements of cash flows for any current and previously reported period. | The adjustments had no impact to the Company's consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of changes in equity or consolidated statements of cash flows for any current and previously reported period. |
| The effect of the adjustment on equity as of January 1, 2012 was as follows: |
Condensed consolidating balance sheets | |
| | | | | | | | | | | | |
| | | | | | | | | | | | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
June 30, 2014 | | issuer- | subsidiary | non-guarantor | QVC, Inc. and |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | | QVC, Inc. | guarantors | subsidiaries | subsidiaries |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | As previously reported | $ | 7,890 | | 3,465 | | 1,716 | | (5,052 | ) | 8,019 | |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Assets | Adjustment | — | | 450 | | 465 | | (915 | ) | — | |
Current assets: | | | | | |
Adjusted | $ | 7,890 | | 3,915 | | 2,181 | | (5,967 | ) | 8,019 | |
Cash and cash equivalents | $ | 18 | | 162 | | 368 | | — | | 548 | |
Consolidating balance sheets |
Restricted cash | 11 | | — | | 3 | | — | | 14 | | |
| | | | | | | | | | | |
Accounts receivable, net | 490 | | — | | 266 | | — | | 756 | | December 31, 2013 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
Inventories | 725 | | — | | 264 | | — | | 989 | | issuer- | subsidiary | non-guarantor | QVC, Inc. and |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Deferred income taxes | 147 | | — | | 18 | | — | | 165 | | Assets |
Current assets: | | | | | |
Prepaid expenses | 28 | | — | | 29 | | — | | 57 | |
Cash and cash equivalents | $ | 78 | | 133 | | 246 | | — | | 457 | |
Total current assets | 1,419 | | 162 | | 948 | | — | | 2,529 | |
Restricted cash | 11 | | — | | 3 | | — | | 14 | |
Property and equipment, net | 253 | | 66 | | 757 | | — | | 1,076 | |
Accounts receivable, net | 816 | | — | | 295 | | — | | 1,111 | |
Cable and satellite television distribution rights, net | — | | 441 | | 99 | | — | | 540 | |
Inventories | 684 | | — | | 247 | | — | | 931 | |
Goodwill | 4,169 | | — | | 1,041 | | — | | 5,210 | |
Deferred income taxes | 146 | | — | | 16 | | — | | 162 | |
Other intangible assets, net | 1,092 | | 2,049 | | 102 | | — | | 3,243 | |
Prepaid expenses | 20 | | — | | 27 | | — | | 47 | |
Other noncurrent assets | 9 | | — | | 60 | | — | | 69 | |
Total current assets | 1,755 | | 133 | | 834 | | — | | 2,722 | |
Investments in subsidiaries | 4,893 | | 1,601 | | — | | (6,494 | ) | — | |
Property, plant and equipment, net | 265 | | 67 | | 774 | | — | | 1,106 | |
Total assets | $ | 11,835 | | 4,319 | | 3,007 | | (6,494 | ) | 12,667 | |
Cable and satellite television distribution rights, net | — | | 510 | | 114 | | — | | 624 | |
Liabilities and equity |
Current liabilities: | | | | | | Goodwill | 4,169 | | — | | 1,028 | | — | | 5,197 | |
|
Current portion of debt and capital lease obligations | $ | 2 | | — | | 9 | | — | | 11 | | Other intangible assets, net | 1,128 | | 2,050 | | 158 | | — | | 3,336 | |
|
Accounts payable-trade | 275 | | — | | 195 | | — | | 470 | | Other noncurrent assets | 8 | | — | | 63 | | — | | 71 | |
|
Accrued liabilities | 150 | | 86 | | 507 | | — | | 743 | | Investments in subsidiaries | 4,894 | | 1,628 | | — | | (6,522 | ) | — | |
|
Intercompany accounts payable (receivable) | 1,084 | | (814 | ) | (270 | ) | — | | — | | Total assets | $ | 12,219 | | 4,388 | | 2,971 | | (6,522 | ) | 13,056 | |
|
Total current liabilities | 1,511 | | (728 | ) | 441 | | — | | 1,224 | | Liabilities and equity |
Current liabilities: | | | | | |
Long-term portion of debt and capital lease obligations | 3,886 | | — | | 51 | | — | | 3,937 | |
Current portion of debt and capital lease obligations | $ | 2 | | — | | 11 | | — | | 13 | |
Deferred compensation | 14 | | — | | — | | — | | 14 | |
Accounts payable-trade | 266 | | — | | 159 | | — | | 425 | |
Deferred income taxes | 319 | | 901 | | 3 | | — | | 1,223 | |
Accrued liabilities | 463 | | 96 | | 470 | | — | | 1,029 | |
Other long-term liabilities | 109 | | — | | 48 | | — | | 157 | |
Intercompany accounts payable (receivable) | 1,019 | | (879 | ) | (140 | ) | — | | — | |
Total liabilities | 5,839 | | 173 | | 543 | | — | | 6,555 | |
Total current liabilities | 1,750 | | (783 | ) | 500 | | — | | 1,467 | |
Equity: | | | | | |
Long-term portion of debt and capital lease obligations | 3,745 | | — | | 55 | | — | | 3,800 | |
QVC, Inc. stockholder's equity | 5,996 | | 4,146 | | 2,348 | | (6,494 | ) | 5,996 | |
Deferred compensation | 13 | | — | | 1 | | — | | 14 | |
Noncontrolling interest | — | | — | | 116 | | — | | 116 | |
Deferred income taxes | 399 | | 923 | | 4 | | — | | 1,326 | |
Total equity | 5,996 | | 4,146 | | 2,464 | | (6,494 | ) | 6,112 | |
Other long-term liabilities | 90 | | — | | 18 | | — | | 108 | |
Total liabilities and equity | $ | 11,835 | | 4,319 | | 3,007 | | (6,494 | ) | 12,667 | |
Total liabilities | 5,997 | | 140 | | 578 | | — | | 6,715 | |
|
Condensed consolidating balance sheets | Equity: | | | | | |
|
| | | | | | | | | | | | QVC, Inc. shareholder's equity | 6,222 | | 4,248 | | 2,274 | | (6,522 | ) | 6,222 | |
December 31, 2013 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | | Noncontrolling interest | — | | — | | 119 | | — | | 119 | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
QVC, Inc. | guarantors | subsidiaries | subsidiaries | Total equity | 6,222 | | 4,248 | | 2,393 | | (6,522 | ) | 6,341 | |
Assets |
Current assets: | | | | | | Total liabilities and equity | $ | 12,219 | | 4,388 | | 2,971 | | (6,522 | ) | 13,056 | |
|
Cash and cash equivalents | $ | 78 | | 133 | | 246 | | — | | 457 | | Consolidating balance sheets - Adjusted |
|
Restricted cash | 11 | | — | | 3 | | — | | 14 | | | | | | | | | | | | | |
December 31, 2012 | |
Accounts receivable, net | 816 | | — | | 295 | | — | | 1,111 | | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
Inventories | 684 | | — | | 247 | | — | | 931 | | QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Assets |
Deferred income taxes | 146 | | — | | 16 | | — | | 162 | | Current assets: | | | | | |
|
Prepaid expenses | 20 | | — | | 27 | | — | | 47 | | Cash and cash equivalents | $ | 75 | | 165 | | 300 | | — | | 540 | |
|
Total current assets | 1,755 | | 133 | | 834 | | — | | 2,722 | | Restricted cash | 13 | | — | | 2 | | — | | 15 | |
|
Property and equipment, net | 265 | | 67 | | 774 | | — | | 1,106 | | Accounts receivable, net | 747 | | — | | 308 | | — | | 1,055 | |
|
Cable and satellite television distribution rights, net | — | | 510 | | 114 | | — | | 624 | | Inventories | 691 | | — | | 218 | | — | | 909 | |
|
Goodwill | 4,169 | | — | | 1,028 | | — | | 5,197 | | Deferred income taxes | 131 | | — | | 20 | | — | | 151 | |
|
Other intangible assets, net | 1,128 | | 2,050 | | 158 | | — | | 3,336 | | Prepaid expenses | 19 | | — | | 34 | | — | | 53 | |
|
Other noncurrent assets | 8 | | — | | 63 | | — | | 71 | | Total current assets | 1,676 | | 165 | | 882 | | — | | 2,723 | |
|
Investments in subsidiaries | 4,894 | | 1,628 | | — | | (6,522 | ) | — | | Property, plant and equipment, net | 247 | | 67 | | 817 | | — | | 1,131 | |
|
Total assets | $ | 12,219 | | 4,388 | | 2,971 | | (6,522 | ) | 13,056 | | Cable and satellite television distribution rights, net | — | | 618 | | 146 | | — | | 764 | |
|
Liabilities and equity | Goodwill | 4,169 | | — | | 1,065 | | — | | 5,234 | |
Current liabilities: | | | | | |
Other intangible assets, net | 1,280 | | 2,049 | | 180 | | — | | 3,509 | |
Current portion of debt and capital lease obligations | $ | 2 | | — | | 11 | | — | | 13 | |
Other noncurrent assets | 14 | | — | | 63 | | — | | 77 | |
Accounts payable-trade | 336 | | — | | 158 | | — | | 494 | |
Investments in subsidiaries | 4,844 | | 1,838 | | — | | (6,682 | ) | — | |
Accrued liabilities | 393 | | 96 | | 471 | | — | | 960 | |
Total assets | $ | 12,230 | | 4,737 | | 3,153 | | (6,682 | ) | 13,438 | |
Intercompany accounts payable (receivable) | 1,019 | | (879 | ) | (140 | ) | — | | — | |
Liabilities and equity |
Total current liabilities | 1,750 | | (783 | ) | 500 | | — | | 1,467 | | Current liabilities: | | | | | |
|
Long-term portion of debt and capital lease obligations | 3,745 | | — | | 55 | | — | | 3,800 | | Current portion of debt and capital lease obligations | $ | 2 | | — | | 10 | | — | | 12 | |
|
Deferred compensation | 13 | | — | | 1 | | — | | 14 | | Accounts payable-trade | 324 | | — | | 242 | | — | | 566 | |
|
Deferred income taxes | 399 | | 923 | | 4 | | — | | 1,326 | | Accrued liabilities | 402 | | 106 | | 447 | | — | | 955 | |
|
Other long-term liabilities | 90 | | — | | 18 | | — | | 108 | | Intercompany accounts payable (receivable) | 829 | | (816 | ) | (13 | ) | — | | — | |
|
Total liabilities | 5,997 | | 140 | | 578 | | — | | 6,715 | | Total current liabilities | 1,557 | | (710 | ) | 686 | | — | | 1,533 | |
|
Equity: | | | | | | Long-term portion of debt and capital lease obligations | 3,404 | | — | | 61 | | — | | 3,465 | |
|
QVC, Inc. stockholder's equity | 6,222 | | 4,248 | | 2,274 | | (6,522 | ) | 6,222 | | Deferred compensation | 11 | | — | | 1 | | — | | 12 | |
|
Noncontrolling interest | — | | — | | 119 | | — | | 119 | | Deferred income taxes | 431 | | 964 | | 15 | | — | | 1,410 | |
|
Total equity | 6,222 | | 4,248 | | 2,393 | | (6,522 | ) | 6,341 | | Other long-term liabilities | 137 | | 17 | | 30 | | — | | 184 | |
|
Total liabilities and equity | $ | 12,219 | | 4,388 | | 2,971 | | (6,522 | ) | 13,056 | | Total liabilities | 5,540 | | 271 | | 793 | | — | | 6,604 | |
|
| Equity: | | | | | |
Condensed consolidating statements of operations |
| QVC, Inc. shareholder's equity | 6,690 | | 4,466 | | 2,216 | | (6,682 | ) | 6,690 | |
| | | | | | | | | | | |
Three months ended June 30, 2014 | | Noncontrolling interest | — | | — | | 144 | | — | | 144 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | Total equity | 6,690 | | 4,466 | | 2,360 | | (6,682 | ) | 6,834 | |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net revenue | $ | 1,368 | | 187 | | 692 | | (233 | ) | 2,014 | | Total liabilities and equity | $ | 12,230 | | 4,737 | | 3,153 | | (6,682 | ) | 13,438 | |
|
Cost of goods sold | 850 | | 23 | | 432 | | (55 | ) | 1,250 | | Consolidating statements of operations |
|
Gross profit | 518 | | 164 | | 260 | | (178 | ) | 764 | | | | | | | | | | | | | |
Year ended December, 2013 | |
Operating expenses: | | | | | | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
Operating | 42 | | 49 | | 89 | | — | | 180 | | QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net revenue | $ | 5,914 | | 841 | | 2,914 | | (1,046 | ) | 8,623 | |
Selling, general and administrative, including stock-based compensation | 243 | | 1 | | 89 | | (178 | ) | 155 | |
Cost of goods sold | 3,804 | | 107 | | 1,831 | | (277 | ) | 5,465 | |
Depreciation | 10 | | 1 | | 22 | | — | | 33 | |
Gross profit | 2,110 | | 734 | | 1,083 | | (769 | ) | 3,158 | |
Amortization | 58 | | 38 | | 16 | | — | | 112 | |
Operating expenses: | | | | | |
Intercompany management expense (income) | 20 | | (5 | ) | (15 | ) | — | | — | |
Operating | 168 | | 214 | | 358 | | — | | 740 | |
| 373 | | 84 | | 201 | | (178 | ) | 480 | |
Selling, general and administrative, including stock-based compensation | 1,028 | | — | | 356 | | (769 | ) | 615 | |
Operating income | 145 | | 80 | | 59 | | — | | 284 | |
Depreciation | 38 | | 6 | | 83 | | — | | 127 | |
Other (expense) income: | | | | | |
Amortization of intangible assets | 204 | | 146 | | 81 | | — | | 431 | |
Equity in losses of investee | — | | — | | (2 | ) | — | | (2 | ) |
Intercompany management expense (income) | 50 | | 1 | | (51 | ) | — | | — | |
Interest expense, net | (60 | ) | — | | — | | — | | (60 | ) |
| 1,488 | | 367 | | 827 | | (769 | ) | 1,913 | |
Foreign currency (loss) gain | (1 | ) | — | | 2 | | — | | 1 | |
Operating income | 622 | | 367 | | 256 | | — | | 1,245 | |
Intercompany interest and other (expense) income | (5 | ) | 13 | | 12 | | (20 | ) | — | |
Other (expense) income: | | | | | |
| (66 | ) | 13 | | 12 | | (20 | ) | (61 | ) |
Equity in losses of investee | — | | — | | (4 | ) | — | | (4 | ) |
Income before income taxes | 79 | | 93 | | 71 | | (20 | ) | 223 | |
Gains on financial instruments | 12 | | — | | 3 | | — | | 15 | |
Income tax expense | (27 | ) | (28 | ) | (28 | ) | — | | (83 | ) |
Interest expense, net | (214 | ) | — | | — | | — | | (214 | ) |
Equity in earnings of subsidiaries, net of tax | 88 | | 29 | | — | | (117 | ) | — | |
Foreign currency (loss) gain | (13 | ) | — | | 14 | | — | | 1 | |
Net income | 140 | | 94 | | 43 | | (137 | ) | 140 | |
Loss on extinguishment of debt | (57 | ) | — | | — | | — | | (57 | ) |
Less net income attributable to the noncontrolling interest | (10 | ) | — | | (10 | ) | 10 | | (10 | ) |
Intercompany interest (expense) income | (16 | ) | 51 | | (35 | ) | — | | — | |
Net income attributable to QVC, Inc. stockholder | $ | 130 | | 94 | | 33 | | (127 | ) | 130 | |
| (288 | ) | 51 | | (22 | ) | — | | (259 | ) |
|
Condensed consolidating statements of operations - Adjusted | Income before income taxes | 334 | | 418 | | 234 | | — | | 986 | |
|
| | | | | | | | | | | | Income tax expense | (119 | ) | (132 | ) | (102 | ) | — | | (353 | ) |
Three months ended June 30, 2013 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | | Equity in earnings of subsidiaries, net of tax | 418 | | 67 | | — | | (485 | ) | — | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
QVC, Inc. | guarantors | subsidiaries | subsidiaries | Net income | 633 | | 353 | | 132 | | (485 | ) | 633 | |
Net revenue | $ | 1,326 | | 182 | | 681 | | (228 | ) | 1,961 | |
Less net income attributable to the noncontrolling interest | (45 | ) | — | | (45 | ) | 45 | | (45 | ) |
Cost of goods sold | 836 | | 23 | | 427 | | (59 | ) | 1,227 | |
Net income attributable to QVC, Inc. shareholder | $ | 588 | | 353 | | 87 | | (440 | ) | 588 | |
Gross profit | 490 | | 159 | | 254 | | (169 | ) | 734 | |
Consolidating statements of operations - Adjusted |
Operating expenses: | | | | | | |
| | | | | | | | | | | |
Operating | 38 | | 48 | | 85 | | — | | 171 | | Year ended December 31, 2012 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
Selling, general and administrative, including stock-based compensation | 227 | | — | | 80 | | (169 | ) | 138 | | issuer- | subsidiary | non-guarantor | QVC, Inc. and |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Depreciation | 9 | | 2 | | 22 | | — | | 33 | | Net revenue | $ | 5,653 | | 819 | | 3,078 | | (1,034 | ) | 8,516 | |
|
Amortization | 51 | | 36 | | 20 | | — | | 107 | | Cost of goods sold | 3,644 | | 116 | | 1,941 | | (282 | ) | 5,419 | |
|
Intercompany management expense (income) | 15 | | (4 | ) | (11 | ) | — | | — | | Gross profit | 2,009 | | 703 | | 1,137 | | (752 | ) | 3,097 | |
|
| 340 | | 82 | | 196 | | (169 | ) | 449 | | Operating expenses: | | | | | |
|
Operating income | 150 | | 77 | | 58 | | — | | 285 | | Operating | 140 | | 206 | | 369 | | — | | 715 | |
|
Other (expense) income: | | | | | | Selling, general and administrative, including stock-based compensation | 1,002 | | 1 | | 337 | | (752 | ) | 588 | |
|
Equity in losses of investee | — | | — | | (2 | ) | — | | (2 | ) | Depreciation | 35 | | 4 | | 87 | | — | | 126 | |
|
Gains on financial instruments | — | | — | | 3 | | — | | 3 | | Amortization of intangible assets | 204 | | 130 | | 66 | | — | | 400 | |
|
Interest (expense) income, net | (50 | ) | (1 | ) | 1 | | — | | (50 | ) | Intercompany management expense (income) | 60 | | (14 | ) | (46 | ) | — | | — | |
|
Foreign currency (loss) gain | (1 | ) | — | | 1 | | — | | — | | | 1,441 | | 327 | | 813 | | (752 | ) | 1,829 | |
|
Loss on extinguishment of debt | (16 | ) | — | | — | | — | | (16 | ) | Operating income | 568 | | 376 | | 324 | | — | | 1,268 | |
|
Intercompany interest and other (expense) income | (4 | ) | 12 | | (8 | ) | — | | — | | Other (expense) income: | | | | | |
|
| (71 | ) | 11 | | (5 | ) | — | | (65 | ) | Equity in losses of investee | — | | — | | (4 | ) | — | | (4 | ) |
|
Income before income taxes | 79 | | 88 | | 53 | | — | | 220 | | Gains on financial instruments | 48 | | — | | — | | — | | 48 | |
|
Income tax expense | (21 | ) | (32 | ) | (28 | ) | — | | (81 | ) | Interest expense, net | (233 | ) | — | | — | | — | | (233 | ) |
|
Equity in earnings of subsidiaries, net of tax | 81 | | 11 | | — | | (92 | ) | — | | Foreign currency (loss) gain | (10 | ) | 4 | | 8 | | — | | 2 | |
|
Net income | 139 | | 67 | | 25 | | (92 | ) | 139 | | Intercompany interest (expense) income | (13 | ) | 51 | | (38 | ) | — | | — | |
|
Less net income attributable to the noncontrolling interest | (13 | ) | — | | (13 | ) | 13 | | (13 | ) | | (208 | ) | 55 | | (34 | ) | — | | (187 | ) |
|
Net income attributable to QVC, Inc. stockholder | $ | 126 | | 67 | | 12 | | (79 | ) | 126 | | Income before income taxes | 360 | | 431 | | 290 | | — | | 1,081 | |
|
| Income tax expense | (116 | ) | (141 | ) | (137 | ) | — | | (394 | ) |
Condensed consolidating statements of operations |
| Equity in earnings of subsidiaries, net of tax | 443 | | 93 | | — | | (536 | ) | — | |
| | | | | | | | | | | |
Six months ended June 30, 2014 | | Net income | 687 | | 383 | | 153 | | (536 | ) | 687 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | Less net income attributable to the noncontrolling interest | (63 | ) | — | | (63 | ) | 63 | | (63 | ) |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net revenue | $ | 2,692 | | 364 | | 1,399 | | (455 | ) | 4,000 | | Net income attributable to QVC, Inc. shareholder | $ | 624 | | 383 | | 90 | | (473 | ) | 624 | |
|
Cost of goods sold | 1,692 | | 48 | | 878 | | (112 | ) | 2,506 | | Consolidating statements of operations - Adjusted |
|
Gross profit | 1,000 | | 316 | | 521 | | (343 | ) | 1,494 | | | | | | | | | | | | | |
Year ended December 31, 2011 | |
Operating expenses: | | | | | | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
Operating | 82 | | 95 | | 181 | | — | | 358 | | QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net revenue | $ | 5,485 | | 790 | | 2,988 | | (995 | ) | 8,268 | |
Selling, general and administrative, including stock-based compensation | 466 | | (1 | ) | 181 | | (343 | ) | 303 | |
Cost of goods sold | 3,507 | | 120 | | 1,906 | | (255 | ) | 5,278 | |
Depreciation | 19 | | 3 | | 44 | | — | | 66 | |
Gross profit | 1,978 | | 670 | | 1,082 | | (740 | ) | 2,990 | |
Amortization | 110 | | 77 | | 36 | | — | | 223 | |
Operating expenses: | | | | | |
Intercompany management expense (income) | 40 | | (8 | ) | (32 | ) | — | | — | |
Operating | 166 | | 201 | | 377 | | — | | 744 | |
| 717 | | 166 | | 410 | | (343 | ) | 950 | |
Selling, general and administrative, including stock-based compensation | 947 | | — | | 328 | | (740 | ) | 535 | |
Operating income | 283 | | 150 | | 111 | | — | | 544 | |
Depreciation | 36 | | 4 | | 95 | | — | | 135 | |
Other (expense) income: | | | | | |
Amortization of intangible assets | 242 | | 133 | | 64 | | — | | 439 | |
Equity in losses of investee | — | | — | | (3 | ) | — | | (3 | ) |
Intercompany management expense (income) | 89 | | (27 | ) | (62 | ) | — | | — | |
Interest expense, net | (113 | ) | — | | (9 | ) | — | | (122 | ) |
| 1,480 | | 311 | | 802 | | (740 | ) | 1,853 | |
Foreign currency (loss) gain | (3 | ) | — | | 3 | | — | | — | |
Operating income | 498 | | 359 | | 280 | | — | | 1,137 | |
Intercompany interest and other (expense) income | (10 | ) | 26 | | 4 | | (20 | ) | — | |
Other (expense) income: | | | | | |
| (126 | ) | 26 | | (5 | ) | (20 | ) | (125 | ) |
Equity in losses of investee | — | | — | | (2 | ) | — | | (2 | ) |
Income before income taxes | 157 | | 176 | | 106 | | (20 | ) | 419 | |
Gains on financial instruments | 50 | | — | | — | | — | | 50 | |
Income tax expense | (7 | ) | (52 | ) | (98 | ) | — | | (157 | ) |
Interest (expense) income | (230 | ) | — | | 1 | | — | | (229 | ) |
Equity in earnings (losses) of subsidiaries, net of tax | 112 | | (19 | ) | — | | (93 | ) | — | |
Foreign currency (loss) gain | (3 | ) | (2 | ) | 3 | | — | | (2 | ) |
Net income | 262 | | 105 | | 8 | | (113 | ) | 262 | |
Intercompany interest (expense) income | (9 | ) | 53 | | (44 | ) | — | | — | |
Less net income attributable to the noncontrolling interest | (19 | ) | — | | (19 | ) | 19 | | (19 | ) |
| (192 | ) | 51 | | (42 | ) | — | | (183 | ) |
Net income (loss) attributable to QVC, Inc. stockholder | $ | 243 | | 105 | | (11 | ) | (94 | ) | 243 | |
Income before income taxes | 306 | | 410 | | 238 | | — | | 954 | |
The increase in tax expense of the combined non-guarantor subsidiaries compared to the same period in the prior year was primarily due to an unfavorable tax audit settlement in one of our European subsidiaries. This also resulted in a tax benefit for QVC, Inc. as a result of the corresponding foreign tax credit in the U.S. |
| Income tax expense | (110 | ) | (124 | ) | (108 | ) | — | | (342 | ) |
Condensed consolidating statements of operations - Adjusted |
| Equity in earnings of subsidiaries, net of tax | 416 | | 70 | | — | | (486 | ) | — | |
| | | | | | | | | | | |
Six months ended June 30, 2013 | | Net income | 612 | | 356 | | 130 | | (486 | ) | 612 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | Less net income attributable to the noncontrolling interest | (52 | ) | — | | (52 | ) | 52 | | (52 | ) |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net revenue | $ | 2,640 | | 365 | | 1,389 | | (459 | ) | 3,935 | | Net income attributable to QVC, Inc. shareholder | $ | 560 | | 356 | | 78 | | (434 | ) | 560 | |
|
Cost of goods sold | 1,679 | | 49 | | 871 | | (120 | ) | 2,479 | | Consolidating statements of comprehensive income |
|
Gross profit | 961 | | 316 | | 518 | | (339 | ) | 1,456 | | | | | | | | | | | | | |
Year ended December 31, 2013 | |
Operating expenses: | | | | | | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
Operating | 75 | | 93 | | 176 | | — | | 344 | | QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net income | $ | 633 | | 353 | | 132 | | (485 | ) | 633 | |
Selling, general and administrative, including stock-based compensation | 463 | | — | | 169 | | (339 | ) | 293 | |
Foreign currency translation adjustments | (72 | ) | — | | (72 | ) | 72 | | (72 | ) |
Depreciation | 19 | | 3 | | 41 | | — | | 63 | |
Total comprehensive income | 561 | | 353 | | 60 | | (413 | ) | 561 | |
Amortization | 102 | | 70 | | 39 | | — | | 211 | |
Comprehensive income attributable to noncontrolling interest | (20 | ) | — | | (20 | ) | 20 | | (20 | ) |
Intercompany management expense (income) | 32 | | (7 | ) | (25 | ) | — | | — | |
Comprehensive income attributable to QVC, Inc. shareholder | $ | 541 | | 353 | | 40 | | (393 | ) | 541 | |
| 691 | | 159 | | 400 | | (339 | ) | 911 | |
Consolidating statements of comprehensive income - Adjusted |
Operating income | 270 | | 157 | | 118 | | — | | 545 | | |
| | | | | | | | | | | |
Other (expense) income: | | | | | | Year ended December 31, 2012 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
Equity in losses of investee | — | | — | | (1 | ) | — | | (1 | ) | issuer- | subsidiary | non-guarantor | QVC, Inc. and |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Gains on financial instruments | 12 | | — | | 3 | | — | | 15 | | Net income | $ | 687 | | 383 | | 153 | | (536 | ) | 687 | |
|
Interest expense, net | (112 | ) | (1 | ) | — | | — | | (113 | ) | Foreign currency translation adjustments | (27 | ) | — | | (27 | ) | 27 | | (27 | ) |
|
Foreign currency (loss) gain | (2 | ) | (1 | ) | 2 | | — | | (1 | ) | Total comprehensive income | 660 | | 383 | | 126 | | (509 | ) | 660 | |
|
Loss on extinguishment of debt | (57 | ) | — | | — | | — | | (57 | ) | Comprehensive income attributable to noncontrolling interest | (44 | ) | — | | (44 | ) | 44 | | (44 | ) |
|
Intercompany interest and other (expense) income | (7 | ) | 25 | | (18 | ) | — | | — | | Comprehensive income attributable to QVC, Inc. shareholder | $ | 616 | | 383 | | 82 | | (465 | ) | 616 | |
|
| (166 | ) | 23 | | (14 | ) | — | | (157 | ) | Consolidating statements of comprehensive income - Adjusted |
|
Income before income taxes | 104 | | 180 | | 104 | | — | | 388 | | | | | | | | | | | | | |
Year ended December 31, 2011 | |
Income tax expense | (32 | ) | (60 | ) | (51 | ) | — | | (143 | ) | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
Equity in earnings of subsidiaries, net of tax | 173 | | 26 | | — | | (199 | ) | — | | QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net income | 612 | | 356 | | 130 | | (486 | ) | 612 | |
Net income | 245 | | 146 | | 53 | | (199 | ) | 245 | |
Foreign currency translation adjustments | (10 | ) | — | | (10 | ) | 10 | | (10 | ) |
Less net income attributable to the noncontrolling interest | (25 | ) | — | | (25 | ) | 25 | | (25 | ) |
Total comprehensive income | 602 | | 356 | | 120 | | (476 | ) | 602 | |
Net income attributable to QVC, Inc. stockholder | $ | 220 | | 146 | | 28 | | (174 | ) | 220 | |
Comprehensive income attributable to noncontrolling interest | (57 | ) | — | | (57 | ) | 57 | | (57 | ) |
|
Condensed consolidating statements of comprehensive income | Comprehensive income attributable to QVC, Inc. shareholder | $ | 545 | | 356 | | 63 | | (419 | ) | 545 | |
|
| | | | | | | | | | | | |
Three months ended June 30, 2014 | | |
(in millions) | Subsidiary | | Combined | | Combined | | Eliminations | | Consolidated- | | Consolidating statements of cash flows |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | |
QVC, Inc. | guarantors | subsidiaries | subsidiaries | | | | | | | | | | | | |
Net income | $ | 140 | | 94 | | 43 | | (137 | ) | 140 | | Year ended December 31, 2013 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
Foreign currency translation adjustments | 2 | | — | | 2 | | (2 | ) | 2 | | issuer- | subsidiary | non-guarantor | QVC, Inc. and |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Total comprehensive income | 142 | | 94 | | 45 | | (139 | ) | 142 | | Operating activities: | | | | | | | | | | |
|
Comprehensive income attributable to noncontrolling interest | (10 | ) | — | | (10 | ) | 10 | | (10 | ) | Net cash provided by operating activities | $ | 379 | | 389 | | 205 | | — | | 973 | |
|
Comprehensive income attributable to QVC, Inc. stockholder | $ | 132 | | 94 | | 35 | | (129 | ) | 132 | | Investing activities: | | | | | | | | | | |
|
| Capital expenditures, net | (106 | ) | (8 | ) | (97 | ) | — | | (211 | ) |
Condensed consolidating statements of comprehensive income - Adjusted |
| Expenditures for cable and satellite television distribution rights, net | — | | (56 | ) | (2 | ) | — | | (58 | ) |
| | | | | | | | | | | |
Three months ended June 30, 2013 | | Decrease (increase) in restricted cash | 2 | | — | | (1 | ) | — | | 1 | |
(in millions) | Subsidiary | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | Changes in other noncurrent assets | (1 | ) | — | | (1 | ) | — | | (2 | ) |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net income | $ | 139 | | 67 | | 25 | | (92 | ) | 139 | | Intercompany investing activities | 368 | | 277 | | — | | (645 | ) | — | |
|
Foreign currency translation adjustments | (16 | ) | — | | (16 | ) | 16 | | (16 | ) | Net cash provided by (used in) investing activities | 263 | | 213 | | (101 | ) | (645 | ) | (270 | ) |
|
Total comprehensive income | 123 | | 67 | | 9 | | (76 | ) | 123 | | Financing activities: | | | | | | | | | | |
|
Comprehensive income attributable to noncontrolling interest | (7 | ) | — | | (7 | ) | 7 | | (7 | ) | Principal payments of debt and capital lease obligations | (2,375 | ) | — | | (12 | ) | — | | (2,387 | ) |
|
Comprehensive income attributable to QVC, Inc. stockholder | $ | 116 | | 67 | | 2 | | (69 | ) | 116 | | Principal borrowings of debt from senior secured credit facility | 1,674 | | — | | — | | — | | 1,674 | |
|
| Proceeds from issuance of senior secured notes, net of original issue discount | 1,050 | | — | | — | | — | | 1,050 | |
Condensed consolidating statements of comprehensive income |
| Payment of debt origination fees | (16 | ) | — | | — | | — | | (16 | ) |
| | | | | | | | | | | |
Six months ended June 30, 2014 | | Payment of bond premium fees | (46 | ) | — | | — | | — | | (46 | ) |
(in millions) | Subsidiary | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | Other financing activities | 12 | | — | | — | | — | | 12 | |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net income | $ | 262 | | 105 | | 8 | | (113 | ) | 262 | | Dividends paid to Liberty | (1,005 | ) | — | | — | | — | | (1,005 | ) |
|
Foreign currency translation adjustments | 18 | | — | | 18 | | (18 | ) | 18 | | Dividends paid to noncontrolling interest | — | | — | | (45 | ) | — | | (45 | ) |
|
Total comprehensive income | 280 | | 105 | | 26 | | (131 | ) | 280 | | Net short-term intercompany debt borrowings (repayments) | 190 | | (63 | ) | (127 | ) | — | | — | |
|
Comprehensive income attributable to noncontrolling interest | (22 | ) | — | | (22 | ) | 22 | | (22 | ) | Intercompany financing activities | (123 | ) | (571 | ) | 49 | | 645 | | — | |
|
Comprehensive income attributable to QVC, Inc. stockholder | $ | 258 | | 105 | | 4 | | (109 | ) | 258 | | Net cash used in financing activities | (639 | ) | (634 | ) | (135 | ) | 645 | | (763 | ) |
|
| Effect of foreign exchange rate changes on cash and cash equivalents | — | | — | | (23 | ) | — | | (23 | ) |
Condensed consolidating statements of comprehensive income - Adjusted |
| Net increase (decrease) in cash and cash equivalents | 3 | | (32 | ) | (54 | ) | — | | (83 | ) |
| | | | | | | | | | | |
Six months ended June 30, 2013 | | Cash and cash equivalents, beginning of period | 75 | | 165 | | 300 | | — | | 540 | |
(in millions) | Subsidiary | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | Cash and cash equivalents, end of period | $ | 78 | | 133 | | 246 | | — | | 457 | |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Net income | $ | 245 | | 146 | | 53 | | (199 | ) | 245 | | Consolidating statements of cash flows - Adjusted |
|
Foreign currency translation adjustments | (107 | ) | — | | (107 | ) | 107 | | (107 | ) | | | | | | | | | | | | |
Year ended December 31, 2012 | |
Total comprehensive income (loss) | 138 | | 146 | | (54 | ) | (92 | ) | 138 | | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
Comprehensive income attributable to noncontrolling interest | (6 | ) | — | | (6 | ) | 6 | | (6 | ) | QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Operating activities: | | | | | |
Comprehensive income (loss) attributable to QVC, Inc. stockholder | $ | 132 | | 146 | | (60 | ) | (86 | ) | 132 | |
Net cash provided by operating activities | $ | 462 | | 412 | | 332 | | — | | 1,206 | |
|
| Investing activities: | | | | | |
Condensed consolidating statements of cash flows |
| Capital expenditures, net | (76 | ) | (5 | ) | (165 | ) | — | | (246 | ) |
| | | | | | | | | | | |
Six months ended June 30, 2014 | | Expenditures for cable and satellite television distribution rights, net | — | | (1 | ) | (1 | ) | — | | (2 | ) |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and | Cash paid for joint ventures and acquisitions of businesses, net of cash received | — | | — | | (95 | ) | — | | (95 | ) |
QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Operating activities: | | | | | | | | | | | Decrease in restricted cash | 2 | | — | | — | | — | | 2 | |
|
Net cash provided by operating activities | $ | 217 | | 172 | | 160 | | — | | 549 | | Changes in other noncurrent assets | (3 | ) | — | | — | | — | | (3 | ) |
|
Investing activities: | | | | | | | | | | | Intercompany investing activities | 443 | | 265 | | — | | (708 | ) | — | |
|
Capital expenditures, net | (74 | ) | (1 | ) | 38 | | (20 | ) | (57 | ) | Net cash provided by (used in) investing activities | 366 | | 259 | | (261 | ) | (708 | ) | (344 | ) |
|
Expenditures for cable and satellite television distribution rights, net | — | | (8 | ) | — | | — | | (8 | ) | Financing activities: | | | | | | | | | | |
|
Intercompany investing activities | 114 | | 27 | | — | | (141 | ) | — | | Principal payments of debt and capital lease obligations | (1,237 | ) | — | | (9 | ) | — | | (1,246 | ) |
|
Net cash provided by (used in) investing activities | 40 | | 18 | | 38 | | (161 | ) | (65 | ) | Principal borrowings of debt from senior secured credit facility | 1,717 | | — | | — | | — | | 1,717 | |
|
Financing activities: | | | | | | | | | | | Proceeds from issuance of senior secured notes | 500 | | — | | — | | — | | 500 | |
|
Principal payments of debt and capital lease obligations | (1,414 | ) | — | | (5 | ) | — | | (1,419 | ) | Payment of debt origination fees | (7 | ) | — | | — | | — | | (7 | ) |
|
Principal borrowings of debt from senior secured credit facility | 554 | | — | | — | | — | | 554 | | Other financing activities | 20 | | — | | — | | — | | 20 | |
|
Proceeds from issuance of senior secured notes, net of original issue discount | 999 | | — | | — | | — | | 999 | | Dividends paid to Liberty | (1,817 | ) | — | | — | | — | | (1,817 | ) |
|
Payment of debt origination fees | (12 | ) | — | | — | | — | | (12 | ) | Dividend paid to noncontrolling interest | — | | — | | (29 | ) | — | | (29 | ) |
|
Other financing activities | (4 | ) | — | | — | | — | | (4 | ) | Net short-term intercompany debt borrowings (repayments) | 214 | | (59 | ) | (155 | ) | — | | — | |
|
Dividends paid to Liberty | (480 | ) | — | | — | | — | | (480 | ) | Intercompany financing activities | (146 | ) | (670 | ) | 108 | | 708 | | — | |
|
Dividends paid to noncontrolling interest | — | | — | | (25 | ) | — | | (25 | ) | Net cash used in financing activities | (756 | ) | (729 | ) | (85 | ) | 708 | | (862 | ) |
|
Net short-term intercompany debt borrowings (repayments) | 65 | | 65 | | (130 | ) | — | | — | | Effect of foreign exchange rate changes on cash and cash equivalents | — | | — | | (20 | ) | — | | (20 | ) |
|
Intercompany financing activities | (25 | ) | (226 | ) | 90 | | 161 | | — | | Net increase (decrease) in cash and cash equivalents | 72 | | (58 | ) | (34 | ) | — | | (20 | ) |
|
Net cash used in financing activities | (317 | ) | (161 | ) | (70 | ) | 161 | | (387 | ) | Cash and cash equivalents, beginning of period | 3 | | 223 | | 334 | | — | | 560 | |
|
Effect of foreign exchange rate changes on cash and cash equivalents | — | | — | | (6 | ) | — | | (6 | ) | Cash and cash equivalents, end of period | $ | 75 | | 165 | | 300 | | — | | 540 | |
|
Net (decrease) increase in cash and cash equivalents | (60 | ) | 29 | | 122 | | — | | 91 | | Consolidating statements of cash flows - Adjusted |
|
Cash and cash equivalents, beginning of period | 78 | | 133 | | 246 | | — | | 457 | | | | | | | | | | | | | |
Year ended December 31, 2011 | |
Cash and cash equivalents, end of period | $ | 18 | | 162 | | 368 | | — | | 548 | | (in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
| QVC, Inc. | guarantors | subsidiaries | subsidiaries |
Condensed consolidating statements of cash flows - Adjusted | Operating activities: | | | | | |
|
| | | | | | | | | | | | Net cash provided by operating activities | $ | 225 | | 380 | | 213 | | — | | 818 | |
Six months ended June 30, 2013 | |
(in millions) | Parent | | Combined | | Combined | | Eliminations | | Consolidated- | | Investing activities: | | | | | |
issuer- | subsidiary | non-guarantor | QVC, Inc. and |
QVC, Inc. | guarantors | subsidiaries | subsidiaries | Capital expenditures, net | (83 | ) | (8 | ) | (168 | ) | — | | (259 | ) |
Operating activities: | | | | | |
Expenditures for cable and satellite television distribution rights, net | — | | (2 | ) | — | | — | | (2 | ) |
Net cash provided by operating activities | $ | 275 | | 115 | | 52 | | — | | 442 | |
Decrease in restricted cash | 1 | | — | | — | | — | | 1 | |
Investing activities: | | | | | |
Changes in other noncurrent assets and liabilities | 5 | | — | | (1 | ) | — | | 4 | |
Capital expenditures, net | (33 | ) | — | | (42 | ) | — | | (75 | ) |
Intercompany investing activities | 348 | | 190 | | — | | (538 | ) | — | |
Expenditures for cable and satellite television distribution rights, net | — | | (25 | ) | (1 | ) | — | | (26 | ) |
Net cash provided by (used in) investing activities | 271 | | 180 | | (169 | ) | (538 | ) | (256 | ) |
Changes in other noncurrent assets | 4 | | — | | (3 | ) | — | | 1 | |
Financing activities: | | | | | | | | | | |
Intercompany investing activities | 258 | | 149 | | — | | (407 | ) | — | |
Principal payments of debt and capital lease obligations | (825 | ) | — | | (12 | ) | — | | (837 | ) |
Net cash provided by (used in) investing activities | 229 | | 124 | | (46 | ) | (407 | ) | (100 | ) |
Principal borrowings of debt from senior secured credit facility | 465 | | — | | — | | — | | 465 | |
Financing activities: | | | | | | | | | | |
Dividends paid to Liberty | (205 | ) | — | | — | | — | | (205 | ) |
Principal payments of debt and capital lease obligations | (1,690 | ) | — | | (5 | ) | — | | (1,695 | ) |
Dividends paid to noncontrolling interest | — | | — | | (50 | ) | — | | (50 | ) |
Principal borrowings of debt from senior secured credit facility | 1,053 | | — | | — | | — | | 1,053 | |
Net short-term intercompany debt borrowings (repayments) | 104 | | 2 | | (106 | ) | — | | — | |
Proceeds from issuance of senior secured notes, net of original issue discount | 1,050 | | — | | — | | — | | 1,050 | |
Intercompany financing activities | (76 | ) | (499 | ) | 37 | | 538 | | — | |
Payment of debt origination fees | (16 | ) | — | | — | | — | | (16 | ) |
Net cash used in financing activities | (537 | ) | (497 | ) | (131 | ) | 538 | | (627 | ) |
Payment of bond premium fees | (46 | ) | — | | — | | — | | (46 | ) |
Effect of foreign exchange rate changes on cash and cash equivalents | — | | — | | 4 | | — | | 4 | |
Other financing activities | 7 | | — | | — | | — | | 7 | |
Net (decrease) increase in cash and cash equivalents | (41 | ) | 63 | | (83 | ) | — | | (61 | ) |
Dividends paid to Liberty | (765 | ) | — | | — | | — | | (765 | ) |
Cash and cash equivalents, beginning of period | 44 | | 160 | | 417 | | — | | 621 | |
Dividends paid to noncontrolling interest | — | | — | | (25 | ) | — | | (25 | ) |
Cash and cash equivalents, end of period | $ | 3 | | 223 | | 334 | | — | | 560 | |
Net short-term intercompany debt (repayments) borrowings | (21 | ) | 86 | | (65 | ) | — | | — | |
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Intercompany financing activities | (143 | ) | (326 | ) | 62 | | 407 | | — | | |
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Net cash used in financing activities | (571 | ) | (240 | ) | (33 | ) | 407 | | (437 | ) | |
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Effect of foreign exchange rate changes on cash and cash equivalents | — | | — | | (29 | ) | — | | (29 | ) | |
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Net decrease in cash and cash equivalents | (67 | ) | (1 | ) | (56 | ) | — | | (124 | ) | |
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Cash and cash equivalents, beginning of period | 75 | | 165 | | 300 | | — | | 540 | | |
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Cash and cash equivalents, end of period | $ | 8 | | 164 | | 244 | | — | | 416 | | |
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