Quarterly report pursuant to Section 13 or 15(d)

Lease and Transponder Service Agreements

v3.21.1
Lease and Transponder Service Agreements
 3 Months Ended
Mar. 31, 2021
Leases [Abstract]  
Leases of lessee disclosure Leases
The Company has finance lease agreements with transponder and transmitter network suppliers for the right to transmit its signals in the U.S. and Germany. The Company is also party to a finance lease agreement for data processing hardware and a warehouse.
QVC also leases data processing equipment, facilities, office space and land. These leases are classified as operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments using our incremental borrowing rate. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Our leases have remaining lease terms of less than 1 year to 14 years, some of which may include the option to extend or terminate the leases.
The components of lease cost for the three months ended March 31, 2021 and 2020, were as follows:
Three months ended March 31,
(in millions) 2021 2020
Finance lease cost
     Depreciation of leased assets $ 5  5 
     Interest on lease liabilities 2  2 
Total finance lease cost 7  7 
Operating lease cost 10  10 
     Total lease cost $ 17  17 
The remaining weighted-average lease term and the weighted-average discount rate were as follows:
March 31, 2021
Weighted-average remaining lease term (years):
     Finance leases 8.4
     Operating leases 10.9
Weighted-average discount rate:
     Finance leases 5.2  %
     Operating leases 6.0  %
Supplemental balance sheet information related to leases was as follows:
(in millions) March 31, 2021 December 31, 2020
Operating Leases:
  Operating lease right-of-use assets $ 215  221 
  Accrued liabilities $ 24  25 
  Other long-term liabilities 190  195 
      Total operating lease liabilities $ 214  220 
Finance Leases:
   Property and equipment $ 272  278 
   Accumulated depreciation (141) (141)
     Property and equipment, net $ 131  137 
   Current portion of debt and finance lease obligations $ 17  18 
   Long-term portion of debt and finance lease obligations 144  150 
     Total finance lease liabilities $ 161  168 
Supplemental cash flow information related to leases was as follows:
Three months ended March 31,
(in millions) 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows from operating leases $ 10  14 
     Operating cash flows from finance leases 2  2 
     Financing cash flows from finance leases 4  5 
Right-of-use assets obtained in exchange for lease obligations:
      Operating leases 1  3 
Future payments under noncancelable operating leases and finance leases with initial terms of one year or more as of March 31, 2021 consisted of the following:
(in millions) Finance leases Operating leases Total leases
Remainder of 2021 $ 18  27  45 
2022 26  33  59 
2023 25  27  52 
2024 23  24  47 
2025 21  21  42 
Thereafter 89  168  257 
Total lease payments 202  300  502 
Less: imputed interest (41) (86) (127)
Total lease liabilities $ 161  214  375