Quarterly report pursuant to Section 13 or 15(d)

Guarantor/Non-Guarantor Subsidiary Financial Information (Tables)

v3.5.0.2
Guarantor/Non-Guarantor Subsidiary Financial Information (Tables)
6 Months Ended
Jun. 30, 2016
Guarantor Non-guarantor Subsidiary Financial Information [Abstract]  
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Current Period
Condensed Consolidating Balance Sheets
June 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Assets
Current assets:





Cash and cash equivalents
$
3

137

195


335

Restricted cash
9


2


11

Accounts receivable, net
620


229


849

Inventories
778


244


1,022

Prepaid expenses
26


36


62

Total current assets
1,436

137

706


2,279

Property and equipment, net
313

66

716


1,095

Cable and satellite television distribution rights, net

219

30


249

Goodwill
4,190


876


5,066

Other intangible assets, net
763

2,050

33


2,846

Other noncurrent assets
6


77


83

Investments in subsidiaries
3,532

1,060


(4,592
)

Total assets
$
10,240

3,532

2,438

(4,592
)
11,618

Liabilities and equity
Current liabilities:





Current portion of debt and capital lease obligations
$
3


7


10

Accounts payable-trade
348


196


544

Accrued liabilities
1

197

464


662

Intercompany accounts payable (receivable)
472

(202
)
(270
)


Total current liabilities
824

(5
)
397


1,216

Long-term portion of debt and capital lease obligations
5,210


48


5,258

Deferred compensation
12


(1
)

11

Deferred income taxes
101

727

(47
)

781

Other long-term liabilities
100


145


245

Total liabilities
6,247

722

542


7,511

Equity:





QVC, Inc. stockholder's equity
3,993

2,810

1,782

(4,592
)
3,993

Noncontrolling interest


114


114

Total equity
3,993

2,810

1,896

(4,592
)
4,107

Total liabilities and equity
$
10,240

3,532

2,438

(4,592
)
11,618

Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Prior Period
Condensed Consolidating Balance Sheets
December 31, 2015
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Assets
Current assets:





Cash and cash equivalents
$

112

215


327

Restricted cash
9


2


11

Accounts receivable, net
1,114


256


1,370

Inventories
714


215


929

Prepaid expenses
18


24


42

Total current assets
1,855

112

712


2,679

Property and equipment, net
295

67

640


1,002

Cable and satellite television distribution rights, net

297

42


339

Goodwill
4,190


845


5,035

Other intangible assets, net
842

2,050

44


2,936

Other noncurrent assets
5


62


67

Investments in subsidiaries
3,569

2,687


(6,256
)

Total assets
$
10,756

5,213

2,345

(6,256
)
12,058

Liabilities and equity
Current liabilities:





Current portion of debt and capital lease obligations
$
3


6


9

Accounts payable-trade
396


262


658

Accrued liabilities
229

207

436


872

Intercompany accounts payable (receivable)
562

1,271

(1,833
)


Total current liabilities
1,190

1,478

(1,129
)

1,539

Long-term portion of debt and capital lease obligations
5,342


51


5,393

Deferred compensation
14


(1
)

13

Deferred income taxes
94

744

(11
)

827

Other long-term liabilities
98


70


168

Total liabilities
6,738

2,222

(1,020
)

7,940

Equity:





QVC, Inc. stockholder's equity
4,018

2,991

3,265

(6,256
)
4,018

Noncontrolling interest


100


100

Total equity
4,018

2,991

3,365

(6,256
)
4,118

Total liabilities and equity
$
10,756

5,213

2,345

(6,256
)
12,058

Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Current Period
Six months ended June 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
2,903

464

1,347

(638
)
4,076

Cost of goods sold
1,747

78

829

(89
)
2,565

Gross profit
1,156

386

518

(549
)
1,511

Operating expenses:





Operating
202

119

140

(173
)
288

Selling, general and administrative, including stock-based compensation
527


210

(376
)
361

Depreciation
25

4

36


65

Amortization
120

84

25


229

 
874

207

411

(549
)
943

Operating income
282

179

107


568

Other (expense) income:
 
 
 
 
 
Equity in losses of investee


(2
)

(2
)
Interest expense, net
(107
)



(107
)
Foreign currency gain
9


13


22

Intercompany interest (expense) income
(1
)
1





(99
)
1

11


(87
)
Income before income taxes
183

180

118


481

Income tax expense
(70
)
(59
)
(57
)

(186
)
Equity in earnings of subsidiaries, net of tax
182

82


(264
)

Net income
295

203

61

(264
)
295

Less net income attributable to the noncontrolling interest
(19
)

(19
)
19

(19
)
Net income attributable to QVC, Inc. stockholder
$
276

203

42

(245
)
276

Condensed Consolidating Statements of Operations
Three months ended June 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
1,459

231

682

(309
)
2,063

Cost of goods sold
871

36

420

(42
)
1,285

Gross profit
588

195

262

(267
)
778

Operating expenses:





Operating
93

60

68

(75
)
146

Selling, general and administrative, including stock-based compensation
264


107

(192
)
179

Depreciation
13

2

16


31

Amortization
60

44

11


115


430

106

202

(267
)
471

Operating income
158

89

60


307

Other (expense) income:





Equity in losses of investee


(1
)

(1
)
Interest expense, net
(54
)



(54
)
Foreign currency gain
6


14


20

Intercompany interest (expense) income
(1
)

1




(49
)

14


(35
)
Income before income taxes
109

89

74


272

Income tax expense
(42
)
(33
)
(31
)

(106
)
Equity in earnings of subsidiaries, net of tax
99

50


(149
)

Net income
166

106

43

(149
)
166

Less net income attributable to the noncontrolling interest
(11
)

(11
)
11

(11
)
Net income attributable to QVC, Inc. stockholder
$
155

106

32

(138
)
155

Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Prior Period
Six months ended June 30, 2015
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
2,812

422

1,297

(595
)
3,936

Cost of goods sold
1,715

48

768

(76
)
2,455

Gross profit
1,097

374

529

(519
)
1,481

Operating expenses:





Operating
172

118

142

(152
)
280

Selling, general and administrative, including stock-based compensation
532


195

(367
)
360

Depreciation
21

4

43


68

Amortization
119

81

33


233


844

203

413

(519
)
941

Operating income
253

171

116


540

Other (expense) income:





Equity in losses of investee


(4
)

(4
)
Interest expense, net
(107
)

(2
)

(109
)
Foreign currency gain (loss)
8

(13
)
4


(1
)
Loss on extinguishment of debt
(21
)



(21
)
Intercompany interest (expense) income
(6
)
(9
)
15




(126
)
(22
)
13


(135
)
Income before income taxes
127

149

129


405

Income tax expense
(40
)
(63
)
(54
)

(157
)
Equity in earnings of subsidiaries, net of tax
161

39

47

(247
)

Net income
248

125

122

(247
)
248

Less net income attributable to the noncontrolling interest
(17
)

(17
)
17

(17
)
Net income attributable to QVC, Inc. stockholder
$
231

125

105

(230
)
231

Condensed Consolidating Statements of Operations
Three months ended June 30, 2015
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
1,432

220

640

(294
)
1,998

Cost of goods sold
856

23

382

(27
)
1,234

Gross profit
576

197

258

(267
)
764

Operating expenses:
 
 
 
 
 
Operating
84

61

71

(73
)
143

Selling, general and administrative, including stock-based compensation
275


98

(194
)
179

Depreciation
11

1

23


35

Amortization
60

41

12


113


430

103

204

(267
)
470

Operating income
146

94

54


294

Other (expense) income:
 
 
 
 
 
Equity in losses of investee


(3
)

(3
)
Interest expense, net
(49
)

(1
)

(50
)
Foreign currency (loss) gain
(6
)
(13
)
8


(11
)
Loss on extinguishment of debt
(21
)



(21
)
Intercompany interest (expense) income

(20
)
20




(76
)
(33
)
24


(85
)
Income before income taxes
70

61

78


209

Income tax expense
(14
)
(38
)
(33
)

(85
)
Equity in earnings of subsidiaries, net of tax
68

28

47

(143
)

Net income
124

51

92

(143
)
124

Less net income attributable to the noncontrolling interest
(8
)

(8
)
8

(8
)
Net income attributable to QVC, Inc. stockholder
$
116

51

84

(135
)
116

Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss)
Six months ended June 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
295

203

61

(264
)
295

Foreign currency translation adjustments
39


39

(39
)
39

Total comprehensive income
334

203

100

(303
)
334

Comprehensive income attributable to noncontrolling interest
(35
)

(35
)
35

(35
)
Comprehensive income attributable to QVC, Inc. stockholder
$
299

203

65

(268
)
299

Condensed Consolidating Statements of Comprehensive Income
Three months ended June 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
166

106

43

(149
)
166

Foreign currency translation adjustments
5


5

(5
)
5

Total comprehensive income
171

106

48

(154
)
171

Comprehensive income attributable to noncontrolling interest
(20
)

(20
)
20

(20
)
Comprehensive income attributable to QVC, Inc. stockholder
$
151

106

28

(134
)
151

Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Prior Period
Condensed Consolidating Statements of Comprehensive Income
Three months ended June 30, 2015
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
124

51

92

(143
)
124

Foreign currency translation adjustments
22


22

(22
)
22

Total comprehensive income
146

51

114

(165
)
146

Comprehensive income attributable to noncontrolling interest
(6
)

(6
)
6

(6
)
Comprehensive income attributable to QVC, Inc. stockholder
$
140

51

108

(159
)
140

Six months ended June 30, 2015
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
248

125

122

(247
)
248

Foreign currency translation adjustments
(80
)

(80
)
80

(80
)
Total comprehensive income
168

125

42

(167
)
168

Comprehensive income attributable to noncontrolling interest
(14
)

(14
)
14

(14
)
Comprehensive income attributable to QVC, Inc. stockholder
$
154

125

28

(153
)
154

Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Current Period
Condensed Consolidating Statements of Cash Flows
Six months ended June 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Operating activities:










Net cash provided by operating activities
$
422

182

(3
)

601

Investing activities:
 
 
 
 
 
Capital expenditures
(75
)
(3
)
(20
)

(98
)
Expenditures for cable and satellite television distribution rights, net

(6
)


(6
)
Changes in other noncurrent assets
1


(3
)

(2
)
Other investing activities
(6
)

8


2

Intercompany investing activities
316

127


(443
)

Net cash provided by (used in) investing activities
236

118

(15
)
(443
)
(104
)
Financing activities:
 
 
 
 
 
Principal payments of debt and capital lease obligations
(920
)

(3
)

(923
)
Principal borrowings of debt from senior secured credit facility
778




778

Payment of debt origination fees
(2
)



(2
)
Dividends paid to Liberty
(323
)



(323
)
Dividends paid to noncontrolling interest


(21
)

(21
)
Other financing activities
(2
)



(2
)
Net short-term intercompany debt (repayments) borrowings
(90
)
(1,473
)
1,563



Other intercompany financing activities
(96
)
1,198

(1,545
)
443


Net cash used in financing activities
(655
)
(275
)
(6
)
443

(493
)
Effect of foreign exchange rate changes on cash and cash equivalents


4


4

Net increase (decrease) in cash and cash equivalents
3

25

(20
)

8

Cash and cash equivalents, beginning of period

112

215


327

Cash and cash equivalents, end of period
$
3

137

195


335

Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Prior Period
Condensed Consolidating Statements of Cash Flows
Six months ended June 30, 2015
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Operating activities:
 
 
 
 
 
Net cash provided by operating activities
$
349

166

90


605

Investing activities:





Capital expenditures
(56
)
(5
)
(19
)

(80
)
Expenditures for cable and satellite television distribution rights, net

(45
)


(45
)
Other investing activities
1




1

Changes in other noncurrent assets
(1
)

(2
)

(3
)
Intercompany investing activities
1,147

296

(1,307
)
(136
)

Net cash provided by (used in) investing activities
1,091

246

(1,328
)
(136
)
(127
)
Financing activities:





Principal payments of debt and capital lease obligations
(1,212
)

(4
)

(1,216
)
Principal borrowings of debt from senior secured credit facility
1,098




1,098

Payment of debt origination fees
(3
)



(3
)
Payment of bond premium fees
(18
)



(18
)
Dividends paid to Liberty
(210
)



(210
)
Dividends paid to noncontrolling interest


(20
)

(20
)
Other financing activities
(1
)



(1
)
Net short-term intercompany debt (repayments) borrowings
(947
)
2,262

(1,315
)


Other intercompany financing activities
(97
)
(2,614
)
2,575

136


Net cash (used in) provided by financing activities
(1,390
)
(352
)
1,236

136

(370
)
Effect of foreign exchange rate changes on cash and cash equivalents


(10
)

(10
)
Net increase (decrease) in cash and cash equivalents
50

60

(12
)

98

Cash and cash equivalents, beginning of period
2

123

222


347

Cash and cash equivalents, end of period
$
52

183

210


445