Quarterly report pursuant to Section 13 or 15(d)

Guarantor/Non-Guarantor Subsidiary Financial Information (Tables)

v3.8.0.1
Guarantor/Non-Guarantor Subsidiary Financial Information (Tables)
9 Months Ended
Sep. 30, 2017
Guarantor Non-guarantor Subsidiary Financial Information [Abstract]  
Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Current Period
Condensed Consolidating Balance Sheets
September 30, 2017
 
(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

50

290


343

Restricted cash
8


3


11

Accounts receivable, net
628


260


888

Inventories
868


296


1,164

Prepaid expenses and other current assets
26

1

28


55

Total current assets
1,533

51

877


2,461

Property and equipment, net
286

59

653


998

Television distribution rights, net

78



78

Goodwill
4,190


876


5,066

Other intangible assets, net
534

2,048

17


2,599

Other noncurrent assets
15


46


61

Investments in subsidiaries
3,190

64


(3,254
)

Total assets
$
9,748

2,300

2,469

(3,254
)
11,263

Liabilities and equity
Current liabilities:





Current portion of debt and capital lease obligations
$
3


14


17

Accounts payable-trade
458


268


726

Accrued liabilities
70

157

403


630

Intercompany accounts payable (receivable)
270

(1,434
)
1,164



Total current liabilities
801

(1,277
)
1,849


1,373

Long-term portion of debt and capital lease obligations
4,927


146


5,073

Deferred income taxes
73

718

(61
)

730

Other long-term liabilities
102


25


127

Total liabilities
5,903

(559
)
1,959


7,303

Equity:





QVC, Inc. stockholder's equity
3,845

2,859

395

(3,254
)
3,845

Noncontrolling interest


115


115

Total equity
3,845

2,859

510

(3,254
)
3,960

Total liabilities and equity
$
9,748

2,300

2,469

(3,254
)
11,263

Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Prior Period
Condensed Consolidating Balance Sheets
December 31, 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
$
2

97

185


284

Restricted cash
8


2


10

Accounts receivable, net
958


288


1,246

Inventories
726


224


950

Prepaid expenses and other current assets
22


24


46

Total current assets
1,716

97

723


2,536

Property and equipment, net
317

63

651


1,031

Television distribution rights, net

167

16


183

Goodwill
4,190


805


4,995

Other intangible assets, net
666

2,049

23


2,738

Other noncurrent assets
15


47


62

Investments in subsidiaries
3,389

1,030


(4,419
)

Total assets
$
10,293

3,406

2,265

(4,419
)
11,545

Liabilities and equity
Current liabilities:





Current portion of debt and capital lease obligations
$
3


11


14

Accounts payable-trade
425


253


678

Accrued liabilities
74

234

461


769

Intercompany accounts payable (receivable)
623

(246
)
(377
)


Total current liabilities
1,125

(12
)
348


1,461

Long-term portion of debt and capital lease obligations
5,132


143


5,275

Deferred income taxes
145

707

(74
)

778

Other long-term liabilities
96


40


136

Total liabilities
6,498

695

457


7,650

Equity:





QVC, Inc. stockholder's equity
3,795

2,711

1,708

(4,419
)
3,795

Noncontrolling interest


100


100

Total equity
3,795

2,711

1,808

(4,419
)
3,895

Total liabilities and equity
$
10,293

3,406

2,265

(4,419
)
11,545

Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Current Period
Condensed Consolidating Statements of Operations
Three months ended September 30, 2017
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
1,419

234

688

(331
)
2,010

Cost of goods sold
864

37

422

(41
)
1,282

Gross profit
555

197

266

(290
)
728

Operating expenses:





Operating
106

64

70

(95
)
145

Selling, general and administrative, including stock-based compensation
262


113

(195
)
180

Depreciation
17

2

19


38

Amortization
47

35

9


91


432

101

211

(290
)
454

Operating income
123

96

55


274

Other (expense) income:





Interest expense, net
(54
)



(54
)
Foreign currency (loss) gain
(1
)
1

4


4

Intercompany interest (expense) income
(1
)
23

(22
)



(56
)
24

(18
)

(50
)
Income before income taxes
67

120

37


224

Income tax expense
(13
)
(24
)
(21
)

(58
)
Equity in earnings of subsidiaries, net of tax
112

19


(131
)

Net income
166

115

16

(131
)
166

Less net income attributable to the noncontrolling interest
(12
)

(12
)
12

(12
)
Net income attributable to QVC, Inc. stockholder
$
154

115

4

(119
)
154

Nine months ended September 30, 2017
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
4,225

679

1,992

(942
)
5,954

Cost of goods sold
2,557

106

1,210

(118
)
3,755

Gross profit
1,668

573

782

(824
)
2,199

Operating expenses:





Operating
301

182

204

(268
)
419

Selling, general and administrative, including stock-based compensation
743


302

(556
)
489

Depreciation
50

6

60


116

Amortization
167

125

32


324

 
1,261

313

598

(824
)
1,348

Operating income
407

260

184


851

Other (expense) income:
 
 
 
 
 
Equity in losses of investee


(3
)

(3
)
Interest expense, net
(163
)

(2
)

(165
)
Foreign currency (loss) gain
(4
)
1

(3
)

(6
)
Intercompany interest (expense) income
(3
)
68

(65
)



(170
)
69

(73
)

(174
)
Income before income taxes
237

329

111


677

Income tax expense
(84
)
(86
)
(55
)

(225
)
Equity in earnings of subsidiaries, net of tax
299

34


(333
)

Net income
452

277

56

(333
)
452

Less net income attributable to the noncontrolling interest
(33
)

(33
)
33

(33
)
Net income attributable to QVC, Inc. stockholder
$
419

277

23

(300
)
419

Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Prior Period
Condensed Consolidating Statements of Operations
Three months ended September 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
1,369

224

662

(307
)
1,948

Cost of goods sold
847

38

416

(50
)
1,251

Gross profit
522

186

246

(257
)
697

Operating expenses:
 
 
 
 
 
Operating
94

61

64

(79
)
140

Selling, general and administrative, including stock-based compensation
246


104

(178
)
172

Depreciation
16

1

21


38

Amortization
62

41

13


116


418

103

202

(257
)
466

Operating income
104

83

44


231

Other (expense) income:
 
 
 
 
 
Equity in losses of investee


(2
)

(2
)
Interest expense, net
(52
)



(52
)
Foreign currency gain
3


2


5


(49
)



(49
)
Income before income taxes
55

83

44


182

Income tax expense
(13
)
(26
)
(27
)

(66
)
Equity in earnings of subsidiaries, net of tax
74

24


(98
)

Net income
116

81

17

(98
)
116

Less net income attributable to the noncontrolling interest
(9
)

(9
)
9

(9
)
Net income attributable to QVC, Inc. stockholder
$
107

81

8

(89
)
107

Nine months ended September 30, 2016
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net revenue
$
4,272

688

2,009

(945
)
6,024

Cost of goods sold
2,594

116

1,245

(139
)
3,816

Gross profit
1,678

572

764

(806
)
2,208

Operating expenses:





Operating
296

180

204

(252
)
428

Selling, general and administrative, including stock-based compensation
773


314

(554
)
533

Depreciation
41

5

57


103

Amortization
182

125

38


345


1,292

310

613

(806
)
1,409

Operating income
386

262

151


799

Other (expense) income:





Equity in losses of investee


(4
)

(4
)
Interest expense, net
(159
)



(159
)
Foreign currency gain
12


15


27

Intercompany interest (expense) income
(1
)
1





(148
)
1

11


(136
)
Income before income taxes
238

263

162


663

Income tax expense
(75
)
(85
)
(84
)

(244
)
Equity in earnings of subsidiaries, net of tax
256

106


(362
)

Net income
419

284

78

(362
)
419

Less net income attributable to the noncontrolling interest
(28
)

(28
)
28

(28
)
Net income attributable to QVC, Inc. stockholder
$
391

284

50

(334
)
391

Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss)
Nine months ended September 30, 2017
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
452

277

56

(333
)
452

Foreign currency translation adjustments, net of tax
110


110

(110
)
110

Total comprehensive income
562

277

166

(443
)
562

Comprehensive income attributable to noncontrolling interest
(37
)

(37
)
37

(37
)
Comprehensive income attributable to QVC, Inc. stockholder
$
525

277

129

(406
)
525

Condensed Consolidating Statements of Comprehensive Income
Three months ended September 30, 2017
 
(in millions)
Parent
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
166

115

16

(131
)
166

Foreign currency translation adjustments, net of tax
28


28

(28
)
28

Total comprehensive income
194

115

44

(159
)
194

Comprehensive income attributable to noncontrolling interest
(12
)

(12
)
12

(12
)
Comprehensive income attributable to QVC, Inc. stockholder
$
182

115

32

(147
)
182

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

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
419

284

78

(362
)
419

Foreign currency translation adjustments, net of tax
36


36

(36
)
36

Total comprehensive income
455

284

114

(398
)
455

Comprehensive income attributable to noncontrolling interest
(46
)

(46
)
46

(46
)
Comprehensive income attributable to QVC, Inc. stockholder
$
409

284

68

(352
)
409

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

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

Net income
$
116

81

17

(98
)
116

Foreign currency translation adjustments, net of tax
(3
)

(3
)
3

(3
)
Total comprehensive income
113

81

14

(95
)
113

Comprehensive income attributable to noncontrolling interest
(11
)

(11
)
11

(11
)
Comprehensive income attributable to QVC, Inc. stockholder
$
102

81

3

(84
)
102

Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Current Period
Condensed Consolidating Statements of Cash Flows
Nine months ended September 30, 2017
 
(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
$
550

306

51


907

Investing activities:
 
 
 
 
 
Capital expenditures
(54
)
(2
)
(27
)

(83
)
Expenditures for television distribution rights

(35
)


(35
)
Changes in other noncurrent assets
(1
)

(1
)

(2
)
Intercompany investing activities
385

(1,087
)

702


Net cash provided by (used in) investing activities
330

(1,124
)
(28
)
702

(120
)
Financing activities:
 
 
 
 
 
Principal payments of debt and capital lease obligations
(1,785
)

(6
)

(1,791
)
Principal borrowings of debt from senior secured credit facility
1,574




1,574

Dividends paid to Liberty Interactive Corporation
(491
)



(491
)
Dividends paid to noncontrolling interest


(22
)

(22
)
Other financing activities
(10
)



(10
)
Net short-term intercompany debt (repayments) borrowings
(353
)
(1,188
)
1,541



Other intercompany financing activities
186

1,959

(1,443
)
(702
)

Net cash (used in) provided by financing activities
(879
)
771

70

(702
)
(740
)
Effect of foreign exchange rate changes on cash and cash equivalents


12


12

Net increase (decrease) in cash and cash equivalents
1

(47
)
105


59

Cash and cash equivalents, beginning of period
2

97

185


284

Cash and cash equivalents, end of period
$
3

50

290


343

Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Prior Period
Condensed Consolidating Statements of Cash Flows
Nine months ended September 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
$
586

256

7


849

Investing activities:





Capital expenditures
(113
)
(3
)
(24
)

(140
)
Expenditures for television distribution rights

(8
)


(8
)
Changes in other noncurrent assets
6


(8
)

(2
)
Other investing activities
(12
)

9


(3
)
Intercompany investing activities
432

137


(569
)

Net cash provided by (used in) investing activities
313

126

(23
)
(569
)
(153
)
Financing activities:





Principal payments of debt and capital lease obligations
(1,295
)

(5
)

(1,300
)
Principal borrowings of debt from senior secured credit facility
1,048




1,048

Payment of debt origination fees
(2
)



(2
)
Dividends paid to Liberty Interactive Corporation
(427
)



(427
)
Dividends paid to noncontrolling interest


(21
)

(21
)
Other financing activities
(9
)



(9
)
Net short-term intercompany debt (repayments) borrowings
(83
)
(1,474
)
1,557



Other intercompany financing activities
(129
)
1,079

(1,519
)
569


Net cash (used in) provided by financing activities
(897
)
(395
)
12

569

(711
)
Effect of foreign exchange rate changes on cash and cash equivalents


7


7

Net increase (decrease) in cash and cash equivalents
2

(13
)
3


(8
)
Cash and cash equivalents, beginning of period

112

215


327

Cash and cash equivalents, end of period
$
2

99

218


319