Annual report pursuant to Section 13 and 15(d)

Guarantor/Non-Guarantor Subsidiary Financial Information (Tables)

v3.10.0.1
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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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
issuer-
QVC, Inc.

Combined
subsidiary
guarantors

Combined
non-guarantor
subsidiaries

Eliminations

Consolidated-
QVC, Inc. and
subsidiaries

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