2.4.0.812101100 - Disclosure - Basis of Presentationtruefalsefalse1falsefalsefalseD2013Q1http://www.sec.gov/CIK0001254699duration2013-01-01T00:00:002013-03-31T00:00:002falsefalsefalseD2012http://www.sec.gov/CIK0001254699duration2012-01-01T00:00:002012-12-31T00:00:001true1qvc_BasisOfPresentationAbstractqvc_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalse2falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_BasisOfPresentationAndSignificantAccountingPoliciesTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div style="font-size:10.0pt;font-family:Times New Roman;FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman;">
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px;"><font style="FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: inherit;">Basis of Presentation</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">QVC, Inc. (unless otherwise indicated or required by the context, the terms "we," "our," "us," the "Company" and "QVC" refer to QVC, Inc. and its consolidated subsidiaries) is a retailer of a wide range of consumer products, which are marketed and sold primarily by merchandise‑focused televised shopping programs, the internet and mobile applications. In the United States, QVC's live programming is distributed via its nationally televised shopping program</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">24</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day,</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">364</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">days per year ("QVC-U.S."). Internationally, QVC's program services are based in Japan ("QVC-Japan"), Germany ("QVC-Germany"), the United Kingdom ("QVC-U.K.") and Italy ("QVC-Italy"). QVC-Japan distributes live programming</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">24</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day, QVC-Germany distributes its program</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">24</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day with</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">23</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours of live programming and QVC-U.K. distributes its program</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">24</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day with</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">17</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours of live programming. QVC-Italy distributes programming live for</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">17</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day on satellite and digital terrestrial television and an additional</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">seven</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day of recorded programming on satellite and</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">seven</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day of general interest programming on digital terrestrial television.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">On July 4, 2012, QVC entered into a joint venture with China Broadcasting Corporation, a limited liability company owned by China National Radio (''CNR''), for a</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">49%</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">interest in a CNR subsidiary, CNR Home Shopping Co., Ltd. (''CNRS''). CNRS is distributing live programming for</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">12</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day and recorded programming for</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">12</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">hours a day. This joint venture is being accounted for as an equity method investment recorded as equity in earnings of investee in the condensed consolidated statements of operations.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">The Company has a venture with Mitsui & Co. LTD ("Mitsui") for a television and multimedia retailing service in Japan. QVC-Japan is owned</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">60%</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">by the Company and</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">40%</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">by Mitsui. The Company and Mitsui share in all profits and losses based on their respective ownership interests. During the</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">three months ended March 31, 2013 and 2012</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">, QVC-Japan paid dividends to Mitsui of</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">$25 million</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">and</font> <font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; COLOR: #000000; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; TEXT-DECORATION: none;">$29 million</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">, respectively.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 16px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">We are an indirect wholly owned subsidiary of Liberty Interactive Corporation ("Liberty") (Nasdaq: LINTA and LINTB), which owns interests in a broad range of digital commerce businesses. We are attributed to the Liberty Interactive tracking stock, which tracks the assets and liabilities of Liberty's Interactive Group (the "Interactive Group"). The Interactive Group does not represent a separate legal entity; rather, it represents those businesses, assets and liabilities that are attributed to that group. Liberty attributes to its Interactive Group those businesses primarily focused on digital commerce. Liberty also attributes to its Interactive Group its</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">37%</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">ownership interest in HSN, Inc., one of our two closest televised shopping competitors.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">The condensed consolidated financial statements include the accounts of the Company and its majority‑owned subsidiaries. All significant intercompany accounts and transactions were eliminated in consolidation.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">The accompanying (a) condensed consolidated balance sheet as of</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">December 31, 2012</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the audited condensed consolidated financial statements and notes thereto included elsewhere in this prospectus</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates include, but are not limited to, sales returns, uncollectible receivables, inventory obsolescence, depreciable lives of fixed assets, internally‑developed software, valuation of acquired intangible assets and goodwill, income taxes and stock‑based compensation.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">In February 2013, the FASB issued ASU No. 2013-02, which amends ASC Topic 220, Comprehensive Income and requires that companies present information about reclassification adjustments from accumulated other comprehensive income in their interim and annual financial statements. The standard requires that companies present either in a single note, or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety, companies will instead cross reference to the related footnote for additional information. QVC adopted this guidance as of January 1, 2013, and adoption did not have an impact on the QVC's condensed consolidated financial position, results of operations or cash flows.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">Certain prior period amounts have been reclassified to conform with current period presentation.</font></div></div>falsefalsefalse2falsefalsefalse00<div style="font-size:10.0pt;font-family:Times New Roman;">
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px;"><font style="FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: inherit;">(1) Basis of Presentation</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">QVC is a retailer of a wide range of consumer products, which are marketed and sold primarily by merchandise‑focused televised shopping programs, the internet and mobile applications. In the United States, QVC's live programming is distributed via its nationally televised shopping program 24 hours a day, 364 days per year ("QVC-U.S."). Internationally, QVC's program services are based in Japan ("QVC-Japan"), Germany ("QVC-Germany"), the United Kingdom ("QVC-U.K.") and Italy ("QVC-Italy"). QVC-Japan and QVC-Germany each distribute live programming 24 hours a day and QVC-U.K. distributes its program 24 hours a day with 17 hours of live programming. QVC-Italy launched on October 1, 2010, and is distributing programming live for 17 hours a day on satellite and public television and an additional seven hours a day of recorded programming on satellite television.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">On July 4, 2012, QVC entered into a joint venture with China Broadcasting Corporation, a limited liability company, owned by China National Radio (''CNR'') for a 49% interest in a CNR subsidiary, CNR Home Shopping Co., Ltd. (''CNRS''). CNRS is distributing live programming for 12 hours a day and recorded programming for 12 hours a day. This joint venture is being accounted for as an equity method investment as a component of loss on investments in the consolidated statements of operations.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 16px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">We are an indirect wholly owned subsidiary of Liberty Interactive Corporation ("Liberty"), which owns interests in a broad range of digital commerce businesses. On August 9, 2012, Liberty completed the recapitalization of its common stock into shares of the corresponding series of two new tracking stocks, Liberty Interactive (Nasdaq: LINTA, LINTB) and Liberty Ventures (Nasdaq: LVNTA, LVNTB). We are now attributed to the Liberty Interactive tracking stock, which tracks the assets and liabilities of Liberty's Interactive Group (the "Interactive Group"). The Interactive Group does not represent a separate legal entity; rather, it represents those businesses, assets and liabilities that are attributed to that group. Liberty attributed to its Interactive Group those businesses primarily focused on digital commerce. Liberty also attributed to its Interactive Group its 37% ownership interest in HSN, Inc., one of our two closest televised shopping competitors (see also Item 1. "Business," section "Competition"). To fund the cash requirements of Liberty Ventures, Liberty attributed $1.35 billion in cash to Liberty Ventures, which was funded by the Interactive Group. Such attributed cash balance consisted of cash from Liberty's balance sheet and $1.15 billion of dividends paid by us to Liberty through our available cash on hand and $800 million in borrowings under our senior secured credit facility. Immediately after the recapitalization, we had $870 million of total outstanding borrowings under our senior secured credit facility and $1.1 billion of undrawn availability. The senior secured credit facility is further discussed in note 9.</font></div>
<div style="FONT-SIZE: 10pt; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">During 2009, QVC underwent a recapitalization pursuant to which all of QVC's outstanding shares of common stock were canceled and exchanged for a single share of QVC's common stock in a many-for-one reverse stock split. The Company had one share of common stock authorized and outstanding as of</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">December 31, 2012 and 2011</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; PADDING-TOP: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">The Company has a venture with Mitsui & Co., LTD ("Mitsui") for a television and multimedia retailing service in Japan. QVC-Japan is owned 60% by the Company and 40% by Mitsui. The Company and Mitsui share in all profits and losses based on their respective ownership interests. The noncontrolling interests at</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">December 31, 2012 and 2011</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">were</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">$144 million</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">and</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">$129 million</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">, respectively. During the</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">years ended December 31, 2012, 2011 and 2010</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">, QVC-Japan paid dividends to Mitsui of</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">$29 million</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">,</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">$50 million</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">and</font> <font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: inherit; TEXT-DECORATION: none;">$63 million</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">, respectively.</font></div>
<div style="FONT-SIZE: 10pt; PADDING-BOTTOM: 12px; TEXT-ALIGN: left;"><font style="FONT-SIZE: 10pt; FONT-FAMILY: inherit;">The consolidated financial statements included the accounts of the Company and its majority‑owned subsidiaries. All significant intercompany accounts and transactions were eliminated in consolidation.</font></div>
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