10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 333-184501

QVC, Inc.

(Exact name of Registrant as specified in its charter)

State of Delaware (State or other jurisdiction of incorporation or organization)	23-2414041 (I.R.S. Employer Identification Number)
1200 Wilson Drive West Chester, Pennsylvania (Address of principal executive offices)	19380 (Zip Code)

Registrant's telephone number, including area code: (484) 701-1000

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer x (do not check if smaller reporting company) Smaller reporting company o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

None of the voting stock of the registrant is held by a non-affiliate of the registrant. There is no publicly traded market for any class of voting stock of the registrant. There is one holder of record of our equity, Liberty QVC Holdings, LLC, an indirect wholly-owned subsidiary of Liberty Interactive Corporation.

QVC, Inc.

2013 QUARTERLY REPORT ON FORM 10‑Q

Table of Contents

	Part I	Page
Item 1	Financial Statements (unaudited)	I-1
	Condensed Consolidated Balance Sheets	I-1
	Condensed Consolidated Statements of Operations	I-2
	Condensed Consolidated Statements of Comprehensive Income	I-3
	Condensed Consolidated Statements of Cash Flow	I-4
	Condensed Consolidated Statement of Equity	I-5
	Notes to the Unaudited Condensed Consolidated Financial Statements	I-6
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	I-27
Item 3	Quantitative and Qualitative Disclosures about Market Risk	I-37
Item 4	Controls and Procedures	I-37
	Part II
Item 6	Exhibits	II-1
	Signatures	II-2
	Exhibit Index	II-3

QVC, Inc.

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2013			2012
(in millions)	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	416		540
Restricted cash	15			15
Accounts receivable, less allowance for doubtful accounts of $75 million at June 30, 2013 and $74 million at December 31, 2012	702			1,055
Inventories	951			909
Deferred income taxes	159			151
Prepaid expenses	61			53
Total current assets	2,304			2,723
Property, plant and equipment, net of accumulated depreciation of $884 million at June 30, 2013 and $866 million at December 31, 2012	1,061			1,131
Cable and satellite television distribution rights, net	679			764
Goodwill	5,170			5,234
Other intangible assets, net	3,421			3,509
Other noncurrent assets	75			77
Total assets	$	12,710		13,438
Liabilities and equity
Current liabilities:
Current portion of debt and capital lease obligations	$	11		12
Accounts payable-trade	444			566
Accrued liabilities	691			955
Total current liabilities	1,146			1,533
Long-term portion of debt and capital lease obligations	3,870			3,465
Deferred compensation	14			12
Deferred income taxes	1,347			1,410
Other long-term liabilities	150			184
Total liabilities	6,527			6,604
Equity:
QVC, Inc. shareholder's equity:
Common stock, $0.01 par value	—			—
Additional paid-in capital	6,685			6,665
Accumulated deficit	(725		)	(161	)
Accumulated other comprehensive income	98			186
Total QVC, Inc. shareholder's equity	6,058			6,690
Noncontrolling interest	125			144
Total equity	6,183			6,834
Total liabilities and equity	$	12,710		13,438

See accompanying notes to condensed consolidated financial statements.

I-1

QVC, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

	Three months ended June 30,					Six months ended June 30,
(in millions)	2013			2012		2013		2012
Net revenue	$	1,961		1,974		3,935		3,906
Cost of goods sold	1,227			1,234		2,479		2,464
Gross profit	734			740		1,456		1,442
Operating expenses:
Operating	171			176		344		351
Selling, general and administrative, including stock-based compensation	138			134		293		276
Depreciation	33			33		63		64
Amortization of intangible assets	107			96		211		192
	449			439		911		883
Operating income	285			301		545		559
Other (expense) income:
Equity in losses of investee	(2		)	—		(1	)	—
Gains on financial instruments	3			13		15		24
Interest expense	(50		)	(57	)	(113	)	(111	)
Foreign currency loss	—			(8	)	(1	)	(2	)
Loss on extinguishment of debt	(16		)	—		(57	)	—
	(65		)	(52	)	(157	)	(89	)
Income before income taxes	220			249		388		470
Income tax expense	(81		)	(92	)	(143	)	(174	)
Net income	139			157		245		296
Less net income attributable to the noncontrolling interest	(13		)	(15	)	(25	)	(29	)
Net income attributable to QVC, Inc. shareholder	$	126		142		220		267

See accompanying notes to condensed consolidated financial statements.

I-2

QVC, Inc.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)

	Three months ended June 30,					Six months ended June 30,
(in millions)	2013			2012		2013		2012
Net income	$	139		157		245		296
Foreign currency translation adjustments	(16		)	(49	)	(107	)	(36	)
Total comprehensive income	123			108		138		260
Comprehensive income attributable to noncontrolling interest	(7		)	(19	)	(6	)	(23	)
Comprehensive income attributable to QVC, Inc. shareholder	$	116		89		132		237

See accompanying notes to condensed consolidated financial statements.

I-3

QVC, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Six months ended June 30,
(in millions)	2013			2012
Operating activities:
Net income	$	245		296
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in losses of investee	1			—
Deferred income taxes	(52		)	(64	)
Foreign currency loss	1			2
Depreciation	63			64
Amortization of intangible assets	211			192
Change in fair value of financial instruments and noncash interest	(11		)	(20	)
Loss on extinguishment of debt	57			—
Stock-based compensation	19			13
Change in other long-term liabilities	2			12
Effects of changes in working capital items	(94		)	148
Net cash provided by operating activities	442			643
Investing activities:
Capital expenditures, net	(75		)	(101	)
Expenditures for cable and satellite television distribution rights, net	(26		)	(2	)
Cash paid for joint ventures and acquisitions of businesses, net of cash received	—			(27	)
Decrease in restricted cash	—			2
Changes in other noncurrent assets	1			1
Net cash used in investing activities	(100		)	(127	)
Financing activities:
Principal payments of debt and capital lease obligations	(1,695		)	(779	)
Principal borrowings of debt from senior secured credit facility	1,053			648
Proceeds from issuance of senior secured notes, net of original issue discount	1,050			—
Payment of debt origination fees	(16		)	—
Payment of bond premium fees	(46		)	—
Other financing activities	7			—
Dividends paid to Liberty, net	(765		)	(458	)
Dividend paid to noncontrolling interest	(25		)	(29	)
Net cash used in financing activities	(437		)	(618	)
Effect of foreign exchange rate changes on cash and cash equivalents	(29		)	(12	)
Net decrease in cash and cash equivalents	(124		)	(114	)
Cash and cash equivalents, beginning of period	540			560
Cash and cash equivalents, end of period	$	416		446
Effects of changes in working capital items:
Decrease in accounts receivable	$	346		374
Increase in inventories	(51		)	(19	)
Increase in prepaid expenses	(11		)	(4	)
Decrease in accounts payable‑trade	(104		)	(86	)
Decrease in accrued liabilities and other	(274		)	(117	)
Effects of changes in working capital items	$	(94	)	148

See accompanying notes to condensed consolidated financial statements.

I-4

QVC, Inc.

Condensed Consolidated Statements of Equity

(unaudited)

	Common stock			Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive income		Noncontrolling interest		Total equity
(in millions, except share data)	Shares	Amount
Balance, December 31, 2012	1	$	—	6,665		(161	)	186		144		6,834
Net income	—	—		—		220		—		25		245
Foreign currency translation adjustments	—	—		—		—		(88	)	(19	)	(107	)
Dividend paid to Liberty and other	—	—		(6	)	(784	)	—		(25	)	(815	)
Tax benefit resulting from exercise of employee stock options	—	—		7		—		—		—		7
Stock‑based compensation	—	—		19		—		—		—		19
Balance, June 30, 2013	1	$	—	6,685		(725	)	98		125		6,183

See accompanying notes to condensed consolidated financial statements.

I-5

QVC, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

(1) Basis of Presentation

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 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 distributes live programming 24 hours a day, QVC-Germany distributes its program 24 hours a day with 23 hours of live programming and QVC-U.K. distributes its program 24 hours a day with 17 hours of live programming. QVC-Italy distributes programming live for 17 hours a day on satellite and digital terrestrial television and an additional seven hours a day of recorded programming on satellite and seven hours a day of general interest programming on digital terrestrial television.

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 recorded as equity in losses of investee in the condensed consolidated statements of operations.

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. During the six months ended June 30, 2013 and 2012, QVC-Japan paid dividends to Mitsui of $25 million and $29 million, respectively.

We are an indirect wholly owned subsidiary of Liberty Interactive Corporation ("Liberty") (Nasdaq: LINTA, LINTB, LVNTA and LVNTB), 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 37% ownership interest in HSN, Inc., one of our two closest televised shopping competitors.

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.

The accompanying (a) condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and (b) 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 the instructions to Form 10-Q 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 condensed consolidated financial statements and notes thereto contained in QVC's Annual Report on Form 10-K for the year ended December 31, 2012.

I-6

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

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.

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, which amends Accounting Standards Codification ("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 QVC's condensed consolidated financial position, results of operations or cash flows.

Certain prior period amounts have been reclassified to conform with current period presentation.

(2) Cable and Satellite Television Distribution Rights, Net

Cable and satellite television distribution rights consisted of the following:

	June 30,			December 31,
(in millions)	2013			2012
Cable and satellite television distribution rights	$	2,276		2,304
Less accumulated amortization	(1,597		)	(1,540	)
Cable and satellite television distribution rights, net	$	679		764

Amortization expense for cable and satellite television distribution rights was $44 million and $40 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, amortization expense for cable and satellite television distribution rights was $86 million and $81 million, respectively.

As of June 30, 2013, related amortization expense for each of the next five years ended December 31 was as follows (in millions):

Remainder of 2013	$	87
2014	168
2015	162
2016	161
2017	111

(3) Goodwill

The changes in the carrying amount of goodwill were as follows:

(in millions)	QVC-U.S.		QVC-Japan		QVC-Germany		QVC-U.K.		QVC-Italy		Total
Balance as of December 31, 2012	$	4,190	349		334		212		149		5,234
Exchange rate fluctuations	—		(44	)	(4	)	(14	)	(2	)	(64	)
Balance as of June 30, 2013	$	4,190	305		330		198		147		5,170

I-7

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(4) Other Intangible Assets, Net

Other intangible assets consisted of the following:

	June 30, 2013				December 31, 2012
(in millions)	Gross cost		Accumulated amortization		Gross cost	Accumulated amortization
Purchased and internally developed software	$	574	(355	)	575	(352	)
Affiliate and customer relationships	2,438		(1,706	)	2,445	(1,624	)
Debt origination fees	52		(10	)	54	(18	)
Trademarks (indefinite life)	2,428		—		2,429	—
	$	5,492	(2,071	)	5,503	(1,994	)

Amortization expense for other intangible assets was $63 million and $56 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, amortization expense for other intangible assets was $125 million and $111 million, respectively.

As of June 30, 2013, the related amortization expense and interest expense for each of the next five years ended December 31 was as follows (in millions):

Remainder of 2013	$	139
2014	268
2015	244
2016	196
2017	121

(5) Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30,		December 31,
(in millions)	2013		2012
Accounts payable non-trade	$	202	264
Accrued compensation and benefits	95		100
Deferred revenue	79		85
Allowance for sales returns	73		92
Accrued interest	49		50
Liability for consigned goods sold	48		56
Income taxes	40		154
Sales and other taxes	39		62
Other	66		92
	$	691	955

I-8

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(6) Long-Term Debt and Interest Rate Swap Arrangements

Long-term debt consisted of the following:

	June 30,			December 31,
(in millions)	2013			2012
7.125% Senior Secured Notes due 2017	$	—		500
7.5% Senior Secured Notes due 2019, net of original issue discount	760			988
7.375% Senior Secured Notes due 2020	500			500
5.125% Senior Secured Notes due 2022	500			500
4.375% Senior Secured Notes due 2023, net of original issue discount	750			—
5.95% Senior Secured Notes due 2043, net of original issue discount	300			—
Senior secured credit facility	990			903
Capital lease obligations	81			86
Total debt	3,881			3,477
Less current portion	(11		)	(12	)
Long-term portion of debt and capital lease obligations	$	3,870		3,465

Senior Secured Credit Facility

On March 1, 2013, we amended and restated our senior secured credit facility, which provides for a $2.0 billion revolving credit facility with a $250 million sub-limit for standby letters of credit and $1.0 billion of uncommitted incremental revolving loan commitments or incremental term loans. QVC may elect that the loans extended under the senior secured credit facility bear interest at a rate per annum equal to the ABR Rate or LIBOR, as each is defined in the senior secured credit facility agreement, plus a margin of 0.25% to 2.00% depending on various factors. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. Any amounts prepaid on the revolving credit facility may be reborrowed. Payment of loans may be accelerated following certain customary events of default. The senior secured credit facility is a multi-currency facility. The senior secured credit facility is secured by the stock of QVC. We had $1.0 billion available under the terms of the senior secured credit facility at June 30, 2013. The interest rate on the senior secured credit facility was 1.7% at June 30, 2013.

The purpose of the amendment was to, among other things, extend the maturity of our senior secured credit facility to March 1, 2018 and lower the interest rate on borrowings.

The senior secured credit facility contains certain affirmative and negative covenants, including certain restrictions with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting QVC's ratio of consolidated total debt to consolidated Adjusted OIBDA.

Senior Secured Notes

On March 4, 2013, QVC announced the commencement of cash tender offers (the "Offers") for any and all of its outstanding $500 million in aggregate principal amount of 7.125% Senior Secured Notes due 2017 and up to $250 million in aggregate principal amount of its 7.5% Senior Secured Notes due 2019. On March 18, 2013, $124 million of the 7.125% Senior Secured Notes due 2017 were tendered pursuant to the Offers, whereby holders of the 7.125% Senior Secured Notes due 2017 received consideration of $1,039.40 for each $1,000 principal amount of tendered 7.125% Senior Secured Notes due 2017. On March 18, 2013, $231 million of the 7.5% Senior Secured Notes due 2019 were tendered pursuant to the Offers, whereby holders of the 7.5% Senior Secured Notes due 2019 received consideration of $1,120 for each $1,000 principal amount of tendered 7.5% Senior Secured Notes due 2019. On April 17, 2013, QVC completed the redemption of the remaining $376 million principal amount of its 7.125% Senior Secured Notes due 2017, whereby holders received consideration of $1,035.63 for each $1,000 principal amount of tendered 7.125% Senior Secured Notes due 2017.

I-9

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

On March 18, 2013, QVC issued $750 million principal amount of 4.375% Senior Secured Notes due 2023 at an issue price of 99.968% and issued $300 million principal amount of 5.95% Senior Secured Notes due 2043 at an issue price of 99.973%. These notes are secured by the stock of QVC, pari passu with the senior secured credit facility and QVC's existing notes. Interest is payable semi-annually.

The net proceeds from the issuance of these instruments were used to reduce the outstanding principal under QVC's existing 7.125% Senior Secured Notes due 2017, the 7.5% Senior Secured Notes due 2019 and the senior secured credit facility, as well as for general corporate purposes.

Additionally, as a result of these refinancing transactions, we incurred an extinguishment loss of $57 million for the six months ended June 30, 2013, recorded as loss on extinguishment of debt in the condensed consolidated statements of operations.

Interest Rate Swap Arrangements

In March 2013, QVC's notional interest rate swaps of $3.1 billion expired. These swap arrangements did not qualify as cash flow hedges under U.S. GAAP. Accordingly, changes in the fair value of the swaps were reflected in gain on financial instruments in the accompanying condensed consolidated statements of operations.

At December 31, 2012, the fair value of the swap instruments was a net liability position of $12 million, of which $13 million was included in accrued liabilities, offset by $1 million included in prepaid expenses in the condensed consolidated balance sheet.

Other Debt Related Information

QVC was in compliance with all of its debt covenants at June 30, 2013.

During the quarter, there were no significant changes to QVC's debt credit ratings.

The weighted average rate applicable to all of the outstanding debt (excluding capital leases) was 4.9% as of June 30, 2013.

(7) Leases and Transponder Service Arrangements

Future minimum payments under noncancelable operating leases and capital transponder leases with initial terms of one year or more at June 30, 2013 consisted of the following:

(in millions)	Capital transponders		Operating leases
Remainder of 2013	$	7	12
2014	12		16
2015	11		14
2016	10		10
2017	10		9
Thereafter	38		101
Total	$	88	162

The Company has entered into ten separate agreements with transponder suppliers to transmit its signals in the U.S., Germany and the U.K. via various satellites at an aggregate monthly cost of $1 million. Depreciation expense related to the transponders was $3 million and $3 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, depreciation expense related to the transponders was $6 million and $7 million, respectively. Total future minimum capital lease payments of $88 million include $7 million of imputed interest. Our transponder service agreement for our U.S. transponders expires at the earlier of the end of the lives of the satellites or the service agreement, which are currently estimated to be either 2019 or 2020, respectively. Our transponder service agreements for our international transponders expire between 2013 and 2022.

I-10

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Expenses for operating leases, principally for data processing equipment and facilities and for satellite uplink service agreements, amounted to $6 million and $10 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, expenses for operating leases were $14 million and $17 million, respectively.

(8) Income Taxes

The Company calculates its interim income tax provision by applying its best estimate of the annual expected effective tax rate to its ordinary year-to-date income or loss. The tax or benefit related to significant, unusual or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on the prior quarters is included in the tax expense for the current quarter.

For the three months ended June 30, 2013, the Company recorded a tax provision of $81 million, which represented an effective tax rate of 36.8%. For the six months ended June 30, 2013, the Company recorded a tax provision of $143 million, which represented an effective tax rate of 36.9%. These rates differ from the U.S. federal income tax rate of 35.0% due primarily to state tax expense.

The Company's tax years 2013 and 2012 are currently under examination by the Internal Revenue Service. The Company files Federal tax returns on a consolidated basis with its parent company, Liberty. The Company, or one of its subsidiaries, files income tax returns in various states and foreign jurisdictions. As of June 30, 2013, the Company, or one of its subsidiaries, was under examination in California, Minnesota, New Jersey, New York, New York City and Pennsylvania, as well as in Germany and the U.K.

The amounts of the tax-related balances due from (to) Liberty at June 30, 2013 and December 31, 2012 were $1 million and $(70) million, respectively, and were included in accrued liabilities in the accompanying condensed consolidated balance sheets.

The Company entered into a Tax Liability Allocation and Indemnification Agreement (the “Agreement”), dated April 26, 2004, with Liberty. The Agreement establishes the methodology for the calculation and payment of income taxes in connection with the consolidation of the Company with Liberty for income tax purposes. Generally, the Agreement provides that the Company will pay Liberty an amount equal to the tax liability, if any, that it would have if it were to file as a consolidated group separate and apart from Liberty, with exceptions for the treatment and timing of certain items, including but not limited to deferred intercompany transactions, credits, and net operating and capital losses. To the extent that the separate company tax expense is different from the payment terms of the Agreement, the difference is recorded as either a dividend or capital contribution.

(9) Commitments and Contingencies

The Company has contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that the amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements.

I-11

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Network and information systems, including the internet and telecommunication systems, third party delivery services and other technologies are critical to our business activities. Substantially all our customer orders, fulfillment and delivery services are dependent upon the use of network and information systems, including the use of third party telecommunication and delivery service providers. If information systems including the internet or telecommunication services are disrupted, or if the third party delivery services experience a disruption in their transportation delivery services, we could face a significant disruption in fulfilling our customer orders and shipment of our products. We have active disaster recovery programs in place to help mitigate risks associated with these critical business activities.

(10) Assets and Liabilities Measured at Fair Value

For assets and liabilities required to be reported or disclosed at fair value, U.S. GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

The Company's assets and liabilities measured or disclosed at fair value were as follows:

			Fair value measurements at June 30, 2013 using
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Current assets:
Cash equivalents	$	325	325	—	—
Long-term liabilities:
Debt (note 6)	3,843		—	3,843	—

			Fair value measurements at December 31, 2012 using
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Curret assets:
Cash equivalents	$	424	424	—	—
Interest rate swap arrangements (note 6)	1		—	1	—
Current liabilities:
Interest rate swap arrangements (note 6)	13		—	13	—
Long-term liabilities
Debt (note 6)	3,626		—	3,626	—

The majority of the Company's Level 2 financial assets and liabilities are debt instruments with quoted market prices that are not considered to be traded on “active markets,” as defined in U.S. GAAP. Accordingly, the financial instruments are reported in the foregoing tables as Level 2 fair value instruments.

I-12

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

U.S. GAAP requires the incorporation of a credit risk valuation adjustment in the Company's fair value measurements to estimate the impact of both its own nonperformance risk and the nonperformance risk of its counterparties. The Company estimates credit risk associated with its own and its counterparties' nonperformance primarily by using observable credit default swap rates for terms similar to those of the remaining life of the instrument, adjusted for any master netting arrangements or other factors that provide an estimate of nonperformance risk. These are Level 3 inputs. However, as the credit risk valuation adjustments were not significant, the Company reported its interest rate swaps as Level 2. The counterparties to the Company's interest rate swap arrangements were all major international financial institutions.

(11) Information about QVC's Operating Segments

Each of the Company's operating segments are retailers of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised-shopping programs as well as via the internet and mobile applications in certain markets. The Company has operations in the United States, Japan, Germany, the United Kingdom and Italy. As such, the Company has identified five reportable segments: the United States, Japan, Germany, the United Kingdom and Italy.

The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as net revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per subscriber equivalent. The Company defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). The Company believes this measure is an important indicator of the operational strength and performance of its segments, including the ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking among our businesses and identify strategies to improve performance. This measure of performance excludes depreciation, amortization and stock-based compensation, that are included in the measurement of operating income pursuant to U.S. GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. GAAP.

Performance measures

	Three months ended June 30,							Six months ended June 30,
	2013				2012			2013			2012
(in millions)	Net revenue		Adjusted OIBDA		Net revenue	Adjusted OIBDA		Net revenue	Adjusted OIBDA		Net revenue	Adjusted OIBDA
QVC-U.S.	$	1,312	320		1,280	315		2,609	611		2,520	585
QVC-Japan	260		57		310	70		516	111		599	133
QVC-Germany	207		35		210	39		457	78		457	85
QVC-U.K.	153		26		156	21		293	45		296	41
QVC-Italy	29		(4	)	18	(7	)	60	(7	)	34	(16	)
Consolidated QVC	$	1,961	434		1,974	438		3,935	838		3,906	828

Net revenue amounts by product category are not available from our general purpose financial statements.

I-13

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Other information

	Three months ended June 30,					Six months ended June 30,
	2013			2012		2013		2012
(in millions)	Depreciation		Amortization	Depreciation	Amortization	Depreciation	Amortization	Depreciation	Amortization
QVC-U.S.	$	14	91	13	82	27	179	26	162
QVC-Japan	5		2	4	2	8	4	8	5
QVC-Germany	8		9	8	8	16	18	17	16
QVC-U.K.	5		3	7	3	9	6	10	6
QVC-Italy	1		2	1	1	3	4	3	3
Consolidated QVC	$	33	107	33	96	63	211	64	192

	June 30, 2013			December 31, 2012
(in millions)	Total assets		Capital expenditures	Total assets	Capital expenditures
QVC-U.S.	$	10,047	37	10,541	88
QVC-Japan	789		13	969	105
QVC-Germany	1,037		14	1,064	25
QVC-U.K.	585		6	619	22
QVC-Italy	252		5	245	6
Consolidated QVC	$	12,710	75	13,438	246

Long-lived assets, net of accumulated depreciation, by geographic area were as follows:

	June 30,		December 31,
(in millions)	2013		2012
QVC-U.S.	$	417	429
QVC-Japan	245		280
QVC-Germany	238		247
QVC-U.K.	116		128
QVC-Italy	45		47
Consolidated QVC	$	1,061	1,131

The following table provides a reconciliation of Adjusted OIBDA to income before income taxes:

	Three months ended June 30,					Six months ended June 30,
(in millions)	2013			2012		2013		2012
Adjusted OIBDA	$	434		438		838		828
Stock‑based compensation	(9		)	(8	)	(19	)	(13	)
Depreciation and amortization	(140		)	(129	)	(274	)	(256	)
Equity in losses of investee	(2		)	—		(1	)	—
Gains on financial instruments	3			13		15		24
Interest expense	(50		)	(57	)	(113	)	(111	)
Foreign currency loss	—			(8	)	(1	)	(2	)
Loss on extinguishment of debt	(16		)	—		(57	)	—
Income before income taxes	$	220		249		388		470

I-14

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(12) Other Comprehensive Income

The change in the component of accumulated other comprehensive income, net of taxes ("AOCI"), is summarized as follows:

(in millions)	Foreign currency translation adjustments			AOCI
Balance at January 1, 2012	$	194		194
Other comprehensive loss attributable to QVC, Inc. shareholder	(30		)	(30	)
Balance at June 30, 2012	164			164
Balance at January 1, 2013	$	186		186
Other comprehensive loss attributable to QVC, Inc. shareholder	(88		)	(88	)
Balance at June 30, 2013	98			98

The component of other comprehensive income is reflected in QVC's condensed consolidated statements of comprehensive income, net of taxes. The following table summarizes the tax effects related to the component of other comprehensive income:

(in millions)	Before-tax amount			Tax (expense) benefit		Net-of-tax amount
Three months ended June 30, 2013:
Foreign currency translation adjustments	$	(13	)	(3	)	(16	)
Other comprehensive loss	(13		)	(3	)	(16	)
Three months ended June 30, 2012:
Foreign currency translation adjustments	$	(65	)	16		(49	)
Other comprehensive (loss) income	(65		)	16		(49	)
Six months ended June 30, 2013:
Foreign currency translation adjustments	$	(129	)	22		(107	)
Other comprehensive (loss) income	(129		)	22		(107	)
Six months ended June 30, 2012:
Foreign currency translation adjustments	$	(48	)	12		(36	)
Other comprehensive (loss) income	(48		)	12		(36	)

(13) Subsequent Events

QVC declared and paid cash dividends to Liberty in the amount of $83 million subsequent to June 30, 2013.

I-15

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

(14) Guarantor/Non-guarantor Subsidiary Financial Information

The following information contains the condensed consolidating financial statements for the Company, the parent on a stand-alone basis (QVC, Inc.), the combined subsidiary guarantors (Affiliate Relations Holdings, Inc.; Affiliate Investment, Inc.; AMI 2, Inc.; ER Marks, Inc.; QVC International LLC; QVC Rocky Mount, Inc. and QVC San Antonio, LLC) and the combined non-guarantor subsidiaries pursuant to Rule 3-10 of Regulation S-X. Certain non-guarantor subsidiaries are majority owned by QVC International LLC, which is a guarantor subsidiary.

These condensed consolidating financial statements have been prepared from the Company’s financial information on the same basis of accounting as the Company’s condensed consolidated financial statements. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, such as management fees, royalty revenue and expense and interest income and expense. Goodwill and other intangible assets have been allocated to the subsidiaries based on management’s estimates. Certain costs have been partially allocated to all of the subsidiaries of the Company.

The subsidiary guarantors are 100% owned by the Company. All guarantees are full and unconditional and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its U.S. subsidiaries, including the guarantors, by dividend or loan. The Company has not presented separate notes and other disclosures concerning the subsidiary guarantors as the Company has determined that such material information is available in the notes to the Company’s condensed consolidated financial statements.

I-16

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated balance sheets

June 30, 2013
(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	$	8		164		244		—		416
Restricted cash	13			—		2		—		15
Accounts receivable, net	460			—		242		—		702
Inventories	687			—		264		—		951
Deferred income taxes	137			—		22		—		159
Prepaid expenses	21			—		40		—		61
Total current assets	1,326			164		814		—		2,304
Property, plant and equipment, net	242			64		755		—		1,061
Cable and satellite television distribution rights, net	—			554		125		—		679
Goodwill	4,169			—		1,001		—		5,170
Other intangible assets, net	1,206			2,049		166		—		3,421
Other noncurrent assets	10			—		65		—		75
Investments in subsidiaries	3,586			1,715		—		(5,301	)	—
Total assets	$	10,539		4,546		2,926		(5,301	)	12,710
Liabilities and equity
Current liabilities:
Current portion of debt and capital lease obligations	$	2		—		9		—		11
Accounts payable-trade	236			—		208		—		444
Accrued liabilities	232			45		414		—		691
Intercompany accounts (receivable) payable	(364		)	(309	)	673		—		—
Total current liabilities	106			(264	)	1,304		—		1,146
Long-term portion of debt and capital lease obligations	3,813			—		57		—		3,870
Deferred compensation	13			—		1		—		14
Deferred income taxes	417			944		(14	)	—		1,347
Other long-term liabilities	132			—		18		—		150
Total liabilities	4,481			680		1,366		—		6,527
Equity:
QVC, Inc. shareholder's equity	6,058			3,866		1,435		(5,301	)	6,058
Noncontrolling interest	—			—		125		—		125
Total equity	6,058			3,866		1,560		(5,301	)	6,183
Total liabilities and equity	$	10,539		4,546		2,926		(5,301	)	12,710

I-17

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated balance sheets

December 31, 2012
(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	$	75		165		300	—		540
Restricted cash	13			—		2	—		15
Accounts receivable, net	747			—		308	—		1,055
Inventories	691			—		218	—		909
Deferred income taxes	131			—		20	—		151
Prepaid expenses	19			—		34	—		53
Total current assets	1,676			165		882	—		2,723
Property, plant and equipment, net	247			67		817	—		1,131
Cable and satellite television distribution rights, net	—			618		146	—		764
Goodwill	4,169			—		1,065	—		5,234
Other intangible assets, net	1,280			2,049		180	—		3,509
Other noncurrent assets	14			—		63	—		77
Investments in subsidiaries	3,789			1,838		—	(5,627	)	—
Total assets	$	11,175		4,737		3,153	(5,627	)	13,438
Liabilities and equity
Current liabilities:
Current portion of debt and capital lease obligations	$	2		—		10	—		12
Accounts payable-trade	324			—		242	—		566
Accrued liabilities	402			106		447	—		955
Intercompany accounts (receivable) payable	(226		)	(411	)	637	—		—
Total current liabilities	502			(305	)	1,336	—		1,533
Long-term portion of debt and capital lease obligations	3,404			—		61	—		3,465
Deferred compensation	11			—		1	—		12
Deferred income taxes	431			964		15	—		1,410
Other long-term liabilities	137			17		30	—		184
Total liabilities	4,485			676		1,443	—		6,604
Equity:
QVC, Inc. shareholder's equity	6,690			4,061		1,566	(5,627	)	6,690
Noncontrolling interest	—			—		144	—		144
Total equity	6,690			4,061		1,710	(5,627	)	6,834
Total liabilities and equity	$	11,175		4,737		3,153	(5,627	)	13,438

I-18

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of operations

Three months ended June 30, 2013
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	1,384		182		623		(228	)	1,961
Cost of goods sold	836			23		427		(59	)	1,227
Gross profit	548			159		196		(169	)	734
Operating expenses:
Operating	47			48		76		—		171
Selling, general and administrative, including stock-based compensation	227			—		80		(169	)	138
Depreciation	9			2		22		—		33
Amortization of intangible assets	51			36		20		—		107
Intercompany management expense (income)	15			(4	)	(11	)	—		—
	349			82		187		(169	)	449
Operating income	199			77		9		—		285
Other (expense) income:
Equity in losses of investee	—			—		(2	)	—		(2	)
Gains on financial instruments	—			—		3		—		3
Interest (expense) income	(50		)	(1	)	1		—		(50	)
Foreign currency (loss) gain	(1		)	—		1		—		—
Loss on extinguishment of debt	(16		)	—		—		—		(16	)
Intercompany interest (expense) income	(4		)	12		(8	)	—		—
	(71		)	11		(5	)	—		(65	)
Income before income taxes	128			88		4		—		220
Income tax expense	(21		)	(32	)	(28	)	—		(81	)
Equity in earnings of subsidiaries, net of tax	32			11		—		(43	)	—
Net income (loss)	139			67		(24	)	(43	)	139
Less net income attributable to the noncontrolling interest	(13		)	—		(13	)	13		(13	)
Net income (loss) attributable to QVC, Inc. shareholder	$	126		67		(37	)	(30	)	126

I-19

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of operations

Three months ended June 30, 2012
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	1,352		182		670		(230	)	1,974
Cost of goods sold	830			27		437		(60	)	1,234
Gross profit	522			155		233		(170	)	740
Operating expenses:
Operating	45			47		84		—		176
Selling, general and administrative, including stock-based compensation	217			—		87		(170	)	134
Depreciation	9			1		23		—		33
Amortization of intangible assets	48			33		15		—		96
Intercompany management expense (income)	44			(18	)	(26	)	—		—
	363			63		183		(170	)	439
Operating income	159			92		50		—		301
Other income (expense):
Gains on financial instruments	12			—		1		—		13
Interest expense	(56		)	—		(1	)	—		(57	)
Foreign currency loss	(3		)	(5	)	—		—		(8	)
Intercompany interest (expense) income	(3		)	12		(9	)	—		—
	(50		)	7		(9	)	—		(52	)
Income before income taxes	109			99		41		—		249
Income tax expense	(29		)	(29	)	(34	)	—		(92	)
Equity in earnings of subsidiaries, net of tax	77			17		—		(94	)	—
Net income (loss)	157			87		7		(94	)	157
Less net income attributable to the noncontrolling interest	(15		)	—		(15	)	15		(15	)
Net income (loss) attributable to QVC, Inc. shareholder	$	142		87		(8	)	(79	)	142

I-20

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of operations

Six months ended June 30, 2013
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	2,752		365		1,277		(459	)	3,935
Cost of goods sold	1,690			49		860		(120	)	2,479
Gross profit	1,062			316		417		(339	)	1,456
Operating expenses:
Operating	92			93		159		—		344
Selling, general and administrative, including stock-based compensation	463			—		169		(339	)	293
Depreciation	19			3		41		—		63
Amortization of intangible assets	102			70		39		—		211
Intercompany management expense (income)	32			(7	)	(25	)	—		—
	708			159		383		(339	)	911
Operating income	354			157		34		—		545
Other income (expense):
Equity in losses of investee	—			—		(1	)	—		(1	)
Gains on financial instruments	12			—		3		—		15
Interest expense	(112		)	(1	)	—		—		(113	)
Foreign currency (loss) gain	(2		)	(1	)	2		—		(1	)
Loss on extinguishment of debt	(57		)	—		—		—		(57	)
Intercompany interest (expense) income	(7		)	25		(18	)	—		—
	(166		)	23		(14	)	—		(157	)
Income before income taxes	188			180		20		—		388
Income tax expense	(32		)	(60	)	(51	)	—		(143	)
Equity in earnings of subsidiaries, net of tax	89			26		—		(115	)	—
Net income (loss)	245			146		(31	)	(115	)	245
Less net income attributable to the noncontrolling interest	(25		)	—		(25	)	25		(25	)
Net income (loss) attributable to QVC, Inc. shareholder	$	220		146		(56	)	(90	)	220

I-21

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of operations

Six months ended June 30, 2012
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	2,662		354		1,342		(452	)	3,906
Cost of goods sold	1,653			54		876		(119	)	2,464
Gross profit	1,009			300		466		(333	)	1,442
Operating expenses:
Operating	88			92		171		—		351
Selling, general and administrative, including stock-based compensation	440			—		169		(333	)	276
Depreciation	17			2		45		—		64
Amortization of intangible assets	96			65		31		—		192
Intercompany management expense (income)	40			(15	)	(25	)	—		—
	681			144		391		(333	)	883
Operating income	328			156		75		—		559
Other income (expense):
Gains on financial instruments	24			—		—		—		24
Interest expense	(111		)	—		—		—		(111	)
Foreign currency (loss) gain	(5		)	—		3		—		(2	)
Intercompany interest (expense) income	(6		)	25		(19	)	—		—
	(98		)	25		(16	)	—		(89	)
Income before income taxes	230			181		59		—		470
Income tax expense	(63		)	(54	)	(57	)	—		(174	)
Equity in earnings of subsidiaries, net of tax	129			34		—		(163	)	—
Net income (loss)	296			161		2		(163	)	296
Less net income attributable to the noncontrolling interest	(29		)	—		(29	)	29		(29	)
Net income (loss) attributable to QVC, Inc. shareholder	$	267		161		(27	)	(134	)	267

I-22

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of comprehensive income (loss)

Three months ended June 30, 2013
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	139		67	(24	)	(43	)	139
Foreign currency translation adjustments	(16		)	—	(16	)	16		(16	)
Total comprehensive income (loss)	123			67	(40	)	(27	)	123
Comprehensive (income) loss attributable to noncontrolling interest	(7		)	—	(7	)	7		(7	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	116			67	(47	)	(20	)	116

Three months ended June 30, 2012
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	157		87	7		(94	)	157
Foreign currency translation adjustments	(49		)	—	(49	)	49		(49	)
Total comprehensive income (loss)	108			87	(42	)	(45	)	108
Comprehensive (income) loss attributable to noncontrolling interest	(19		)	—	(19	)	19		(19	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	89			87	(61	)	(26	)	89

I-23

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of comprehensive income (loss)

Six months ended June 30, 2013
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	245		146	(31	)	(115	)	245
Foreign currency translation adjustments	(107		)	—	(107	)	107		(107	)
Total comprehensive income (loss)	138			146	(138	)	(8	)	138
Comprehensive (income) loss attributable to noncontrolling interest	(6		)	—	(6	)	6		(6	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$	132		146	(144	)	(2	)	132

Six months ended June 30, 2012
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	296		161	2		(163	)	296
Foreign currency translation adjustments	(36		)	—	(36	)	36		(36	)
Total comprehensive income (loss)	260			161	(34	)	(127	)	260
Comprehensive (income) loss attributable to noncontrolling interest	(23		)	—	(23	)	23		(23	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$	237		161	(57	)	(104	)	237

I-24

QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of cash flows

Six months ended June 30, 2013
(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 (used in) operating activities	$	358		115		(31	)	—		442
Investing activities:
Capital expenditures, net	(33		)	—		(42	)	—		(75	)
Expenditures for cable and satellite television distribution rights, net	—			(25	)	(1	)	—		(26	)
Changes in other noncurrent assets	4			—		(3	)	—		1
Intercompany investing activities	292			149		—		(441	)	—
Net cash provided by (used in) investing activities	263			124		(46	)	(441	)	(100	)
Financing activities:
Principal payments of debt and capital lease obligations	(1,690		)	—		(5	)	—		(1,695	)
Principal borrowings of debt from senior secured credit facility	1,053			—		—		—		1,053
Proceeds from issuance of senior secured notes, net of original issue discount	1,050			—		—		—		1,050
Payment of debt origination fees	(16		)	—		—		—		(16	)
Payment of bond premium fees	(46		)	—		—		—		(46	)
Other financing activities	7			—		—		—		7
Dividends paid to Liberty, net	(765		)	—		—		—		(765	)
Dividend paid to noncontrolling interest	—			—		(25	)	—		(25	)
Net short-term intercompany debt (repayments) borrowings	(138		)	102		36		—		—
Intercompany financing activities	(143		)	(342	)	44		441		—
Net cash (used in) provided by financing activities	(688		)	(240	)	50		441		(437	)
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		(29	)	—		(29	)
Net decrease in cash and cash equivalents	(67		)	(1	)	(56	)	—		(124	)
Cash and cash equivalents, beginning of period	75			165		300		—		540
Cash and cash equivalents, end of period	$	8		164		244		—		416

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QVC, Inc.

Notes to Condensed Consolidated Financial Statements (continued)

(unaudited)

Condensed consolidated statements of cash flows

Six months ended June 30, 2012
(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	$	403		171		69		—		643
Investing activities:
Capital expenditures, net	(20		)	(1	)	(80	)	—		(101	)
Expenditures for cable and satellite television distribution rights, net	—			(1	)	(1	)	—		(2	)
Cash paid for joint ventures and acquisitions of businesses, net of cash received	—			—		(27	)	—		(27	)
Decrease in restricted cash	2			—		—		—		2
Changes in other noncurrent assets	2			(1	)	—		—		1
Intercompany investing activities	306			189		—		(495	)	—
Net cash provided by (used in) investing activities	290			186		(108	)	(495	)	(127	)
Financing activities:
Principal payments of debt and capital lease obligations	(774		)	—		(5	)	—		(779	)
Principal borrowings of debt from senior secured credit facility	648			—		—		—		648
Dividends paid to Liberty, net	(458		)	—		—		—		(458	)
Dividend paid to noncontrolling interest	—			—		(29	)	—		(29	)
Net short-term intercompany debt (repayments) borrowings	(45		)	24		21		—		—
Intercompany financing activities	(64		)	(441	)	10		495		—
Net cash used in financing activities	(693		)	(417	)	(3	)	495		(618	)
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		(12	)	—		(12	)
Net decrease in cash and cash equivalents	—			(60	)	(54	)	—		(114	)
Cash and cash equivalents, beginning of period	3			223		334		—		560
Cash and cash equivalents, end of period	$	3		163		280		—		446

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business, product and marketing strategies; new service offerings; revenue growth and subscriber trends; the recoverability of our goodwill and other long-lived assets; our projected sources and uses of cash and the anticipated impact of certain contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated:

• customer demand for our products and services and our ability to adapt to changes in demand;

• competitor responses to our products and services;

• the levels of online traffic on our websites and our ability to convert visitors into customers or contributors;

• uncertainties inherent in the development and integration of new business lines and business strategies;

• our future financial performance, including availability, terms and deployment of capital;

• our ability to successfully integrate and recognize anticipated efficiencies and benefits from the businesses we acquire;

• the ability of suppliers and vendors to deliver products, equipment, software and services;

• the outcome of any pending or threatened litigation;

• availability of qualified personnel;

• changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the Federal Communications Commission, and adverse outcomes from regulatory proceedings;

• changes in the nature of key strategic relationships with partners, distributors, suppliers and vendors;

• general economic and business conditions and industry trends, including the current economic downturn in certain regions of the world;

• consumer spending levels, including the availability and amount of individual consumer debt;

• advertising spending levels;

• changes in distribution and viewing of television programming, including the expanded deployment of personal video recorders, video on demand and IP television;

• increased digital TV penetration and the impact on channel positioning of our programs;

• rapid technological changes;

• if we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions or private litigation and our reputation could suffer;

• the regulatory and competitive environment of the industries in which we operate;

• threatened terrorist attacks and ongoing military action around the world;

• fluctuation in foreign currency exchange rates and political unrest in international markets;

• Liberty's dependence on our cash flow for servicing its debt and for other purposes; and

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• The risks identified under "Risk Factors" in Item 1A. of our annual report on Form 10-K for the year ended December 31, 2012.

These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Quarterly Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.

The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto and our Annual Report on Form 10-K for the year ended December 31, 2012.

Overview

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. Internationally, QVC's program services are based in Japan, Germany, the United Kingdom and Italy. QVC-Japan distributes live programming 24 hours a day, QVC-Germany distributes its program 24 hours a day with 23 hours of live programming and QVC-U.K. distributes its program 24 hours a day with 17 hours of live programming. QVC-Italy distributes programming live for 17 hours a day on satellite and digital terrestrial television and an additional seven hours a day of recorded programming on satellite and seven hours a day of general interest programming on digital terrestrial television.

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 recorded as equity in losses of investee in the condensed consolidated statements of operations.

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.

We are an indirect wholly owned subsidiary of Liberty Interactive Corporation ("Liberty") (Nasdaq: LINTA, LINTB, LVNTA and LVNTB), 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 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.

Strategies and challenges of business units

QVC's goal is to become the preeminent global multimedia shopping community for people who love to shop, and to offer a shopping experience that is as much about entertainment and enrichment as it is about buying. QVC's objective is to provide an integrated shopping experience that utilizes all forms of media including television, the internet and mobile devices. In 2013, QVC intends to employ several strategies to achieve these goals and objectives. Among these strategies are to (i) extend the breadth, relevance and exposure of the QVC brand; (ii) source products that represent unique quality and value; (iii) create engaging presentation content in televised programming, mobile and online; (iv) leverage customer loyalty and continue multi-platform expansion; and (v) create a compelling and differentiated customer experience. In addition, QVC expects to expand globally by leveraging its existing systems, infrastructure and skills in other countries around the world.

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QVC's televised shopping program is already received by substantially all the multichannel television households in the U.S., Germany and the U.K. QVC's future net revenue growth will primarily depend on international expansion, sales growth from e-commerce and mobile platforms, additions of new customers from households already receiving QVC's television programming and growth in sales to existing customers and new customers as a result of expansion of the programming reach of QVC-Japan and QVC-Italy. QVC's future net revenue may also be affected by (i) the willingness of cable television and direct-to-home satellite system operators to continue carrying QVC's programming service; (ii) QVC's ability to maintain favorable channel positioning, which may become more difficult due to governmental action or from distributors converting analog customers to digital; (iii) changes in television viewing habits because of personal video recorders, video-on-demand and internet video services; and (iv) general economic conditions.

In March 2013, QVC-US launched over-the-air broadcasting in designated US markets that can be accessed by any television household regardless of whether it subscribes to a paid television service. This will allow QVC-US to reach new customers who previously did not have access to the live television broadcast through other platforms.

The current economic downturn in certain regions of the world in which our subsidiaries and affiliates operate could adversely affect demand for our products and services since a substantial portion of our revenue is derived from discretionary spending by individuals, which typically falls during times of economic instability. Global financial markets continue to experience disruptions, including increased volatility and diminished liquidity and credit availability. In particular, the current European debt crisis, particularly most recently in Greece, Italy, Ireland, Portugal and Spain, and related European financial restricting efforts, may cause volatility in the European currencies and reduce the purchasing power of European customers. In the event that one or more countries were to replace the Euro with their legacy currency, then our revenue and operating results in such countries, or Europe generally, would likely be adversely affected until stable exchange rates were established and economic confidence restored. In addition, the European crisis is contributing to instability in global credit markets. The world has recently experienced a global macroeconomic downturn, and if economic and financial market conditions in the United States or other key markets, including Europe, remain uncertain, persist, or deteriorate further, our customers may respond by suspending, delaying, or reducing their discretionary spending. A suspension, delay or reduction in discretionary spending could adversely affect revenue. Accordingly, our ability to increase or maintain revenue and earnings could be adversely affected to the extent that relevant economic environments remain weak or decline further. Such weak economic conditions may also inhibit our expansion into new European and other markets. We currently are unable to predict the extent of any of these potential adverse effects.

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Results of Operations

QVC's operating results were as follows:

	Three months ended June 30,					Six months ended June 30,
(in millions)	2013			2012		2013		2012
Net revenue	$	1,961		1,974		3,935		3,906
Costs of goods sold	1,227			1,234		2,479		2,464
Gross profit	734			740		1,456		1,442
Operating expenses:
Operating	171			176		344		351
SG&A expenses (excluding stock‑based compensation)	129			126		274		263
Adjusted OIBDA	434			438		838		828
Stock-based compensation	9			8		19		13
Depreciation	33			33		63		64
Amortization of intangible assets	107			96		211		192
Operating income	285			301		545		559
Other (expense) income:
Equity in losses of investee	(2		)	—		(1	)	—
Gains on financial instruments	3			13		15		24
Interest expense	(50		)	(57	)	(113	)	(111	)
Foreign currency loss	—			(8	)	(1	)	(2	)
Loss on extinguishment of debt	(16		)	—		(57	)	—
	(65		)	(52	)	(157	)	(89	)
Income before income taxes	220			249		388		470
Income tax expense	(81		)	(92	)	(143	)	(174	)
Net income	139			157		245		296
Less net income attributable to the noncontrolling interest	(13		)	(15	)	(25	)	(29	)
Net income attributable to QVC, Inc. shareholder	$	126		142		220		267

Net revenue

Net revenue was generated in the following geographical areas:

	Three months ended June 30,			Six months ended June 30,
(in millions)	2013		2012	2013	2012
QVC-U.S.	$	1,312	1,280	2,609	2,520
QVC-Japan	260		310	516	599
QVC-Germany	207		210	457	457
QVC-U.K.	153		156	293	296
QVC-Italy	29		18	60	34
Consolidated QVC	$	1,961	1,974	3,935	3,906

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QVC's consolidated net revenue decreased 0.7% and increased 0.7% during the three and six month periods ended June 30, 2013, respectively, as compared to the corresponding periods in the prior year. The three month decrease in net revenue was primarily comprised of $60 million in unfavorable foreign currency rates primarily in Japan, and to a lesser extent, in the U.K., which were partially offset by favorable foreign currency rates in Germany and Italy. Additionally, net revenue was also negatively impacted by $24 million due to an increase in estimated product returns, primarily in Japan and Germany, due in part to a greater mix of apparel products that return at higher rates. These amounts were partially offset by $38 million due to a 1.7% increase in average selling price per unit (“ASP”) and $36 million due to a 1.6% increase in units sold. The six month increase in net revenue was primarily comprised of $132 million due to a 3.0% increase in ASP and $49 million due to a 1.1% increase in units sold. These amounts were partially offset by $103 million in unfavorable foreign currency rates primarily in Japan, and to a lesser extent, in the U.K., which were partially offset by favorable foreign currency rates in Germany and Italy. Additionally, net revenue was also negatively impacted by $45 million due to an increase in estimated product returns, primarily in Japan and Germany, due in part to a greater mix of apparel products that return at higher rates.

During the three and six month periods ended June 30, 2013, the changes in revenue and expenses were affected by changes in the exchange rates for the Japanese Yen, the Euro and the U.K. Pound Sterling. In the event the U.S. Dollar strengthens against these foreign currencies in the future, QVC's revenue and operating cash flow will be negatively affected.

The percentage increase (decrease) in net revenue for each of QVC's geographic areas in U.S. Dollars and in local currency was as follows:

	Three months ended June 30,				Six months ended June 30,
	2013				2013
	U.S. Dollars		Local currency		U.S. Dollars		Local currency
QVC-U.S.	2.5	%	2.5	%	3.5	%	3.5	%
QVC-Japan	(16.1	)%	3.1	%	(13.9	)%	3.2	%
QVC-Germany	(1.4	)%	(3.2	)%	—	%	(1.1	)%
QVC-U.K.	(1.9	)%	1.5	%	(1.0	)%	1.4	%
QVC-Italy	61.1	%	58.8	%	76.5	%	72.8	%

QVC-U.S.' growth in net revenue for the three months ended June 30, 2013 was primarily due to a 2.8% increase in ASP, partially offset by a 0.9% decrease in units shipped. QVC-U.S.' shipped sales increased mainly due to growth in the beauty and home categories. QVC-U.S.' growth in net revenue for the six months ended June 30, 2013 was primarily due to a 4.5% increase in ASP, partially offset by a 1.1% decrease in units shipped. QVC-U.S.' shipped sales increased mainly due to growth in the beauty and electronics categories. For the three and six month periods ended June 30, 2013, QVC-Japan's shipped sales growth in local currency was primarily related to the apparel category, which was somewhat offset by an increase in estimated product returns. For the three and six month periods ended June 30, 2013, QVC-Germany's shipped sales in local currency increased mainly due to greater apparel and accessories sales, which was more than offset by an increase in estimated product returns, primarily in apparel, but also across other categories. For the three and six month periods ended June 30, 2013, QVC-U.K.'s shipped sales growth in local currency was primarily related to the home and beauty categories. For the three and six month periods ended June 30, 2013, QVC-Italy's sales consisted primarily of cooking and dining, beauty and apparel products.

Gross profit

QVC's gross profit percentage was 37.4% and 37.0% for the three and six month periods ended June 30, 2013, respectively, compared to 37.5% and 36.9% for the three and six month periods ended June 30, 2012, respectively. The gross profit percentages remained relatively consistent for both periods presented compared to the prior year.

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Operating expenses

QVC's operating expenses are principally comprised of commissions, order processing and customer service expenses, credit card processing fees, telecommunications expenses and production costs. Operating expenses decreased $5 million or 2.8% and $7 million or 2.0% for the three and six month periods ended June 30, 2013, respectively, as compared to the corresponding periods in the prior year. For the three months ended June 30, 2013, the decrease was primarily due to a $6 million benefit of exchange rates, offset by a $1 million increase in credit card fees primarily as a result of the sales increase in the U.S. For the six months ended June 30, 2013, the decrease was primarily due to an $11 million benefit of exchange rates, offset by a $4 million increase in credit card fees primarily as a result of the sales increase in the U.S.

Selling, general and administrative expenses (excluding stock-based compensation)

QVC's SG&A expenses include personnel, information technology, provision for doubtful accounts, credit card income and marketing and advertising expenses. Such expenses increased from 6.4% to 6.6% and increased from 6.7% to 7.0% as a percentage of net revenue for the three and six month periods ended June 30, 2013, respectively. SG&A expenses increased $3 million and $11 million for the three and six month periods ended June 30, 2013, respectively, due to a variety of factors.

For the three months ended June 30, 2013, the change was primarily due to a $6 million increase in personnel expenses due to merit, benefits and bonus increases primarily in the U.S., a $3 million decrease in credit card income due to increased reserve requirements associated with the U.S. regulatory environment and an increase of $2 million in U.S. franchise taxes. These amounts were offset by a $4 million decrease in rent expense primarily related to lease cancellation costs in the U.K. that were incurred in the prior year related to QVC-U.K.'s move to its new headquarters as well as a $4 million benefit of exchange rates. For the six months ended June 30, 2013, the change was primarily due to a $20 million increase in personnel expenses due to merit, benefits and bonus increases primarily in the U.S., and to a lesser extent, in Germany. This amount was offset by a $3 million decrease in rent expense primarily related to lease cancellation costs in the U.K. that were incurred in the prior year related to QVC-U.K.'s move to its new headquarters as well as a $7 million benefit of exchange rates.

Stock-based compensation

Stock-based compensation includes compensation related to options and restricted stock granted to certain officers and employees. QVC recorded $9 million and $8 million of stock-based compensation expense for the three months ended June 30, 2013 and 2012, respectively, and $19 million and $13 million of stock-based compensation expense for the six months ended June 30, 2013 and 2012, respectively. The increase in stock-based compensation expense was primarily the result of a greater number of shares being expensed on a higher measurement basis and the one-time option exchange for certain officers in December 2012.

Depreciation and amortization

Depreciation and amortization consisted of the following:

	Three months ended June 30,			Six months ended June 30,
(in millions)	2013		2012	2013	2012
Affiliate agreements	$	37	38	75	76
Customer relationships	43		43	86	86
Acquisition related amortization	80		81	161	162
Property, plant and equipment	33		33	63	64
Software amortization	17		12	36	24
Channel placement amortization and related expenses and other	10		3	14	6
Total depreciation and amortization	$	140	129	274	256

Equity in losses of investee

The losses were associated with our joint venture in China that is accounted for as an equity method investment.

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Gains on financial instruments

In March 2013, QVC's notional interest rate swaps of $3.1 billion expired. These swap arrangements did not qualify as cash flow hedges under U.S. GAAP. Accordingly, changes in the fair value of the swaps were reflected in gain on financial instruments in the accompanying condensed consolidated statements of operations.

This financial statement line item also includes a gain that resulted from the reversal of a liability for contingent consideration associated with a previous acquisition.

Interest expense

For the three and six month periods ended June 30, 2013, consolidated interest expense decreased 12.3% and increased 1.8%, respectively, as compared to the corresponding periods in the prior year. For the three months ended June 30, 2013, the decrease was primarily due to lower average interest rates. For the six months ended June 30, 2013, the increase was primarily due to higher average debt balances outstanding.

Foreign currency loss

Certain loans between QVC and its subsidiaries are deemed to be short-term in nature, and accordingly, the translation of these loans is recorded on the statements of operations. The change in foreign currency loss was primarily due to variances in interest and operating payables balances between QVC and its international subsidiaries denominated in the currency of the subsidiary and the effects of currency exchange rate changes on those balances.

Loss on extinguishment of debt

During the first half of 2013, QVC redeemed $500 million of its 7.125% Senior Secured Notes due 2017 and $231 million of its 7.5% Senior Secured Notes due 2019. The increase was primarily due to premiums paid for the tenders and calls of these notes. Refer to note six to the accompanying condensed consolidated financial statements and the below section, "Financial Position, Liquidity and Capital Resources," for further details.

Income taxes

Our effective tax rate for the three and six month periods ended June 30, 2013 was 36.8% and 36.9%, respectively, and our effective tax rate for the three and six month periods ended June 30, 2012 was 36.9% and 37.0%, respectively. These rates differ from the U.S. federal income tax rate of 35.0% due primarily to state tax expense.

Adjusted Operating Income before Depreciation and Amortization (Adjusted OIBDA)

QVC defines Adjusted OIBDA as net revenue less cost of goods sold, operating expenses and selling, general and administrative expenses (excluding stock-based compensation). QVC's chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate the businesses and make decisions about allocating resources among the businesses. QVC believes that this is an important indicator of the operational strength and performance of the businesses, including the ability to service debt and fund capital expenditures. In addition, this measure allows QVC to view operating results, perform analytical comparisons and perform benchmarking among its businesses and identify strategies to improve performance. This measure of performance excludes such costs as depreciation, amortization and stock-based compensation that are included in the measurement of operating income pursuant to U.S. GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. GAAP.

The primary material limitations associated with the use of Adjusted OIBDA as compared to GAAP results are (i) it may not be comparable to similarly titled measures used by other companies in the industry, and (ii) it excludes financial information that some may consider important in evaluating QVC's performance. QVC compensates for these limitations by providing disclosure of the difference between Adjusted OIBDA and GAAP results, including providing a reconciliation of Adjusted OIBDA to GAAP results, to enable investors to perform their own analysis of QVC's operating results. Refer to note 11 to the accompanying condensed consolidated financial statements for a reconciliation of Adjusted OIBDA to Income before income taxes.

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Seasonality

QVC's business is seasonal due to a higher volume of sales in the fourth calendar quarter related to year-end holiday shopping. In recent years, QVC has earned on average between 22% and 23% of its revenue in each of the first three quarters of the year and 32% of its revenue in the fourth quarter of the year.

Financial Position, Liquidity and Capital Resources

General

Historically, QVC's primary sources of cash have been cash provided by operating activities and borrowings. In general, QVC uses this cash to fund its operations, make capital purchases, make payments to Liberty, make interest payments and minimize QVC's outstanding senior secured credit facility balance.

As of June 30, 2013, substantially all of QVC's cash and cash equivalents were invested in AAA rated money market funds and time deposits with banks rated equal to or above A.

Senior Secured Credit Facility

On March 1, 2013, we amended and restated our senior secured credit facility, which provides for a $2.0 billion revolving credit facility with a $250 million sub-limit for standby letters of credit and $1.0 billion of uncommitted incremental revolving loan commitments or incremental term loans. QVC may elect that the loans extended under the senior secured credit facility bear interest at a rate per annum equal to the ABR Rate or LIBOR, as each is defined in the senior secured credit facility agreement, plus a margin of 0.25% to 2.00% depending on various factors. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed availability. Any amounts prepaid on the revolving credit facility may be reborrowed. Payment of loans may be accelerated following certain customary events of default. The senior secured credit facility is a multi-currency facility. The senior secured credit facility is secured by the stock of QVC. We had $1.0 billion available under the terms of the senior secured credit facility at June 30, 2013.

The purpose of the amendment was to, among other things, extend the maturity of our senior secured credit facility to March 1, 2018 and lower the interest rate on borrowings.

The senior secured credit facility contains certain affirmative and negative covenants, including certain restrictions with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting QVC's ratio of consolidated total debt to consolidated Adjusted OIBDA.

Senior Secured Notes

On March 4, 2013, QVC announced the commencement of cash tender offers (the "Offers") for any and all of its outstanding $500 million in aggregate principal amount of 7.125% Senior Secured Notes due 2017 and up to $250 million in aggregate principal amount of its 7.5% Senior Secured Notes due 2019. On March 18, 2013, $124 million of the 7.125% Senior Secured Notes due 2017 were tendered pursuant to the Offers, whereby holders of the 7.125% Senior Secured Notes due 2017 received consideration of $1,039.40 for each $1,000 principal amount of tendered 7.125% Senior Secured Notes due 2017. On March 18, 2013, $231 million of the 7.5% Senior Secured Notes due 2019 were tendered pursuant to the Offers, whereby holders of the 7.5% Senior Secured Notes due 2019 received consideration of $1,120 for each $1,000 principal amount of tendered 7.5% Senior Secured Notes due 2019. On April 17, 2013, QVC completed the redemption of the remaining $376 million principal amount of its 7.125% Senior Secured Notes due 2017, whereby holders received consideration of $1,035.63 for each $1,000 principal amount of tendered 7.125% Senior Secured Notes due 2017.

I-34

On March 18, 2013, QVC issued $750 million principal amount of 4.375% Senior Secured Notes due 2023 at an issue price of 99.968% and issued $300 million principal amount of 5.95% Senior Secured Notes due 2043 at an issue price of 99.973%. These notes are secured by the stock of QVC, pari passu with the senior secured credit facility and QVC's existing notes. Interest is payable semi-annually.

The net proceeds from the issuance of these instruments were used to reduce the outstanding principal under QVC's existing 7.125% Senior Secured Notes due 2017, the 7.5% Senior Secured Notes due 2019 and the senior secured credit facility, as well as for general corporate purposes.

Additionally, as a result of these refinancing transactions, we incurred an extinguishment loss of $57 million for the six months ended June 30, 2013, recorded as loss on extinguishment of debt in the condensed consolidated statements of operations.

Interest Rate Swap Arrangements

In March 2013, QVC's notional interest rate swaps of $3.1 billion expired. These swap arrangements did not qualify as cash flow hedges under U.S. GAAP. Accordingly, changes in the fair value of the swaps were reflected in gain on financial instruments in the accompanying condensed consolidated statements of operations.

Other Debt Related Information

QVC was in compliance with all of its debt covenants at June 30, 2013.

During the quarter, there were no significant changes to QVC's debt credit ratings.

There are no restrictions under the debt agreements on QVC's ability to pay dividends or make other restricted payments if QVC is not in default on its senior secured notes or credit facility, and QVC's consolidated leverage ratio would be no greater than 3.25 to 1.0. As a result, Liberty will, in many instances, be permitted to rely on QVC's cash flow for servicing Liberty's debt and for other purposes, including repurchases of Liberty's common stock, or to fund acquisitions or other operational requirements of Liberty and its subsidiaries. These events may deplete QVC's equity or require QVC to borrow under the senior secured credit facility, increasing QVC's leverage and decreasing liquidity. QVC has made significant distributions to Liberty in the past.

Additional Cash Flow Information

During the six months ended June 30, 2013, QVC's primary uses of cash were $1,695 million of principal payments on debt and capital lease obligations, $765 million of net dividends to Liberty, $101 million of capital and cable and satellite television distribution rights expenditures, $46 million in premiums paid for the redemption of QVC's existing 7.125% Senior Secured Notes due 2017 and partial redemption of QVC's 7.5% Senior Secured Notes due 2019 and a $25 million dividend payment from QVC-Japan to Mitsui. These uses of cash were funded primarily with $1,053 million of principal borrowings on the senior secured credit facility, $1,050 million in proceeds from the issuance of the 4.375% Senior Secured Notes due 2023 and the 5.95% Senior Secured Notes due 2043 and $442 million of cash provided by operating activities. As of June 30, 2013, QVC's cash balance (excluding restricted cash) was $416 million.

During the six months ended June 30, 2012, QVC's primary uses of cash were $779 million of principal payments on debt and capital lease obligations, $458 million of dividends to Liberty, $103 million of capital and cable and satellite television distribution rights expenditures, a $29 million dividend payment from QVC-Japan to Mitsui and $27 million paid related to investments in joint ventures and acquisitions, net of cash received. These uses of cash were funded primarily with $648 million of principal borrowings on the senior secured credit facility and $643 million of cash provided by operating activities. As of June 30, 2012, QVC's cash balance (excluding restricted cash) was $446 million.

I-35

The change in cash provided by operating activities for the six months ended June 30, 2013 compared to the prior period was primarily due to variances in accrued liabilities balances. The change in accrued liabilities was primarily due to variances in taxes payable balances as a result of timing of payments.

As of June 30, 2013, $236 million of the $416 million in cash was held by foreign subsidiaries. Cash in foreign subsidiaries is generally accessible, but certain tax consequences may reduce the net amount of cash we are able to utilize for U.S. purposes. QVC accrues taxes on the unremitted earnings of its international subsidiaries. Approximately one-half of this foreign cash balance was that of QVC-Japan. QVC owns 60% of QVC-Japan and shares all profits and losses with the 40% minority interest holder, Mitsui. We believe that we currently have appropriate legal structures in place to repatriate foreign cash as tax efficiently as possible and meet the business needs of QVC.

Other

Capital expenditures spending in 2013 is expected to be approximately $230 million, including $75 million already expended.

Refer to the chart under the "Off-balance Sheet Arrangements and Aggregate Contractual Obligations" section below for additional information concerning the amount and timing of expected future payments under QVC's contractual obligations at June 30, 2013.

QVC has contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible QVC may incur losses upon the conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, that may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements.

Off-balance Sheet Arrangements and Aggregate Contractual Obligations

Information concerning the amount and timing of required payments, both accrued and off-balance sheet, under our contractual obligations at June 30, 2013 is summarized below:

	Payments due by period
(in millions)	Total		Less than 1 year	2-3 years	4-5 years	After 5 years
Long-term debt (1)	$	3,810	—	—	—	3,810
Interest payments(2)	1,848		95	380	380	993
Capital lease obligations (including imputed interest)	88		7	23	20	38
Operating lease obligations	162		12	30	19	101

(1) Amounts exclude capital lease obligations and the issue discounts on the 7.5%, 4.375% and 5.95% Senior Secured Notes.

(2) Amounts (i) are based on the terms of QVC's senior secured credit facility and senior secured notes, (ii) assumes the interest rates on the floating rate debt remain constant at the rates in effect as of June 30, 2013, (iii) assumes that our existing debt is repaid at maturity and (iv) excludes capital lease obligations.

Our purchase obligations did not materially change as of June 30, 2013.

Recent Accounting Pronouncements

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 QVC's condensed consolidated financial position, results of operations or cash flows.

I-36

Item 3. Quantitative and Qualitative Disclosures about Market Risk

QVC is exposed to market risk in the normal course of business due to ongoing investing and financial activities and the conduct of operations by subsidiaries in different foreign countries. Market risk refers to the risk of loss arising from adverse changes in stock prices, interest rates and foreign currency exchange rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. QVC has established procedures and internal processes governing the management of market risks and the use of financial instruments to manage exposure to such risks.

Interest rate risk

QVC is exposed to changes in interest rates primarily as a result of borrowing activities. QVC manages the exposure to interest rates by maintaining what QVC believes is an appropriate mix of fixed and variable rate debt. QVC believes this best protects itself from interest rate risk. As of June 30, 2013, QVC's debt, excluding capital leases and unamortized discounts, was comprised of $2.8 billion of fixed rate debt and $990 million of variable rate debt. The weighted average rate of all of QVC's variable rate debt was 1.7% and the weighted average rate of all of QVC's fixed rate debt (including capital leases) was 6.0% as of June 30, 2013.

In March 2013, QVC's notional interest rate swaps of $3.1 billion expired. These swap arrangements did not qualify as cash flow hedges under U.S. GAAP. Accordingly, changes in the fair value of the swaps were reflected in gain on financial instruments in the accompanying condensed consolidated statements of operations.

Foreign currency exchange rate risk

QVC is exposed to foreign exchange rate fluctuations related to the monetary assets and liabilities and the financial results of its foreign subsidiaries. Assets and liabilities of foreign subsidiaries for which the functional currency is the local currency are translated into U.S. Dollars at period-end exchange rates, and the statements of operations are translated at the average exchange rate for the period. Exchange rate fluctuations on translating foreign currency financial statements into U.S. Dollars that result in unrealized gains or losses are referred to as translation adjustments. Cumulative translation adjustments are recorded in other comprehensive income as a separate component of shareholder's equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in income as unrealized (based on period-end transactions) or realized upon settlement of the transactions. Cash flows from operations in foreign countries are translated at the average rate for the period. Accordingly, QVC may experience economic loss and a negative impact on earnings and equity with respect to its holdings solely as a result of foreign currency exchange rate fluctuations. QVC's reported Adjusted OIBDA for the three and six month periods ended June 30, 2013 would have been impacted by approximately $1 million and $2 million, respectively, for every 1% change in foreign currency exchange rates relative to the U.S. Dollar.

The credit facility provides QVC the ability to borrow in multiple currencies. This allows QVC to somewhat mitigate foreign currency exchange rate risks. As of June 30, 2013, QVC had borrowings of 5.5 billion Japanese Yen, equivalent to $55 million based on an exchange rate of 99.15 Japanese Yen per U.S. Dollar, outstanding under the credit facility. As of June 30, 2013, the foreign currency exchange exposure to these borrowings approximated $1 million for every 1% change in the Japanese Yen exchange rate per U.S. Dollar.

Item 4. Controls and Procedures

In accordance with Exchange Act Rules 13a-15(e) and 15d-15(e) ("the Exchange Act"), the Company carried out an evaluation, under the supervision and with the participation of management, including its chief executive officer and its principal accounting and financial officer (the "Executives"), of the effectiveness of its disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Executives concluded that the Company's disclosure controls and procedures were effective as of June 30, 2013 to provide reasonable assurance that information required to be disclosed in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

There has been no change in the Company's internal control over financial reporting that occurred during the three months ended June 30, 2013 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

I-37

PART II - OTHER INFORMATION

Item 6. Exhibits

(a) Exhibits

Listed below are the exhibits which are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):

31.1	Rule 13a-14(a)/15d-14(a) Certification*
31.2	Rule 13a-14(a)/15d-14(a) Certification*
32.1	Section 1350 Certification*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Calculation Linkbase Document**
101.LAB	XBRL Taxonomy Label Linkbase Document**
101.PRE	XBRL Taxonomy Presentation Linkbase Document**
101.DEF	XBRL Taxonomy Definition Document**

*Filed herewith.

**Furnished herewith.

II-1

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

QVC, Inc.

Date: August 7, 2013	By:/s/ MICHAEL A. GEORGE
	Michael A. George
	President and Chief Executive Officer (Principal Executive Officer)
Date: August 7, 2013	By:/s/ THADDEUS J. JASTRZEBSKI
	Thaddeus J. Jastrzebski
	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

II-2

EXHIBIT INDEX

Listed below are the exhibits which are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):

31.1	Rule 13a-14(a)/15d-14(a) Certification*
31.2	Rule 13a-14(a)/15d-14(a) Certification*
32.1	Section 1350 Certification*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Calculation Linkbase Document**
101.LAB	XBRL Taxonomy Label Linkbase Document**
101.PRE	XBRL Taxonomy Presentation Linkbase Document**
101.DEF	XBRL Taxonomy Definition Document**

*Filed herewith.

**Furnished herewith.

II-3

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael A. George, certify that:

1.I have reviewed this report on Form 10-Q of QVC, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 7, 2013

By:/s/ MICHAEL A. GEORGE

     Michael A. George

President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Thaddeus J. Jastrzebski, certify that:

1.I have reviewed this report on Form 10-Q of QVC, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 7, 2013

By:/s/ THADDEUS J. JASTRZEBSKI

Thaddeus J. Jastrzebski

Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of QVC, Inc., a Delaware corporation (the "Company"), does hereby certify, to such officer's knowledge, that:

The Report on Form 10-Q for the year ended June 30, 2013 (the "Form 10-Q") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 7, 2013	By:/s/ MICHAEL A. GEORGE
	Michael A. George
	President and Chief Executive Officer (Principal Executive Officer)
Date: August 7, 2013	By:/s/ THADDEUS J. JASTRZEBSKI
	Thaddeus J. Jastrzebski
	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document.

XML

Assets and Liabilities Measured at Fair Value

6 Months Ended

Jun. 30, 2013

Fair Value [Abstract]

Fair Value Disclosures

Assets and Liabilities Measured at Fair Value

For assets and liabilities required to be reported or disclosed at fair value, U.S. GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

The Company's assets and liabilities measured or disclosed at fair value were as follows:

			Fair value measurements at June 30, 2013 using
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Current assets:
Cash equivalents	$	325	325	—	—
Long-term liabilities:
Debt (note 6)	3,843		—	3,843	—

			Fair value measurements at December 31, 2012 using
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Curret assets:
Cash equivalents	$	424	424	—	—
Interest rate swap arrangements (note 6)	1		—	1	—
Current liabilities:
Interest rate swap arrangements (note 6)	13		—	13	—
Long-term liabilities
Debt (note 6)	3,626		—	3,626	—

The majority of the Company's Level 2 financial assets and liabilities are debt instruments with quoted market prices that are not considered to be traded on “active markets,” as defined in U.S. GAAP. Accordingly, the financial instruments are reported in the foregoing tables as Level 2 fair value instruments.

U.S. GAAP requires the incorporation of a credit risk valuation adjustment in the Company's fair value measurements to estimate the impact of both its own nonperformance risk and the nonperformance risk of its counterparties. The Company estimates credit risk associated with its own and its counterparties' nonperformance primarily by using observable credit default swap rates for terms similar to those of the remaining life of the instrument, adjusted for any master netting arrangements or other factors that provide an estimate of nonperformance risk. These are Level 3 inputs. However, as the credit risk valuation adjustments were not significant, the Company reported its interest rate swaps as Level 2. The counterparties to the Company's interest rate swap arrangements were all major international financial institutions.

XML

Guarantor/Non-Guarantor Subsidiary Financial Information (Narrative) (Details)	Jun. 30, 2013
Guarantor Non-guarantor Subsidiary Financial Information [Abstract]
Subsidiary Guarantors, Ownership Percentage	100.00%

XML

Condensed Consolidated Statements of Operations (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net revenue	$ 1,961	$ 1,974	$ 3,935	$ 3,906
Cost of goods sold	1,227	1,234	2,479	2,464
Gross profit	734	740	1,456	1,442
Operating expenses:
Operating	171	176	344	351
Selling, general and administrative, including stock-based compensation	138	134	293	276
Depreciation	33	33	63	64
Amortization of intangible assets	107	96	211	192
Operating expenses	449	439	911	883
Operating income	285	301	545	559
Other (expense) income:
Equity in losses of investee	(2)	0	(1)	0
Gains on financial instruments	3	13	15	24
Interest expense	(50)	(57)	(113)	(111)
Foreign currency loss	0	(8)	(1)	(2)
Loss on extinguishment of debt	(16)	0	(57)	0
Nonoperating (expense) income	(65)	(52)	(157)	(89)
Income before income taxes	220	249	388	470
Income tax expense	(81)	(92)	(143)	(174)
Net income	139	157	245	296
Less net income attributable to the noncontrolling interest	(13)	(15)	(25)	(29)
Net income (loss) attributable to QVC, Inc. shareholder	$ 126	$ 142	$ 220	$ 267

XML

Goodwill

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill Disclosure

Goodwill

The changes in the carrying amount of goodwill were as follows:

(in millions)	QVC-U.S.		QVC-Japan		QVC-Germany		QVC-U.K.		QVC-Italy		Total
Balance as of December 31, 2012	$	4,190	349		334		212		149		5,234
Exchange rate fluctuations	—		(44	)	(4	)	(14	)	(2	)	(64	)
Balance as of June 30, 2013	$	4,190	305		330		198		147		5,170

XML

Goodwill (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying amount of goodwill were as follows:

(in millions)	QVC-U.S.		QVC-Japan		QVC-Germany		QVC-U.K.		QVC-Italy		Total
Balance as of December 31, 2012	$	4,190	349		334		212		149		5,234
Exchange rate fluctuations	—		(44	)	(4	)	(14	)	(2	)	(64	)
Balance as of June 30, 2013	$	4,190	305		330		198		147		5,170

XML

Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Comprehensive Income (Loss) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Condensed Financial Statements, Captions [Line Items]
Net income	$ 139	$ 157	$ 245	$ 296
Foreign currency translation adjustments	(16)	(49)	(107)	(36)
Total comprehensive income (loss)	123	108	138	260
Comprehensive (income) loss attributable to noncontrolling interest	(7)	(19)	(6)	(23)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	116	89	132	237
Parent company
Condensed Financial Statements, Captions [Line Items]
Net income	139	157	245	296
Foreign currency translation adjustments	(16)	(49)	(107)	(36)
Total comprehensive income (loss)	123	108	138	260
Comprehensive (income) loss attributable to noncontrolling interest	(7)	(19)	(6)	(23)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	116	89	132	237
Guarantor subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net income	67	87	146	161
Foreign currency translation adjustments	0	0	0	0
Total comprehensive income (loss)	67	87	146	161
Comprehensive (income) loss attributable to noncontrolling interest	0	0	0	0
Comprehensive income (loss) attributable to QVC, Inc. shareholder	67	87	146	161
Non-guarantor subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net income	(24)	7	(31)	2
Foreign currency translation adjustments	(16)	(49)	(107)	(36)
Total comprehensive income (loss)	(40)	(42)	(138)	(34)
Comprehensive (income) loss attributable to noncontrolling interest	(7)	(19)	(6)	(23)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	(47)	(61)	(144)	(57)
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net income	(43)	(94)	(115)	(163)
Foreign currency translation adjustments	16	49	107	36
Total comprehensive income (loss)	(27)	(45)	(8)	(127)
Comprehensive (income) loss attributable to noncontrolling interest	7	19	6	23
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$ (20)	$ (26)	$ (2)	$ (104)

XML

Information about QVC's Operating Segments

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure

Information about QVC's Operating Segments

Each of the Company's operating segments are retailers of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised-shopping programs as well as via the internet and mobile applications in certain markets. The Company has operations in the United States, Japan, Germany, the United Kingdom and Italy. As such, the Company has identified five reportable segments: the United States, Japan, Germany, the United Kingdom and Italy.

The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as net revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per subscriber equivalent. The Company defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). The Company believes this measure is an important indicator of the operational strength and performance of its segments, including the ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking among our businesses and identify strategies to improve performance. This measure of performance excludes depreciation, amortization and stock-based compensation, that are included in the measurement of operating income pursuant to U.S. GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with U.S. GAAP.

Performance measures

	Three months ended June 30,							Six months ended June 30,
	2013				2012			2013			2012
(in millions)	Net revenue		Adjusted OIBDA		Net revenue	Adjusted OIBDA		Net revenue	Adjusted OIBDA		Net revenue	Adjusted OIBDA
QVC-U.S.	$	1,312	320		1,280	315		2,609	611		2,520	585
QVC-Japan	260		57		310	70		516	111		599	133
QVC-Germany	207		35		210	39		457	78		457	85
QVC-U.K.	153		26		156	21		293	45		296	41
QVC-Italy	29		(4	)	18	(7	)	60	(7	)	34	(16	)
Consolidated QVC	$	1,961	434		1,974	438		3,935	838		3,906	828

Net revenue amounts by product category are not available from our general purpose financial statements.

Other information

	Three months ended June 30,					Six months ended June 30,
	2013			2012		2013		2012
(in millions)	Depreciation		Amortization	Depreciation	Amortization	Depreciation	Amortization	Depreciation	Amortization
QVC-U.S.	$	14	91	13	82	27	179	26	162
QVC-Japan	5		2	4	2	8	4	8	5
QVC-Germany	8		9	8	8	16	18	17	16
QVC-U.K.	5		3	7	3	9	6	10	6
QVC-Italy	1		2	1	1	3	4	3	3
Consolidated QVC	$	33	107	33	96	63	211	64	192

	June 30, 2013			December 31, 2012
(in millions)	Total assets		Capital expenditures	Total assets	Capital expenditures
QVC-U.S.	$	10,047	37	10,541	88
QVC-Japan	789		13	969	105
QVC-Germany	1,037		14	1,064	25
QVC-U.K.	585		6	619	22
QVC-Italy	252		5	245	6
Consolidated QVC	$	12,710	75	13,438	246

Long-lived assets, net of accumulated depreciation, by geographic area were as follows:

	June 30,		December 31,
(in millions)	2013		2012
QVC-U.S.	$	417	429
QVC-Japan	245		280
QVC-Germany	238		247
QVC-U.K.	116		128
QVC-Italy	45		47
Consolidated QVC	$	1,061	1,131

The following table provides a reconciliation of Adjusted OIBDA to income before income taxes:

	Three months ended June 30,					Six months ended June 30,
(in millions)	2013			2012		2013		2012
Adjusted OIBDA	$	434		438		838		828
Stock‑based compensation	(9		)	(8	)	(19	)	(13	)
Depreciation and amortization	(140		)	(129	)	(274	)	(256	)
Equity in losses of investee	(2		)	—		(1	)	—
Gains on financial instruments	3			13		15		24
Interest expense	(50		)	(57	)	(113	)	(111	)
Foreign currency loss	—			(8	)	(1	)	(2	)
Loss on extinguishment of debt	(16		)	—		(57	)	—
Income before income taxes	$	220		249		388		470

XML

Information about QVC's Operating Segments (Long-lived Assets by Segment) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Property, plant and equipment, net of accumulated depreciation	$ 1,061	$ 1,131
QVC-U.S.
Segment Reporting Information [Line Items]
Property, plant and equipment, net of accumulated depreciation	417	429
QVC-Japan
Segment Reporting Information [Line Items]
Property, plant and equipment, net of accumulated depreciation	245	280
QVC-Germany
Segment Reporting Information [Line Items]
Property, plant and equipment, net of accumulated depreciation	238	247
QVC-U.K.
Segment Reporting Information [Line Items]
Property, plant and equipment, net of accumulated depreciation	116	128
QVC-Italy
Segment Reporting Information [Line Items]
Property, plant and equipment, net of accumulated depreciation	$ 45	$ 47

XML

Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Cash Flow) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	$ 442	$ 643
Investing activities:
Capital expenditures, net	(75)	(101)	(246)
Expenditures for cable and satellite television distribution rights, net	(26)	(2)
Cash paid for joint ventures and acquisitions of businesses, net of cash received	0	(27)
Decrease in restricted cash	0	2
Changes in other noncurrent assets	1	1
Intercompany investing activities	0	0
Net cash used in investing activities	(100)	(127)
Financing activities:
Principal payments of debt and capital lease obligations	(1,695)	(779)
Principal borrowings of debt from senior secured credit facility	1,053	648
Proceeds from issuance of senior secured notes, net of original issue discount	1,050	0
Payment of debt origination fees	(16)	0
Payment of bond premium fees	(46)	0
Other financing activities	7	0
Dividends paid to Liberty, net	(765)	(458)
Dividend paid to noncontrolling interest	(25)	(29)
Net short-term intercompany debt (repayments) borrowings	0	0
Intercompany financing activities	0	0
Net cash used in financing activities	(437)	(618)
Effect of foreign exchange rate changes on cash and cash equivalents	(29)	(12)
Net decrease in cash and cash equivalents	(124)	(114)
Cash and cash equivalents, beginning of period	540	560	560
Cash and cash equivalents, end of period	416	446	540
Parent company
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	358	403
Investing activities:
Capital expenditures, net	(33)	(20)
Expenditures for cable and satellite television distribution rights, net	0	0
Cash paid for joint ventures and acquisitions of businesses, net of cash received		0
Decrease in restricted cash		2
Changes in other noncurrent assets	4	2
Intercompany investing activities	292	306
Net cash used in investing activities	263	290
Financing activities:
Principal payments of debt and capital lease obligations	(1,690)	(774)
Principal borrowings of debt from senior secured credit facility	1,053	648
Proceeds from issuance of senior secured notes, net of original issue discount	1,050
Payment of debt origination fees	(16)
Payment of bond premium fees	(46)
Other financing activities	7
Dividends paid to Liberty, net	(765)	(458)
Dividend paid to noncontrolling interest	0	0
Net short-term intercompany debt (repayments) borrowings	(138)	(45)
Intercompany financing activities	(143)	(64)
Net cash used in financing activities	(688)	(693)
Effect of foreign exchange rate changes on cash and cash equivalents	0	0
Net decrease in cash and cash equivalents	(67)	0
Cash and cash equivalents, beginning of period	75	3	3
Cash and cash equivalents, end of period	8	3
Guarantor subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	115	171
Investing activities:
Capital expenditures, net	0	(1)
Expenditures for cable and satellite television distribution rights, net	(25)	(1)
Cash paid for joint ventures and acquisitions of businesses, net of cash received		0
Decrease in restricted cash		0
Changes in other noncurrent assets	0	(1)
Intercompany investing activities	149	189
Net cash used in investing activities	124	186
Financing activities:
Principal payments of debt and capital lease obligations	0	0
Principal borrowings of debt from senior secured credit facility	0	0
Proceeds from issuance of senior secured notes, net of original issue discount	0
Payment of debt origination fees	0
Payment of bond premium fees	0
Other financing activities	0
Dividends paid to Liberty, net	0	0
Dividend paid to noncontrolling interest	0	0
Net short-term intercompany debt (repayments) borrowings	102	24
Intercompany financing activities	(342)	(441)
Net cash used in financing activities	(240)	(417)
Effect of foreign exchange rate changes on cash and cash equivalents	0	0
Net decrease in cash and cash equivalents	(1)	(60)
Cash and cash equivalents, beginning of period	165	223	223
Cash and cash equivalents, end of period	164	163
Non-guarantor subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	(31)	69
Investing activities:
Capital expenditures, net	(42)	(80)
Expenditures for cable and satellite television distribution rights, net	(1)	(1)
Cash paid for joint ventures and acquisitions of businesses, net of cash received		(27)
Decrease in restricted cash		0
Changes in other noncurrent assets	(3)	0
Intercompany investing activities	0	0
Net cash used in investing activities	(46)	(108)
Financing activities:
Principal payments of debt and capital lease obligations	(5)	(5)
Principal borrowings of debt from senior secured credit facility	0	0
Proceeds from issuance of senior secured notes, net of original issue discount	0
Payment of debt origination fees	0
Payment of bond premium fees	0
Other financing activities	0
Dividends paid to Liberty, net	0	0
Dividend paid to noncontrolling interest	(25)	(29)
Net short-term intercompany debt (repayments) borrowings	36	21
Intercompany financing activities	44	10
Net cash used in financing activities	50	(3)
Effect of foreign exchange rate changes on cash and cash equivalents	(29)	(12)
Net decrease in cash and cash equivalents	(56)	(54)
Cash and cash equivalents, beginning of period	300	334	334
Cash and cash equivalents, end of period	244	280
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	0	0
Investing activities:
Capital expenditures, net	0	0
Expenditures for cable and satellite television distribution rights, net	0	0
Cash paid for joint ventures and acquisitions of businesses, net of cash received		0
Decrease in restricted cash		0
Changes in other noncurrent assets	0	0
Intercompany investing activities	(441)	(495)
Net cash used in investing activities	(441)	(495)
Financing activities:
Principal payments of debt and capital lease obligations	0	0
Principal borrowings of debt from senior secured credit facility	0	0
Proceeds from issuance of senior secured notes, net of original issue discount	0
Payment of debt origination fees	0
Payment of bond premium fees	0
Other financing activities	0
Dividends paid to Liberty, net	0	0
Dividend paid to noncontrolling interest	0	0
Net short-term intercompany debt (repayments) borrowings	0	0
Intercompany financing activities	441	495
Net cash used in financing activities	441	495
Effect of foreign exchange rate changes on cash and cash equivalents	0	0
Net decrease in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of period	0	0	0
Cash and cash equivalents, end of period	$ 0	$ 0

XML

Other Intangible Assets, Net (Future Amortization Expense) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2013	$ 139
2014	268
2015	244
2016	196
2017	$ 121

XML

Long-Term Debt and Interest Rate Swap Arrangements (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Schedule of Debt

Long-term debt consisted of the following:

	June 30,			December 31,
(in millions)	2013			2012
7.125% Senior Secured Notes due 2017	$	—		500
7.5% Senior Secured Notes due 2019, net of original issue discount	760			988
7.375% Senior Secured Notes due 2020	500			500
5.125% Senior Secured Notes due 2022	500			500
4.375% Senior Secured Notes due 2023, net of original issue discount	750			—
5.95% Senior Secured Notes due 2043, net of original issue discount	300			—
Senior secured credit facility	990			903
Capital lease obligations	81			86
Total debt	3,881			3,477
Less current portion	(11		)	(12	)
Long-term portion of debt and capital lease obligations	$	3,870		3,465

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Accrued Liabilities [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30,		December 31,
(in millions)	2013		2012
Accounts payable non-trade	$	202	264
Accrued compensation and benefits	95		100
Deferred revenue	79		85
Allowance for sales returns	73		92
Accrued interest	49		50
Liability for consigned goods sold	48		56
Income taxes	40		154
Sales and other taxes	39		62
Other	66		92
	$	691	955

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Information about QVC's Operating Segments (Depreciation/Amortization by Segment) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Depreciation	$ 33	$ 33	$ 63	$ 64
Amortization of intangible assets	107	96	211	192
QVC-U.S.
Segment Reporting Information [Line Items]
Depreciation	14	13	27	26
Amortization of intangible assets	91	82	179	162
QVC-Japan
Segment Reporting Information [Line Items]
Depreciation	5	4	8	8
Amortization of intangible assets	2	2	4	5
QVC-Germany
Segment Reporting Information [Line Items]
Depreciation	8	8	16	17
Amortization of intangible assets	9	8	18	16
QVC-U.K.
Segment Reporting Information [Line Items]
Depreciation	5	7	9	10
Amortization of intangible assets	3	3	6	6
QVC-Italy
Segment Reporting Information [Line Items]
Depreciation	1	1	3	3
Amortization of intangible assets	$ 2	$ 1	$ 4	$ 3

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Cable and Satellite Television Distribution Rights, Net (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items]
Cable and satellite television distribution rights	$ 5,492		$ 5,492		$ 5,503
Less accumulated amortization	2,071		2,071		1,994
Amortization of intangible assets	107	96	211	192
Cable and satellite television distribution rights
Finite-lived and Indefinite-lived Intangible Assets by Major Class [Line Items]
Cable and satellite television distribution rights	2,276		2,276		2,304
Less accumulated amortization	(1,597)		(1,597)		(1,540)
Cable and satellite television distribution rights, net	679		679		764
Amortization of intangible assets	$ 44	$ 40	$ 86	$ 81

XML

Long-Term Debt and Interest Rate Swap Arrangements (Debt) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Debt and capital lease obligations	$ 3,881	$ 3,477
Current portion of debt and capital lease obligations	(11)	(12)
Long-term portion of debt and capital lease obligations	3,870	3,465
7.125% Senior Secured Notes due 2017
Debt Instrument [Line Items]
Debt and capital lease obligations	0	500
7.5% Senior Secured Notes due 2019, net of original issue discount
Debt Instrument [Line Items]
Debt and capital lease obligations	760	988
7.375% Senior Secured Notes due 2020
Debt Instrument [Line Items]
Debt and capital lease obligations	500	500
5.125% Senior Secured Notes due 2022
Debt Instrument [Line Items]
Debt and capital lease obligations	500	500
4.375% Senior Secured Notes due 2023, net of original issue discount
Debt Instrument [Line Items]
Debt and capital lease obligations	750	0
5.95% Senior Secured Notes due 2043, net of original issue discount
Debt Instrument [Line Items]
Debt and capital lease obligations	300	0
Senior secured credit facility
Debt Instrument [Line Items]
Debt and capital lease obligations	990	903
Capital lease obligations
Debt Instrument [Line Items]
Debt and capital lease obligations	$ 81	$ 86

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Information about QVC's Operating Segments (Reconciliation of Adjusted OIBDA to Income before Income Taxes) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting [Abstract]
Adjusted OIBDA	$ 434	$ 438	$ 838	$ 828
Stock‑based compensation	(9)	(8)	(19)	(13)
Depreciation and amortization	(140)	(129)	(274)	(256)
Equity in losses of investee	(2)	0	(1)	0
Gains on financial instruments	3	13	15	24
Interest expense	(50)	(57)	(113)	(111)
Foreign currency loss	0	(8)	(1)	(2)
Loss on extinguishment of debt	(16)	0	(57)	0
Income before income taxes	$ 220	$ 249	$ 388	$ 470

XML

Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2013

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The change in the component of accumulated other comprehensive income, net of taxes ("AOCI"), is summarized as follows:

(in millions)	Foreign currency translation adjustments			AOCI
Balance at January 1, 2012	$	194		194
Other comprehensive loss attributable to QVC, Inc. shareholder	(30		)	(30	)
Balance at June 30, 2012	164			164
Balance at January 1, 2013	$	186		186
Other comprehensive loss attributable to QVC, Inc. shareholder	(88		)	(88	)
Balance at June 30, 2013	98			98

Schedule of Component of Comprehensive Income (Loss)

The following table summarizes the tax effects related to the component of other comprehensive income:

(in millions)	Before-tax amount			Tax (expense) benefit		Net-of-tax amount
Three months ended June 30, 2013:
Foreign currency translation adjustments	$	(13	)	(3	)	(16	)
Other comprehensive loss	(13		)	(3	)	(16	)
Three months ended June 30, 2012:
Foreign currency translation adjustments	$	(65	)	16		(49	)
Other comprehensive (loss) income	(65		)	16		(49	)
Six months ended June 30, 2013:
Foreign currency translation adjustments	$	(129	)	22		(107	)
Other comprehensive (loss) income	(129		)	22		(107	)
Six months ended June 30, 2012:
Foreign currency translation adjustments	$	(48	)	12		(36	)
Other comprehensive (loss) income	(48		)	12		(36	)

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Liberty	Dec. 31, 2012 Liberty
Income Tax Disclosure [Line Items]
Income tax expense	$ (81)	$ (92)	$ (143)	$ (174)
Effective income tax rate	36.80%		36.90%
United States Federal Statutory Tax Rate	35.00%
Current tax payments due to related parties					$ 1	$ (70)

XML

Other Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2013

Other Intangible Assets [Abstract]

Schedule of Acquired Intangible Assets by Class

Other intangible assets consisted of the following:

	June 30, 2013				December 31, 2012
(in millions)	Gross cost		Accumulated amortization		Gross cost	Accumulated amortization
Purchased and internally developed software	$	574	(355	)	575	(352	)
Affiliate and customer relationships	2,438		(1,706	)	2,445	(1,624	)
Debt origination fees	52		(10	)	54	(18	)
Trademarks (indefinite life)	2,428		—		2,429	—
	$	5,492	(2,071	)	5,503	(1,994	)

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

As of June 30, 2013, the related amortization expense and interest expense for each of the next five years ended December 31 was as follows (in millions):

Remainder of 2013	$	139
2014	268
2015	244
2016	196
2017	121

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Net income	$ 245	$ 296
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in losses of investee	1	0
Deferred income taxes	(52)	(64)
Foreign currency loss	1	2
Depreciation	63	64
Amortization of intangible assets	211	192
Change in fair value of financial instruments and noncash interest	11	20
Loss on extinguishment of debt	57	0
Stock-based compensation	19	13
Change in other long-term liabilities	2	12
Effects of changes in working capital items	(94)	148
Net cash provided by operating activities	442	643
Investing activities:
Capital expenditures, net	(75)	(101)
Expenditures for cable and satellite television distribution rights, net	(26)	(2)
Cash paid for joint ventures and acquisitions of businesses, net of cash received	0	(27)
Decrease in restricted cash	0	2
Changes in other noncurrent assets	1	1
Net cash used in investing activities	(100)	(127)
Financing activities:
Principal payments of debt and capital lease obligations	(1,695)	(779)
Principal borrowings of debt from senior secured credit facility	1,053	648
Proceeds from issuance of senior secured notes, net of original issue discount	1,050	0
Payment of debt origination fees	(16)	0
Payment of bond premium fees	(46)	0
Other financing activities	7	0
Dividends paid to Liberty, net	(765)	(458)
Dividend paid to noncontrolling interest	(25)	(29)
Net cash used in financing activities	(437)	(618)
Effect of foreign exchange rate changes on cash and cash equivalents	(29)	(12)
Net decrease in cash and cash equivalents	(124)	(114)
Cash and cash equivalents, beginning of period	540	560
Cash and cash equivalents, end of period	416	446
Effects of changes in working capital items:
Decrease in accounts receivable	346	374
Increase in inventories	(51)	(19)
Increase in prepaid expenses	(11)	(4)
Decrease in accounts payable‑trade	(104)	(86)
Decrease in accrued liabilities and other	(274)	(117)
Effects of changes in working capital items	$ (94)	$ 148

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Basis of Presentation

6 Months Ended

Jun. 30, 2013

Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

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 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 distributes live programming 24 hours a day, QVC-Germany distributes its program 24 hours a day with 23 hours of live programming and QVC-U.K. distributes its program 24 hours a day with 17 hours of live programming. QVC-Italy distributes programming live for 17 hours a day on satellite and digital terrestrial television and an additional seven hours a day of recorded programming on satellite and seven hours a day of general interest programming on digital terrestrial television.

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 recorded as equity in losses of investee in the condensed consolidated statements of operations.

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. During the six months ended June 30, 2013 and 2012, QVC-Japan paid dividends to Mitsui of $25 million and $29 million, respectively.

We are an indirect wholly owned subsidiary of Liberty Interactive Corporation ("Liberty") (Nasdaq: LINTA, LINTB, LVNTA and LVNTB), 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 37% ownership interest in HSN, Inc., one of our two closest televised shopping competitors.

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.

The accompanying (a) condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and (b) 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 the instructions to Form 10-Q 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 condensed consolidated financial statements and notes thereto contained in QVC's Annual Report on Form 10-K for the year ended December 31, 2012.

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.

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, which amends Accounting Standards Codification ("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 QVC's condensed consolidated financial position, results of operations or cash flows.

Certain prior period amounts have been reclassified to conform with current period presentation.

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Other Intangible Assets, Net

6 Months Ended

Jun. 30, 2013

Other Intangible Assets [Abstract]

Intangible Assets Disclosure

Other Intangible Assets, Net

Other intangible assets consisted of the following:

	June 30, 2013				December 31, 2012
(in millions)	Gross cost		Accumulated amortization		Gross cost	Accumulated amortization
Purchased and internally developed software	$	574	(355	)	575	(352	)
Affiliate and customer relationships	2,438		(1,706	)	2,445	(1,624	)
Debt origination fees	52		(10	)	54	(18	)
Trademarks (indefinite life)	2,428		—		2,429	—
	$	5,492	(2,071	)	5,503	(1,994	)

Amortization expense for other intangible assets was $63 million and $56 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, amortization expense for other intangible assets was $125 million and $111 million, respectively.

As of June 30, 2013, the related amortization expense and interest expense for each of the next five years ended December 31 was as follows (in millions):

Remainder of 2013	$	139
2014	268
2015	244
2016	196
2017	121

XML

Cable and Satellite Television Distribution Rights, Net

6 Months Ended

Jun. 30, 2013

Cable and Satellite Television Distribution Rights [Abstract]

Cable and Satellite Television Distribution Rights, Net

Cable and Satellite Television Distribution Rights, Net

Cable and satellite television distribution rights consisted of the following:

	June 30,			December 31,
(in millions)	2013			2012
Cable and satellite television distribution rights	$	2,276		2,304
Less accumulated amortization	(1,597		)	(1,540	)
Cable and satellite television distribution rights, net	$	679		764

Amortization expense for cable and satellite television distribution rights was $44 million and $40 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, amortization expense for cable and satellite television distribution rights was $86 million and $81 million, respectively.

As of June 30, 2013, related amortization expense for each of the next five years ended December 31 was as follows (in millions):

Remainder of 2013	$	87
2014	168
2015	162
2016	161
2017	111

XML

Long-Term Debt and Interest Rate Swap Arrangements (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended				3 Months Ended			3 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Mar. 31, 2013	Dec. 31, 2012	Jun. 30, 2013 7.125% Senior Secured Notes due 2017	Mar. 31, 2013 7.125% Senior Secured Notes due 2017	Dec. 31, 2012 7.125% Senior Secured Notes due 2017	Mar. 31, 2013 7.5% Senior Secured Notes due 2019, net of original issue discount	Jun. 30, 2013 7.5% Senior Secured Notes due 2019, net of original issue discount	Dec. 31, 2012 7.5% Senior Secured Notes due 2019, net of original issue discount	Jun. 30, 2013 7.375% Senior Secured Notes due 2020	Dec. 31, 2012 7.375% Senior Secured Notes due 2020	Jun. 30, 2013 5.125% Senior Secured Notes due 2022	Dec. 31, 2012 5.125% Senior Secured Notes due 2022	Jun. 30, 2013 4.375% Senior Secured Notes due 2023, net of original issue discount	Dec. 31, 2012 4.375% Senior Secured Notes due 2023, net of original issue discount	Jun. 30, 2013 5.95% Senior Secured Notes due 2043, net of original issue discount	Dec. 31, 2012 5.95% Senior Secured Notes due 2043, net of original issue discount
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity	$ 2,000,000,000		$ 2,000,000,000
Line of credit facility standby letter of credit	250,000,000		250,000,000
Line of credit facility, uncommitted loan	1,000,000,000		1,000,000,000
Debt instrument lower range of basis spread on variable rate	0.25%		0.25%
Debt instrument higher range of basis spread on variable rate	2.00%		2.00%
Line of credit facility remaining borrowing capacity	1,000,000,000		1,000,000,000
Line of credit facility interest rate at period end	1.70%		1.70%
Principal amount of tender offer								500,000,000		250,000,000
Debt instrument interest rate stated percentage							7.125%				7.50%		7.375%		5.125%		4.375%		5.95%
Extinguishment of debt amount							376,000,000	124,000,000		231,000,000
Repurchase price of individual bonds including premium							1,035.63	1,039.40		1,120
Face value of individual bonds repurchased							1,000	1,000		1,000
Debt and capital lease obligations	3,881,000,000		3,881,000,000			3,477,000,000	0		500,000,000		760,000,000	988,000,000	500,000,000	500,000,000	500,000,000	500,000,000	750,000,000	0	300,000,000	0
Debt issuance price percentage																	99.968%		99.973%
Loss on extinguishment of debt	(16,000,000)	0	(57,000,000)	0
Notional amount of interest rate derivative instruments not designated as hedging instruments					3,100,000,000
Interest rate derivatives at fair value net						12,000,000
Interest rate derivative liabilities at fair value						13,000,000
Interest rate derivative assets at fair value						$ 1,000,000
Debt weighted average interest rate	4.90%		4.90%

XML

Leases and Transponder Service Agreements (Tables)

6 Months Ended

Jun. 30, 2013

Leases and Transponder Service Agreements [Abstract]

Future Minimum Lease Payments

Future minimum payments under noncancelable operating leases and capital transponder leases with initial terms of one year or more at June 30, 2013 consisted of the following:

(in millions)	Capital transponders		Operating leases
Remainder of 2013	$	7	12
2014	12		16
2015	11		14
2016	10		10
2017	10		9
Thereafter	38		101
Total	$	88	162

XML

Guarantor/Non-Guarantor Subsidiary Financial Information (Tables)

6 Months Ended

Jun. 30, 2013

Guarantor Non-guarantor Subsidiary Financial Information [Abstract]

Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Current Period

June 30, 2013
(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	$	8		164		244		—		416
Restricted cash	13			—		2		—		15
Accounts receivable, net	460			—		242		—		702
Inventories	687			—		264		—		951
Deferred income taxes	137			—		22		—		159
Prepaid expenses	21			—		40		—		61
Total current assets	1,326			164		814		—		2,304
Property, plant and equipment, net	242			64		755		—		1,061
Cable and satellite television distribution rights, net	—			554		125		—		679
Goodwill	4,169			—		1,001		—		5,170
Other intangible assets, net	1,206			2,049		166		—		3,421
Other noncurrent assets	10			—		65		—		75
Investments in subsidiaries	3,586			1,715		—		(5,301	)	—
Total assets	$	10,539		4,546		2,926		(5,301	)	12,710
Liabilities and equity
Current liabilities:
Current portion of debt and capital lease obligations	$	2		—		9		—		11
Accounts payable-trade	236			—		208		—		444
Accrued liabilities	232			45		414		—		691
Intercompany accounts (receivable) payable	(364		)	(309	)	673		—		—
Total current liabilities	106			(264	)	1,304		—		1,146
Long-term portion of debt and capital lease obligations	3,813			—		57		—		3,870
Deferred compensation	13			—		1		—		14
Deferred income taxes	417			944		(14	)	—		1,347
Other long-term liabilities	132			—		18		—		150
Total liabilities	4,481			680		1,366		—		6,527
Equity:
QVC, Inc. shareholder's equity	6,058			3,866		1,435		(5,301	)	6,058
Noncontrolling interest	—			—		125		—		125
Total equity	6,058			3,866		1,560		(5,301	)	6,183
Total liabilities and equity	$	10,539		4,546		2,926		(5,301	)	12,710

Guarantor Non-guarantor Subsidiary Financial Information, Balance Sheets, Prior Period

Condensed consolidated balance sheets

December 31, 2012
(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	$	75		165		300	—		540
Restricted cash	13			—		2	—		15
Accounts receivable, net	747			—		308	—		1,055
Inventories	691			—		218	—		909
Deferred income taxes	131			—		20	—		151
Prepaid expenses	19			—		34	—		53
Total current assets	1,676			165		882	—		2,723
Property, plant and equipment, net	247			67		817	—		1,131
Cable and satellite television distribution rights, net	—			618		146	—		764
Goodwill	4,169			—		1,065	—		5,234
Other intangible assets, net	1,280			2,049		180	—		3,509
Other noncurrent assets	14			—		63	—		77
Investments in subsidiaries	3,789			1,838		—	(5,627	)	—
Total assets	$	11,175		4,737		3,153	(5,627	)	13,438
Liabilities and equity
Current liabilities:
Current portion of debt and capital lease obligations	$	2		—		10	—		12
Accounts payable-trade	324			—		242	—		566
Accrued liabilities	402			106		447	—		955
Intercompany accounts (receivable) payable	(226		)	(411	)	637	—		—
Total current liabilities	502			(305	)	1,336	—		1,533
Long-term portion of debt and capital lease obligations	3,404			—		61	—		3,465
Deferred compensation	11			—		1	—		12
Deferred income taxes	431			964		15	—		1,410
Other long-term liabilities	137			17		30	—		184
Total liabilities	4,485			676		1,443	—		6,604
Equity:
QVC, Inc. shareholder's equity	6,690			4,061		1,566	(5,627	)	6,690
Noncontrolling interest	—			—		144	—		144
Total equity	6,690			4,061		1,710	(5,627	)	6,834
Total liabilities and equity	$	11,175		4,737		3,153	(5,627	)	13,438

Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Current Period

Six months ended June 30, 2013
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	2,752		365		1,277		(459	)	3,935
Cost of goods sold	1,690			49		860		(120	)	2,479
Gross profit	1,062			316		417		(339	)	1,456
Operating expenses:
Operating	92			93		159		—		344
Selling, general and administrative, including stock-based compensation	463			—		169		(339	)	293
Depreciation	19			3		41		—		63
Amortization of intangible assets	102			70		39		—		211
Intercompany management expense (income)	32			(7	)	(25	)	—		—
	708			159		383		(339	)	911
Operating income	354			157		34		—		545
Other income (expense):
Equity in losses of investee	—			—		(1	)	—		(1	)
Gains on financial instruments	12			—		3		—		15
Interest expense	(112		)	(1	)	—		—		(113	)
Foreign currency (loss) gain	(2		)	(1	)	2		—		(1	)
Loss on extinguishment of debt	(57		)	—		—		—		(57	)
Intercompany interest (expense) income	(7		)	25		(18	)	—		—
	(166		)	23		(14	)	—		(157	)
Income before income taxes	188			180		20		—		388
Income tax expense	(32		)	(60	)	(51	)	—		(143	)
Equity in earnings of subsidiaries, net of tax	89			26		—		(115	)	—
Net income (loss)	245			146		(31	)	(115	)	245
Less net income attributable to the noncontrolling interest	(25		)	—		(25	)	25		(25	)
Net income (loss) attributable to QVC, Inc. shareholder	$	220		146		(56	)	(90	)	220

Condensed consolidated statements of operations

Three months ended June 30, 2013
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	1,384		182		623		(228	)	1,961
Cost of goods sold	836			23		427		(59	)	1,227
Gross profit	548			159		196		(169	)	734
Operating expenses:
Operating	47			48		76		—		171
Selling, general and administrative, including stock-based compensation	227			—		80		(169	)	138
Depreciation	9			2		22		—		33
Amortization of intangible assets	51			36		20		—		107
Intercompany management expense (income)	15			(4	)	(11	)	—		—
	349			82		187		(169	)	449
Operating income	199			77		9		—		285
Other (expense) income:
Equity in losses of investee	—			—		(2	)	—		(2	)
Gains on financial instruments	—			—		3		—		3
Interest (expense) income	(50		)	(1	)	1		—		(50	)
Foreign currency (loss) gain	(1		)	—		1		—		—
Loss on extinguishment of debt	(16		)	—		—		—		(16	)
Intercompany interest (expense) income	(4		)	12		(8	)	—		—
	(71		)	11		(5	)	—		(65	)
Income before income taxes	128			88		4		—		220
Income tax expense	(21		)	(32	)	(28	)	—		(81	)
Equity in earnings of subsidiaries, net of tax	32			11		—		(43	)	—
Net income (loss)	139			67		(24	)	(43	)	139
Less net income attributable to the noncontrolling interest	(13		)	—		(13	)	13		(13	)
Net income (loss) attributable to QVC, Inc. shareholder	$	126		67		(37	)	(30	)	126

Guarantor Non-guarantor Subsidiary Financial Information, Statements of Operations, Prior Period

Condensed consolidated statements of operations

Three months ended June 30, 2012
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	1,352		182		670		(230	)	1,974
Cost of goods sold	830			27		437		(60	)	1,234
Gross profit	522			155		233		(170	)	740
Operating expenses:
Operating	45			47		84		—		176
Selling, general and administrative, including stock-based compensation	217			—		87		(170	)	134
Depreciation	9			1		23		—		33
Amortization of intangible assets	48			33		15		—		96
Intercompany management expense (income)	44			(18	)	(26	)	—		—
	363			63		183		(170	)	439
Operating income	159			92		50		—		301
Other income (expense):
Gains on financial instruments	12			—		1		—		13
Interest expense	(56		)	—		(1	)	—		(57	)
Foreign currency loss	(3		)	(5	)	—		—		(8	)
Intercompany interest (expense) income	(3		)	12		(9	)	—		—
	(50		)	7		(9	)	—		(52	)
Income before income taxes	109			99		41		—		249
Income tax expense	(29		)	(29	)	(34	)	—		(92	)
Equity in earnings of subsidiaries, net of tax	77			17		—		(94	)	—
Net income (loss)	157			87		7		(94	)	157
Less net income attributable to the noncontrolling interest	(15		)	—		(15	)	15		(15	)
Net income (loss) attributable to QVC, Inc. shareholder	$	142		87		(8	)	(79	)	142

Six months ended June 30, 2012
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	2,662		354		1,342		(452	)	3,906
Cost of goods sold	1,653			54		876		(119	)	2,464
Gross profit	1,009			300		466		(333	)	1,442
Operating expenses:
Operating	88			92		171		—		351
Selling, general and administrative, including stock-based compensation	440			—		169		(333	)	276
Depreciation	17			2		45		—		64
Amortization of intangible assets	96			65		31		—		192
Intercompany management expense (income)	40			(15	)	(25	)	—		—
	681			144		391		(333	)	883
Operating income	328			156		75		—		559
Other income (expense):
Gains on financial instruments	24			—		—		—		24
Interest expense	(111		)	—		—		—		(111	)
Foreign currency (loss) gain	(5		)	—		3		—		(2	)
Intercompany interest (expense) income	(6		)	25		(19	)	—		—
	(98		)	25		(16	)	—		(89	)
Income before income taxes	230			181		59		—		470
Income tax expense	(63		)	(54	)	(57	)	—		(174	)
Equity in earnings of subsidiaries, net of tax	129			34		—		(163	)	—
Net income (loss)	296			161		2		(163	)	296
Less net income attributable to the noncontrolling interest	(29		)	—		(29	)	29		(29	)
Net income (loss) attributable to QVC, Inc. shareholder	$	267		161		(27	)	(134	)	267

Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Current Year

Six months ended June 30, 2013
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	245		146	(31	)	(115	)	245
Foreign currency translation adjustments	(107		)	—	(107	)	107		(107	)
Total comprehensive income (loss)	138			146	(138	)	(8	)	138
Comprehensive (income) loss attributable to noncontrolling interest	(6		)	—	(6	)	6		(6	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$	132		146	(144	)	(2	)	132

Condensed consolidated statements of comprehensive income (loss)

Three months ended June 30, 2013
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	139		67	(24	)	(43	)	139
Foreign currency translation adjustments	(16		)	—	(16	)	16		(16	)
Total comprehensive income (loss)	123			67	(40	)	(27	)	123
Comprehensive (income) loss attributable to noncontrolling interest	(7		)	—	(7	)	7		(7	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	116			67	(47	)	(20	)	116

Guarantor Non-guarantor Subsidiary Financial Information, Comprehensive Income (Loss), Prior Year

Six months ended June 30, 2012
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	296		161	2		(163	)	296
Foreign currency translation adjustments	(36		)	—	(36	)	36		(36	)
Total comprehensive income (loss)	260			161	(34	)	(127	)	260
Comprehensive (income) loss attributable to noncontrolling interest	(23		)	—	(23	)	23		(23	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$	237		161	(57	)	(104	)	237

Three months ended June 30, 2012
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	157		87	7		(94	)	157
Foreign currency translation adjustments	(49		)	—	(49	)	49		(49	)
Total comprehensive income (loss)	108			87	(42	)	(45	)	108
Comprehensive (income) loss attributable to noncontrolling interest	(19		)	—	(19	)	19		(19	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	89			87	(61	)	(26	)	89

Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Current Year

Condensed consolidated statements of cash flows

Six months ended June 30, 2013
(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 (used in) operating activities	$	358		115		(31	)	—		442
Investing activities:
Capital expenditures, net	(33		)	—		(42	)	—		(75	)
Expenditures for cable and satellite television distribution rights, net	—			(25	)	(1	)	—		(26	)
Changes in other noncurrent assets	4			—		(3	)	—		1
Intercompany investing activities	292			149		—		(441	)	—
Net cash provided by (used in) investing activities	263			124		(46	)	(441	)	(100	)
Financing activities:
Principal payments of debt and capital lease obligations	(1,690		)	—		(5	)	—		(1,695	)
Principal borrowings of debt from senior secured credit facility	1,053			—		—		—		1,053
Proceeds from issuance of senior secured notes, net of original issue discount	1,050			—		—		—		1,050
Payment of debt origination fees	(16		)	—		—		—		(16	)
Payment of bond premium fees	(46		)	—		—		—		(46	)
Other financing activities	7			—		—		—		7
Dividends paid to Liberty, net	(765		)	—		—		—		(765	)
Dividend paid to noncontrolling interest	—			—		(25	)	—		(25	)
Net short-term intercompany debt (repayments) borrowings	(138		)	102		36		—		—
Intercompany financing activities	(143		)	(342	)	44		441		—
Net cash (used in) provided by financing activities	(688		)	(240	)	50		441		(437	)
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		(29	)	—		(29	)
Net decrease in cash and cash equivalents	(67		)	(1	)	(56	)	—		(124	)
Cash and cash equivalents, beginning of period	75			165		300		—		540
Cash and cash equivalents, end of period	$	8		164		244		—		416

Guarantor Non-guarantor Subsidiary Financial Information, Schedule of Cash Flows, Prior Year

Condensed consolidated statements of cash flows

Six months ended June 30, 2012
(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	$	403		171		69		—		643
Investing activities:
Capital expenditures, net	(20		)	(1	)	(80	)	—		(101	)
Expenditures for cable and satellite television distribution rights, net	—			(1	)	(1	)	—		(2	)
Cash paid for joint ventures and acquisitions of businesses, net of cash received	—			—		(27	)	—		(27	)
Decrease in restricted cash	2			—		—		—		2
Changes in other noncurrent assets	2			(1	)	—		—		1
Intercompany investing activities	306			189		—		(495	)	—
Net cash provided by (used in) investing activities	290			186		(108	)	(495	)	(127	)
Financing activities:
Principal payments of debt and capital lease obligations	(774		)	—		(5	)	—		(779	)
Principal borrowings of debt from senior secured credit facility	648			—		—		—		648
Dividends paid to Liberty, net	(458		)	—		—		—		(458	)
Dividend paid to noncontrolling interest	—			—		(29	)	—		(29	)
Net short-term intercompany debt (repayments) borrowings	(45		)	24		21		—		—
Intercompany financing activities	(64		)	(441	)	10		495		—
Net cash used in financing activities	(693		)	(417	)	(3	)	495		(618	)
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		(12	)	—		(12	)
Net decrease in cash and cash equivalents	—			(60	)	(54	)	—		(114	)
Cash and cash equivalents, beginning of period	3			223		334		—		560
Cash and cash equivalents, end of period	$	3		163		280		—		446

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Other Intangible Assets, Net (Other Intangible Assets) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Gross cost
Purchased and internally developed software	$ 574		$ 574		$ 575
Affiliate and customer relationships	2,438		2,438		2,445
Debt origination fees	52		52		54
Trademarks (indefinite life)	2,428		2,428		2,429
Other intangible assets (excluding goodwill), gross	5,492		5,492		5,503
Accumulated amortization
Purchased and internally developed software	(355)		(355)		(352)
Affiliate and customer relationships	(1,706)		(1,706)		(1,624)
Debt origination fees	(10)		(10)		(18)
Other intangible assets (excluding goodwill), accumulated amortization	(2,071)		(2,071)		(1,994)
Amortization of other intangible assets	$ 63	$ 56	$ 125	$ 111

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Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Operations) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Condensed Financial Statements, Captions [Line Items]
Net revenue	$ 1,961	$ 1,974	$ 3,935	$ 3,906
Cost of goods sold	1,227	1,234	2,479	2,464
Gross profit	734	740	1,456	1,442
Operating expenses:
Operating	171	176	344	351
Selling, general and administrative, including stock-based compensation	138	134	293	276
Depreciation	33	33	63	64
Amortization of intangible assets	107	96	211	192
Intercompany management expense (income)	0	0	0	0
Operating expenses	449	439	911	883
Operating income	285	301	545	559
Other (expense) income:
Equity in losses of investee	(2)	0	(1)	0
Gains on financial instruments	3	13	15	24
Interest expense	(50)	(57)	(113)	(111)
Foreign currency loss	0	(8)	(1)	(2)
Loss on extinguishment of debt	(16)	0	(57)	0
Intercompany interest (expense) income	0	0	0	0
Nonoperating (expense) income	(65)	(52)	(157)	(89)
Income before income taxes	220	249	388	470
Income tax expense	(81)	(92)	(143)	(174)
Equity in earnings of subsidiaries, net of tax	0	0	0	0
Net income	139	157	245	296
Less net income attributable to the noncontrolling interest	(13)	(15)	(25)	(29)
Net income (loss) attributable to QVC, Inc. shareholder	126	142	220	267
Parent company
Condensed Financial Statements, Captions [Line Items]
Net revenue	1,384	1,352	2,752	2,662
Cost of goods sold	836	830	1,690	1,653
Gross profit	548	522	1,062	1,009
Operating expenses:
Operating	47	45	92	88
Selling, general and administrative, including stock-based compensation	227	217	463	440
Depreciation	9	9	19	17
Amortization of intangible assets	51	48	102	96
Intercompany management expense (income)	15	44	32	40
Operating expenses	349	363	708	681
Operating income	199	159	354	328
Other (expense) income:
Equity in losses of investee	0		0
Gains on financial instruments	0	12	12	24
Interest expense	(50)	(56)	(112)	(111)
Foreign currency loss	(1)	(3)	(2)	(5)
Loss on extinguishment of debt	(16)		(57)
Intercompany interest (expense) income	(4)	(3)	(7)	(6)
Nonoperating (expense) income	(71)	(50)	(166)	(98)
Income before income taxes	128	109	188	230
Income tax expense	(21)	(29)	(32)	(63)
Equity in earnings of subsidiaries, net of tax	32	77	89	129
Net income	139	157	245	296
Less net income attributable to the noncontrolling interest	(13)	(15)	(25)	(29)
Net income (loss) attributable to QVC, Inc. shareholder	126	142	220	267
Guarantor subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net revenue	182	182	365	354
Cost of goods sold	23	27	49	54
Gross profit	159	155	316	300
Operating expenses:
Operating	48	47	93	92
Selling, general and administrative, including stock-based compensation	0	0	0	0
Depreciation	2	1	3	2
Amortization of intangible assets	36	33	70	65
Intercompany management expense (income)	(4)	(18)	(7)	(15)
Operating expenses	82	63	159	144
Operating income	77	92	157	156
Other (expense) income:
Equity in losses of investee	0		0
Gains on financial instruments	0	0	0	0
Interest expense	(1)	0	(1)	0
Foreign currency loss	0	(5)	(1)	0
Loss on extinguishment of debt	0		0
Intercompany interest (expense) income	12	12	25	25
Nonoperating (expense) income	11	7	23	25
Income before income taxes	88	99	180	181
Income tax expense	(32)	(29)	(60)	(54)
Equity in earnings of subsidiaries, net of tax	11	17	26	34
Net income	67	87	146	161
Less net income attributable to the noncontrolling interest	0	0	0	0
Net income (loss) attributable to QVC, Inc. shareholder	67	87	146	161
Non-guarantor subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net revenue	623	670	1,277	1,342
Cost of goods sold	427	437	860	876
Gross profit	196	233	417	466
Operating expenses:
Operating	76	84	159	171
Selling, general and administrative, including stock-based compensation	80	87	169	169
Depreciation	22	23	41	45
Amortization of intangible assets	20	15	39	31
Intercompany management expense (income)	(11)	(26)	(25)	(25)
Operating expenses	187	183	383	391
Operating income	9	50	34	75
Other (expense) income:
Equity in losses of investee	(2)		(1)
Gains on financial instruments	3	1	3	0
Interest expense	1	(1)	0	0
Foreign currency loss	1	0	2	3
Loss on extinguishment of debt	0		0
Intercompany interest (expense) income	(8)	(9)	(18)	(19)
Nonoperating (expense) income	(5)	(9)	(14)	(16)
Income before income taxes	4	41	20	59
Income tax expense	(28)	(34)	(51)	(57)
Equity in earnings of subsidiaries, net of tax	0	0	0	0
Net income	(24)	7	(31)	2
Less net income attributable to the noncontrolling interest	(13)	(15)	(25)	(29)
Net income (loss) attributable to QVC, Inc. shareholder	(37)	(8)	(56)	(27)
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net revenue	(228)	(230)	(459)	(452)
Cost of goods sold	(59)	(60)	(120)	(119)
Gross profit	(169)	(170)	(339)	(333)
Operating expenses:
Operating	0	0	0	0
Selling, general and administrative, including stock-based compensation	(169)	(170)	(339)	(333)
Depreciation	0	0	0	0
Amortization of intangible assets	0	0	0	0
Intercompany management expense (income)	0	0	0	0
Operating expenses	(169)	(170)	(339)	(333)
Operating income	0	0	0	0
Other (expense) income:
Equity in losses of investee	0		0
Gains on financial instruments	0	0	0	0
Interest expense	0	0	0	0
Foreign currency loss	0	0	0	0
Loss on extinguishment of debt	0		0
Intercompany interest (expense) income	0	0	0	0
Nonoperating (expense) income	0	0	0	0
Income before income taxes	0	0	0	0
Income tax expense	0	0	0	0
Equity in earnings of subsidiaries, net of tax	(43)	(94)	(115)	(163)
Net income	(43)	(94)	(115)	(163)
Less net income attributable to the noncontrolling interest	13	15	25	29
Net income (loss) attributable to QVC, Inc. shareholder	$ (30)	$ (79)	$ (90)	$ (134)

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Other Comprehensive Income (Accumulated Other Comprehensive Income) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	$ 186	$ 194
Other comprehensive loss attributable to QVC, Inc. shareholder	(88)	(30)
Ending balance	$ 98	$ 164

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Information about QVC's Operating Segments (Revenue and Adjusted OIBDA by Segment) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting Information [Line Items]
Net revenue	$ 1,961	$ 1,974	$ 3,935	$ 3,906
Adjusted OIBDA	434	438	838	828
QVC-U.S.
Segment Reporting Information [Line Items]
Net revenue	1,312	1,280	2,609	2,520
Adjusted OIBDA	320	315	611	585
QVC-Japan
Segment Reporting Information [Line Items]
Net revenue	260	310	516	599
Adjusted OIBDA	57	70	111	133
QVC-Germany
Segment Reporting Information [Line Items]
Net revenue	207	210	457	457
Adjusted OIBDA	35	39	78	85
QVC-U.K.
Segment Reporting Information [Line Items]
Net revenue	153	156	293	296
Adjusted OIBDA	26	21	45	41
QVC-Italy
Segment Reporting Information [Line Items]
Net revenue	29	18	60	34
Adjusted OIBDA	$ (4)	$ (7)	$ (7)	$ (16)

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Millions, except Per Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Allowance for D/A	$ 75	$ 74
Accumulated depreciation	$ 884	$ 866
Common stock par value	$ 0.01	$ 0.01

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Leases and Transponder Service Agreements

6 Months Ended

Jun. 30, 2013

Leases and Transponder Service Agreements [Abstract]

Leases of Lessee Disclosure

Leases and Transponder Service Arrangements

Future minimum payments under noncancelable operating leases and capital transponder leases with initial terms of one year or more at June 30, 2013 consisted of the following:

(in millions)	Capital transponders		Operating leases
Remainder of 2013	$	7	12
2014	12		16
2015	11		14
2016	10		10
2017	10		9
Thereafter	38		101
Total	$	88	162

The Company has entered into ten separate agreements with transponder suppliers to transmit its signals in the U.S., Germany and the U.K. via various satellites at an aggregate monthly cost of $1 million. Depreciation expense related to the transponders was $3 million and $3 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, depreciation expense related to the transponders was $6 million and $7 million, respectively. Total future minimum capital lease payments of $88 million include $7 million of imputed interest. Our transponder service agreement for our U.S. transponders expires at the earlier of the end of the lives of the satellites or the service agreement, which are currently estimated to be either 2019 or 2020, respectively. Our transponder service agreements for our international transponders expire between 2013 and 2022.

Expenses for operating leases, principally for data processing equipment and facilities and for satellite uplink service agreements, amounted to $6 million and $10 million for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013 and 2012, expenses for operating leases were $14 million and $17 million, respectively.

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Condensed Consolidated Statements of Comprehensive Income Statement (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net income	$ 139	$ 157	$ 245	$ 296
Foreign currency translation adjustments	(16)	(49)	(107)	(36)
Total comprehensive income (loss)	123	108	138	260
Comprehensive (income) loss attributable to noncontrolling interest	(7)	(19)	(6)	(23)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$ 116	$ 89	$ 132	$ 237

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 416	$ 540
Restricted cash	15	15
Accounts receivable, less allowance for doubtful accounts of $75 million at June 30, 2013 and $74 million at December 31, 2012	702	1,055
Inventories	951	909
Deferred income taxes	159	151
Prepaid expenses	61	53
Total current assets	2,304	2,723
Noncurrent assets:
Property, plant and equipment, net of accumulated depreciation of $884 million at June 30, 2013 and $866 million at December 31, 2012	1,061	1,131
Cable and satellite television distribution rights, net	679	764
Goodwill	5,170	5,234
Other intangible assets, net	3,421	3,509
Other noncurrent assets	75	77
Total assets	12,710	13,438
Current liabilities:
Current portion of debt and capital lease obligations	11	12
Accounts payable-trade	444	566
Accrued liabilities	691	955
Total current liabilities	1,146	1,533
Noncurrent liabilities:
Long-term portion of debt and capital lease obligations	3,870	3,465
Deferred compensation	14	12
Deferred income taxes	1,347	1,410
Other long-term liabilities	150	184
Total liabilities	6,527	6,604
QVC, Inc. shareholder's equity:
Common stock, $0.01 par value	0	0
Additional paid-in capital	6,685	6,665
Accumulated deficit	(725)	(161)
Accumulated other comprehensive income	98	186
Total QVC, Inc. shareholder's equity	6,058	6,690
Noncontrolling interest	125	144
Total equity	6,183	6,834
Total liabilities and equity	$ 12,710	$ 13,438

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Other Comprehensive Income (Component of Other Comprehensive Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Foreign currency transaction and translation gain (loss) before tax	$ (13)	$ (65)	$ (129)	$ (48)
Tax (expense) benefit from foreign currency translation gain (loss)	(3)	16	22	12
Foreign currency translation adjustments, net-of-tax	$ (16)	$ (49)	$ (107)	$ (36)

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Assets and Liabilities Measured at Fair Value (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The Company's assets and liabilities measured or disclosed at fair value were as follows:

			Fair value measurements at June 30, 2013 using
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Current assets:
Cash equivalents	$	325	325	—	—
Long-term liabilities:
Debt (note 6)	3,843		—	3,843	—

			Fair value measurements at December 31, 2012 using
(in millions)	Total		Quoted prices in active markets for identical assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)
Curret assets:
Cash equivalents	$	424	424	—	—
Interest rate swap arrangements (note 6)	1		—	1	—
Current liabilities:
Interest rate swap arrangements (note 6)	13		—	13	—
Long-term liabilities
Debt (note 6)	3,626		—	3,626	—

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Cable and Satellite Television Distribution Rights, Net (Tables)

6 Months Ended

Jun. 30, 2013

Cable and Satellite Television Distribution Rights [Abstract]

Schedule of Cable and Satellite Television Distribution Rights

Cable and satellite television distribution rights consisted of the following:

	June 30,			December 31,
(in millions)	2013			2012
Cable and satellite television distribution rights	$	2,276		2,304
Less accumulated amortization	(1,597		)	(1,540	)
Cable and satellite television distribution rights, net	$	679		764

Schedule of Expected Amortization Expense

As of June 30, 2013, related amortization expense for each of the next five years ended December 31 was as follows (in millions):

Remainder of 2013	$	87
2014	168
2015	162
2016	161
2017	111

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Assets and Liabilities Measured at Fair Value (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Curret assets:
Interest rate swap arrangements (note 6)		$ 1
Current liabilities:
Interest rate swap arrangements (note 6)		13
Recurring
Curret assets:
Cash equivalents	325	424
Interest rate swap arrangements (note 6)		1
Current liabilities:
Interest rate swap arrangements (note 6)		13
Long-term liabilities
Debt (note 6)	3,843	3,626
Recurring | Level 1
Curret assets:
Cash equivalents	325	424
Recurring | Level 2
Curret assets:
Interest rate swap arrangements (note 6)		1
Current liabilities:
Interest rate swap arrangements (note 6)		13
Long-term liabilities
Debt (note 6)	$ 3,843	$ 3,626

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Guarantor/Non-Guarantor Subsidiary Financial Information (Statement of Financial Position) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents, beginning of period	$ 416	$ 540	$ 446	$ 560
Restricted cash	15	15
Accounts receivable, net	702	1,055
Inventories	951	909
Deferred income taxes	159	151
Prepaid expenses	61	53
Total current assets	2,304	2,723
Noncurrent assets:
Property, plant and equipment, net	1,061	1,131
Cable and satellite television distribution rights, net	679	764
Goodwill	5,170	5,234
Other intangible assets, net	3,421	3,509
Other noncurrent assets	75	77
Investments in subsidiaries	0	0
Total assets	12,710	13,438
Current liabilities:
Current portion of debt and capital lease obligations	11	12
Accounts payable-trade	444	566
Accrued liabilities	691	955
Intercompany accounts (receivable) payable	0	0
Total current liabilities	1,146	1,533
Noncurrent liabilities:
Long-term portion of debt and capital lease obligations	3,870	3,465
Deferred compensation	14	12
Deferred income taxes	1,347	1,410
Other long-term liabilities	150	184
Total liabilities	6,527	6,604
QVC, Inc. shareholder's equity:
QVC, Inc. shareholder's equity	6,058	6,690
Noncontrolling interest	125	144
Total equity	6,183	6,834
Total liabilities and equity	12,710	13,438
Parent company
Current assets:
Cash and cash equivalents, beginning of period	8	75	3	3
Restricted cash	13	13
Accounts receivable, net	460	747
Inventories	687	691
Deferred income taxes	137	131
Prepaid expenses	21	19
Total current assets	1,326	1,676
Noncurrent assets:
Property, plant and equipment, net	242	247
Cable and satellite television distribution rights, net	0	0
Goodwill	4,169	4,169
Other intangible assets, net	1,206	1,280
Other noncurrent assets	10	14
Investments in subsidiaries	3,586	3,789
Total assets	10,539	11,175
Current liabilities:
Current portion of debt and capital lease obligations	2	2
Accounts payable-trade	236	324
Accrued liabilities	232	402
Intercompany accounts (receivable) payable	(364)	(226)
Total current liabilities	106	502
Noncurrent liabilities:
Long-term portion of debt and capital lease obligations	3,813	3,404
Deferred compensation	13	11
Deferred income taxes	417	431
Other long-term liabilities	132	137
Total liabilities	4,481	4,485
QVC, Inc. shareholder's equity:
QVC, Inc. shareholder's equity	6,058	6,690
Noncontrolling interest	0	0
Total equity	6,058	6,690
Total liabilities and equity	10,539	11,175
Guarantor subsidiaries
Current assets:
Cash and cash equivalents, beginning of period	164	165	163	223
Restricted cash	0	0
Accounts receivable, net	0	0
Inventories	0	0
Deferred income taxes	0	0
Prepaid expenses	0	0
Total current assets	164	165
Noncurrent assets:
Property, plant and equipment, net	64	67
Cable and satellite television distribution rights, net	554	618
Goodwill	0	0
Other intangible assets, net	2,049	2,049
Other noncurrent assets	0	0
Investments in subsidiaries	1,715	1,838
Total assets	4,546	4,737
Current liabilities:
Current portion of debt and capital lease obligations	0	0
Accounts payable-trade	0	0
Accrued liabilities	45	106
Intercompany accounts (receivable) payable	(309)	(411)
Total current liabilities	(264)	(305)
Noncurrent liabilities:
Long-term portion of debt and capital lease obligations	0	0
Deferred compensation	0	0
Deferred income taxes	944	964
Other long-term liabilities	0	17
Total liabilities	680	676
QVC, Inc. shareholder's equity:
QVC, Inc. shareholder's equity	3,866	4,061
Noncontrolling interest	0	0
Total equity	3,866	4,061
Total liabilities and equity	4,546	4,737
Non-guarantor subsidiaries
Current assets:
Cash and cash equivalents, beginning of period	244	300	280	334
Restricted cash	2	2
Accounts receivable, net	242	308
Inventories	264	218
Deferred income taxes	22	20
Prepaid expenses	40	34
Total current assets	814	882
Noncurrent assets:
Property, plant and equipment, net	755	817
Cable and satellite television distribution rights, net	125	146
Goodwill	1,001	1,065
Other intangible assets, net	166	180
Other noncurrent assets	65	63
Investments in subsidiaries	0	0
Total assets	2,926	3,153
Current liabilities:
Current portion of debt and capital lease obligations	9	10
Accounts payable-trade	208	242
Accrued liabilities	414	447
Intercompany accounts (receivable) payable	673	637
Total current liabilities	1,304	1,336
Noncurrent liabilities:
Long-term portion of debt and capital lease obligations	57	61
Deferred compensation	1	1
Deferred income taxes	(14)	15
Other long-term liabilities	18	30
Total liabilities	1,366	1,443
QVC, Inc. shareholder's equity:
QVC, Inc. shareholder's equity	1,435	1,566
Noncontrolling interest	125	144
Total equity	1,560	1,710
Total liabilities and equity	2,926	3,153
Eliminations
Current assets:
Cash and cash equivalents, beginning of period	0	0	0	0
Restricted cash	0	0
Accounts receivable, net	0	0
Inventories	0	0
Deferred income taxes	0	0
Prepaid expenses	0	0
Total current assets	0	0
Noncurrent assets:
Property, plant and equipment, net	0	0
Cable and satellite television distribution rights, net	0	0
Goodwill	0	0
Other intangible assets, net	0	0
Other noncurrent assets	0	0
Investments in subsidiaries	(5,301)	(5,627)
Total assets	(5,301)	(5,627)
Current liabilities:
Current portion of debt and capital lease obligations	0	0
Accounts payable-trade	0	0
Accrued liabilities	0	0
Intercompany accounts (receivable) payable	0	0
Total current liabilities	0	0
Noncurrent liabilities:
Long-term portion of debt and capital lease obligations	0	0
Deferred compensation	0	0
Deferred income taxes	0	0
Other long-term liabilities	0	0
Total liabilities	0	0
QVC, Inc. shareholder's equity:
QVC, Inc. shareholder's equity	(5,301)	(5,627)
Noncontrolling interest	0	0
Total equity	(5,301)	(5,627)
Total liabilities and equity	$ (5,301)	$ (5,627)

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Accrued Liabilities (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Accrued Liabilities [Abstract]
Accounts payable non-trade	$ 202	$ 264
Accrued compensation and benefits	95	100
Deferred revenue	79	85
Allowance for sales returns	73	92
Accrued interest	49	50
Liability for consigned goods sold	48	56
Income taxes	40	154
Sales and other taxes	39	62
Other	66	92
Accrued liabilities	$ 691	$ 955

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Cable and Satellite Television Distribution Rights, Net (Future Amortization Expense) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2013
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2014	$ 268
2015	244
2016	196
2017	121
Cable and satellite television distribution rights
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of 2013	87
2014	168
2015	162
2016	161
2017	$ 111

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Goodwill (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Goodwill [Roll Forward]
Balance as of December 31, 2012	$ 5,234
Exchange rate fluctuations	(64)
Balance as of June 30, 2013	5,170
QVC-U.S.
Goodwill [Roll Forward]
Balance as of December 31, 2012	4,190
Exchange rate fluctuations	0
Balance as of June 30, 2013	4,190
QVC-Japan
Goodwill [Roll Forward]
Balance as of December 31, 2012	349
Exchange rate fluctuations	(44)
Balance as of June 30, 2013	305
QVC-Germany
Goodwill [Roll Forward]
Balance as of December 31, 2012	334
Exchange rate fluctuations	(4)
Balance as of June 30, 2013	330
QVC-U.K.
Goodwill [Roll Forward]
Balance as of December 31, 2012	212
Exchange rate fluctuations	(14)
Balance as of June 30, 2013	198
QVC-Italy
Goodwill [Roll Forward]
Balance as of December 31, 2012	149
Exchange rate fluctuations	(2)
Balance as of June 30, 2013	$ 147

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Long-Term Debt and Interest Rate Swap Arrangements

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt Disclosure

Long-Term Debt and Interest Rate Swap Arrangements

Long-term debt consisted of the following:

	June 30,			December 31,
(in millions)	2013			2012
7.125% Senior Secured Notes due 2017	$	—		500
7.5% Senior Secured Notes due 2019, net of original issue discount	760			988
7.375% Senior Secured Notes due 2020	500			500
5.125% Senior Secured Notes due 2022	500			500
4.375% Senior Secured Notes due 2023, net of original issue discount	750			—
5.95% Senior Secured Notes due 2043, net of original issue discount	300			—
Senior secured credit facility	990			903
Capital lease obligations	81			86
Total debt	3,881			3,477
Less current portion	(11		)	(12	)
Long-term portion of debt and capital lease obligations	$	3,870		3,465

Senior Secured Credit Facility

On March 1, 2013, we amended and restated our senior secured credit facility, which provides for a $2.0 billion revolving credit facility with a $250 million sub-limit for standby letters of credit and $1.0 billion of uncommitted incremental revolving loan commitments or incremental term loans. QVC may elect that the loans extended under the senior secured credit facility bear interest at a rate per annum equal to the ABR Rate or LIBOR, as each is defined in the senior secured credit facility agreement, plus a margin of 0.25% to 2.00% depending on various factors. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. Any amounts prepaid on the revolving credit facility may be reborrowed. Payment of loans may be accelerated following certain customary events of default. The senior secured credit facility is a multi-currency facility. The senior secured credit facility is secured by the stock of QVC. We had $1.0 billion available under the terms of the senior secured credit facility at June 30, 2013. The interest rate on the senior secured credit facility was 1.7% at June 30, 2013.

The purpose of the amendment was to, among other things, extend the maturity of our senior secured credit facility to March 1, 2018 and lower the interest rate on borrowings.

The senior secured credit facility contains certain affirmative and negative covenants, including certain restrictions with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting QVC's ratio of consolidated total debt to consolidated Adjusted OIBDA.

Senior Secured Notes

On March 4, 2013, QVC announced the commencement of cash tender offers (the "Offers") for any and all of its outstanding $500 million in aggregate principal amount of 7.125% Senior Secured Notes due 2017 and up to $250 million in aggregate principal amount of its 7.5% Senior Secured Notes due 2019. On March 18, 2013, $124 million of the 7.125% Senior Secured Notes due 2017 were tendered pursuant to the Offers, whereby holders of the 7.125% Senior Secured Notes due 2017 received consideration of $1,039.40 for each $1,000 principal amount of tendered 7.125% Senior Secured Notes due 2017. On March 18, 2013, $231 million of the 7.5% Senior Secured Notes due 2019 were tendered pursuant to the Offers, whereby holders of the 7.5% Senior Secured Notes due 2019 received consideration of $1,120 for each $1,000 principal amount of tendered 7.5% Senior Secured Notes due 2019. On April 17, 2013, QVC completed the redemption of the remaining $376 million principal amount of its 7.125% Senior Secured Notes due 2017, whereby holders received consideration of $1,035.63 for each $1,000 principal amount of tendered 7.125% Senior Secured Notes due 2017.

On March 18, 2013, QVC issued $750 million principal amount of 4.375% Senior Secured Notes due 2023 at an issue price of 99.968% and issued $300 million principal amount of 5.95% Senior Secured Notes due 2043 at an issue price of 99.973%. These notes are secured by the stock of QVC, pari passu with the senior secured credit facility and QVC's existing notes. Interest is payable semi-annually.

The net proceeds from the issuance of these instruments were used to reduce the outstanding principal under QVC's existing 7.125% Senior Secured Notes due 2017, the 7.5% Senior Secured Notes due 2019 and the senior secured credit facility, as well as for general corporate purposes.

Additionally, as a result of these refinancing transactions, we incurred an extinguishment loss of $57 million for the six months ended June 30, 2013, recorded as loss on extinguishment of debt in the condensed consolidated statements of operations.

Interest Rate Swap Arrangements

In March 2013, QVC's notional interest rate swaps of $3.1 billion expired. These swap arrangements did not qualify as cash flow hedges under U.S. GAAP. Accordingly, changes in the fair value of the swaps were reflected in gain on financial instruments in the accompanying condensed consolidated statements of operations.

At December 31, 2012, the fair value of the swap instruments was a net liability position of $12 million, of which $13 million was included in accrued liabilities, offset by $1 million included in prepaid expenses in the condensed consolidated balance sheet.

Other Debt Related Information

QVC was in compliance with all of its debt covenants at June 30, 2013.

During the quarter, there were no significant changes to QVC's debt credit ratings.

The weighted average rate applicable to all of the outstanding debt (excluding capital leases) was 4.9% as of June 30, 2013.

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Information about QVC's Operating Segments (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Schedule of Revenue and Adjusted OIBDA by Segment

Performance measures

	Three months ended June 30,							Six months ended June 30,
	2013				2012			2013			2012
(in millions)	Net revenue		Adjusted OIBDA		Net revenue	Adjusted OIBDA		Net revenue	Adjusted OIBDA		Net revenue	Adjusted OIBDA
QVC-U.S.	$	1,312	320		1,280	315		2,609	611		2,520	585
QVC-Japan	260		57		310	70		516	111		599	133
QVC-Germany	207		35		210	39		457	78		457	85
QVC-U.K.	153		26		156	21		293	45		296	41
QVC-Italy	29		(4	)	18	(7	)	60	(7	)	34	(16	)
Consolidated QVC	$	1,961	434		1,974	438		3,935	838		3,906	828

Schedule of Depreciation and Amortization by Segment

	Three months ended June 30,					Six months ended June 30,
	2013			2012		2013		2012
(in millions)	Depreciation		Amortization	Depreciation	Amortization	Depreciation	Amortization	Depreciation	Amortization
QVC-U.S.	$	14	91	13	82	27	179	26	162
QVC-Japan	5		2	4	2	8	4	8	5
QVC-Germany	8		9	8	8	16	18	17	16
QVC-U.K.	5		3	7	3	9	6	10	6
QVC-Italy	1		2	1	1	3	4	3	3
Consolidated QVC	$	33	107	33	96	63	211	64	192

Schedule of Capital Expenditures and Total Assets by Segment

	June 30, 2013			December 31, 2012
(in millions)	Total assets		Capital expenditures	Total assets	Capital expenditures
QVC-U.S.	$	10,047	37	10,541	88
QVC-Japan	789		13	969	105
QVC-Germany	1,037		14	1,064	25
QVC-U.K.	585		6	619	22
QVC-Italy	252		5	245	6
Consolidated QVC	$	12,710	75	13,438	246

Long-Lived Assets by Segment

Long-lived assets, net of accumulated depreciation, by geographic area were as follows:

	June 30,		December 31,
(in millions)	2013		2012
QVC-U.S.	$	417	429
QVC-Japan	245		280
QVC-Germany	238		247
QVC-U.K.	116		128
QVC-Italy	45		47
Consolidated QVC	$	1,061	1,131

Reconciliation of Adjusted OIBDA to Income before Income Taxes

The following table provides a reconciliation of Adjusted OIBDA to income before income taxes:

	Three months ended June 30,					Six months ended June 30,
(in millions)	2013			2012		2013		2012
Adjusted OIBDA	$	434		438		838		828
Stock‑based compensation	(9		)	(8	)	(19	)	(13	)
Depreciation and amortization	(140		)	(129	)	(274	)	(256	)
Equity in losses of investee	(2		)	—		(1	)	—
Gains on financial instruments	3			13		15		24
Interest expense	(50		)	(57	)	(113	)	(111	)
Foreign currency loss	—			(8	)	(1	)	(2	)
Loss on extinguishment of debt	(16		)	—		(57	)	—
Income before income taxes	$	220		249		388		470

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Leases and Transponder Service Agreements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Capital transponders
Remainder of 2013	$ 7		$ 7
2014	12		12
2015	11		11
2016	10		10
2017	10		10
Thereafter	38		38
Total	88		88
Operating leases
Remainder of 2013	12		12
2014	16		16
2015	14		14
2016	10		10
2017	9		9
Thereafter	101		101
Total	162		162
Capital transponder monthly lease expense	1		1
Capital leases income statement amortization expense	3	3	6	7
Imputed interest on capital lease	7		7
Operating leases rent expense net	$ 6	$ 10	$ 14	$ 17

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company has contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that the amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements.

Network and information systems, including the internet and telecommunication systems, third party delivery services and other technologies are critical to our business activities. Substantially all our customer orders, fulfillment and delivery services are dependent upon the use of network and information systems, including the use of third party telecommunication and delivery service providers. If information systems including the internet or telecommunication services are disrupted, or if the third party delivery services experience a disruption in their transportation delivery services, we could face a significant disruption in fulfilling our customer orders and shipment of our products. We have active disaster recovery programs in place to help mitigate risks associated with these critical business activities.

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Accrued Liabilities

6 Months Ended

Jun. 30, 2013

Accrued Liabilities [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following:

	June 30,		December 31,
(in millions)	2013		2012
Accounts payable non-trade	$	202	264
Accrued compensation and benefits	95		100
Deferred revenue	79		85
Allowance for sales returns	73		92
Accrued interest	49		50
Liability for consigned goods sold	48		56
Income taxes	40		154
Sales and other taxes	39		62
Other	66		92
	$	691	955

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Condensed Consolidated Statement of Equity (USD $) In Millions, except Share data, unless otherwise specified	Total	Common stock	Additional paid-in capital	Accumulated deficit	Accumulated other comprehensive income	Noncontrolling interest
Balance, December 31, 2012 at Dec. 31, 2012	$ 6,834	$ 0	$ 6,665	$ (161)	$ 186	$ 144
Balance, January 1, 2013 (in shares) at Dec. 31, 2012		1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	245		0	220	0	25
Other comprehensive (expense) income:
Foreign currency translation adjustments	(107)		0	0	(88)	(19)
Dividend paid to Liberty and other	(815)		(6)	(784)	0	(25)
Tax benefit resulting from exercise of employee stock options	7		7	0	0	0
Stock‑based compensation	19		19	0	0	0
Balance, June 30, 2013 at Jun. 30, 2013	$ 6,183	$ 0	$ 6,685	$ (725)	$ 98	$ 125
Balance, June 30, 2013 (in shares) at Jun. 30, 2013		1

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Subsequent Events (Details) (Liberty, USD $) In Millions, unless otherwise specified	3 Months Ended
	Jun. 30, 2013
Liberty
Subsequent Event [Line Items]
Subsequent event dividend to parent	$ 83

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Information about QVC's Operating Segments (Total Assets and CAPEX by Segment) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Segment Reporting Information [Line Items]
Assets	$ 12,710		$ 13,438
Net capital expenditures	75	101	246
QVC-U.S.
Segment Reporting Information [Line Items]
Assets	10,047		10,541
Net capital expenditures	37		88
QVC-Japan
Segment Reporting Information [Line Items]
Assets	789		969
Net capital expenditures	13		105
QVC-Germany
Segment Reporting Information [Line Items]
Assets	1,037		1,064
Net capital expenditures	14		25
QVC-U.K.
Segment Reporting Information [Line Items]
Assets	585		619
Net capital expenditures	6		22
QVC-Italy
Segment Reporting Information [Line Items]
Assets	252		245
Net capital expenditures	$ 5		$ 6

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Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
General business information
Dividend paid to noncontrolling interest	$ 25	$ 29
Live Programming - U.S.
General business information
Hours of distribution per day	24 hours
Days per year of programming	364 days
Live Programming - Japan
General business information
Hours of distribution per day	24 hours
Distribution - Germany
General business information
Hours of distribution per day	24 hours
Live Programming - Germany
General business information
Hours of distribution per day	23 hours
Distribution - U.K.
General business information
Hours of distribution per day	24 hours
Live Programming - U.K.
General business information
Hours of distribution per day	17 hours
Live Programming - Italy
General business information
Hours of distribution per day	17 hours
Recorded Programming - Italy
General business information
Hours of distribution per day	7 hours
Live Programming - CNRS
General business information
Hours of distribution per day	12 hours
Recorded Programming - CNRS
General business information
Hours of distribution per day	12 hours
CNR Home Shopping Co., Ltd.
General business information
Equity method investment, ownership percentage	49.00%
QVC-Japan
General business information
Investment owned, percent of net assets	60.00%
Noncontrolling interest, ownership percentage by noncontrolling owners	40.00%
HSN, Inc.
General business information
Parent ownership in equity investment	37.00%

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Other Comprehensive Income

6 Months Ended

Jun. 30, 2013

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Comprehensive Income (Loss)

Other Comprehensive Income

The change in the component of accumulated other comprehensive income, net of taxes ("AOCI"), is summarized as follows:

(in millions)	Foreign currency translation adjustments			AOCI
Balance at January 1, 2012	$	194		194
Other comprehensive loss attributable to QVC, Inc. shareholder	(30		)	(30	)
Balance at June 30, 2012	164			164
Balance at January 1, 2013	$	186		186
Other comprehensive loss attributable to QVC, Inc. shareholder	(88		)	(88	)
Balance at June 30, 2013	98			98

The component of other comprehensive income is reflected in QVC's condensed consolidated statements of comprehensive income, net of taxes. The following table summarizes the tax effects related to the component of other comprehensive income:

(in millions)	Before-tax amount			Tax (expense) benefit		Net-of-tax amount
Three months ended June 30, 2013:
Foreign currency translation adjustments	$	(13	)	(3	)	(16	)
Other comprehensive loss	(13		)	(3	)	(16	)
Three months ended June 30, 2012:
Foreign currency translation adjustments	$	(65	)	16		(49	)
Other comprehensive (loss) income	(65		)	16		(49	)
Six months ended June 30, 2013:
Foreign currency translation adjustments	$	(129	)	22		(107	)
Other comprehensive (loss) income	(129		)	22		(107	)
Six months ended June 30, 2012:
Foreign currency translation adjustments	$	(48	)	12		(36	)
Other comprehensive (loss) income	(48		)	12		(36	)

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Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

The Company calculates its interim income tax provision by applying its best estimate of the annual expected effective tax rate to its ordinary year-to-date income or loss. The tax or benefit related to significant, unusual or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on the prior quarters is included in the tax expense for the current quarter.

For the three months ended June 30, 2013, the Company recorded a tax provision of $81 million, which represented an effective tax rate of 36.8%. For the six months ended June 30, 2013, the Company recorded a tax provision of $143 million, which represented an effective tax rate of 36.9%. These rates differ from the U.S. federal income tax rate of 35.0% due primarily to state tax expense.

The Company's tax years 2013 and 2012 are currently under examination by the Internal Revenue Service. The Company files Federal tax returns on a consolidated basis with its parent company, Liberty. The Company, or one of its subsidiaries, files income tax returns in various states and foreign jurisdictions. As of June 30, 2013, the Company, or one of its subsidiaries, was under examination in California, Minnesota, New Jersey, New York, New York City and Pennsylvania, as well as in Germany and the U.K.

The amounts of the tax-related balances due from (to) Liberty at June 30, 2013 and December 31, 2012 were $1 million and $(70) million, respectively, and were included in accrued liabilities in the accompanying condensed consolidated balance sheets.

The Company entered into a Tax Liability Allocation and Indemnification Agreement (the “Agreement”), dated April 26, 2004, with Liberty. The Agreement establishes the methodology for the calculation and payment of income taxes in connection with the consolidation of the Company with Liberty for income tax purposes. Generally, the Agreement provides that the Company will pay Liberty an amount equal to the tax liability, if any, that it would have if it were to file as a consolidated group separate and apart from Liberty, with exceptions for the treatment and timing of certain items, including but not limited to deferred intercompany transactions, credits, and net operating and capital losses. To the extent that the separate company tax expense is different from the payment terms of the Agreement, the difference is recorded as either a dividend or capital contribution.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2013

Basis of Presentation [Abstract]

Consolidation policy

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.

The accompanying (a) condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and (b) 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 the instructions to Form 10-Q 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 condensed consolidated financial statements and notes thereto contained in QVC's Annual Report on Form 10-K for the year ended December 31, 2012.

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.

New accounting pronouncements policy

In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-02, which amends Accounting Standards Codification ("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 QVC's condensed consolidated financial position, results of operations or cash flows.

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Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

QVC declared and paid cash dividends to Liberty in the amount of $83 million subsequent to June 30, 2013.

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Document and Entity Information Document	3 Months Ended
	Jun. 30, 2013
Document Information [Abstract]
Entity Registrant Name	QVC INC
Entity Central Index Key	0001254699
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	1
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Current Reporting Status submitted electronically	Yes

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Guarantor/Non-Guarantor Subsidiary Financial Information

6 Months Ended

Jun. 30, 2013

Guarantor Non-guarantor Subsidiary Financial Information [Abstract]

Guarantor Non-guarantor Subsidiary Financial Information [Text Block]

Guarantor/Non-guarantor Subsidiary Financial Information

The following information contains the condensed consolidating financial statements for the Company, the parent on a stand-alone basis (QVC, Inc.), the combined subsidiary guarantors (Affiliate Relations Holdings, Inc.; Affiliate Investment, Inc.; AMI 2, Inc.; ER Marks, Inc.; QVC International LLC; QVC Rocky Mount, Inc. and QVC San Antonio, LLC) and the combined non-guarantor subsidiaries pursuant to Rule 3-10 of Regulation S-X. Certain non-guarantor subsidiaries are majority owned by QVC International LLC, which is a guarantor subsidiary.

These condensed consolidating financial statements have been prepared from the Company’s financial information on the same basis of accounting as the Company’s condensed consolidated financial statements. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions, such as management fees, royalty revenue and expense and interest income and expense. Goodwill and other intangible assets have been allocated to the subsidiaries based on management’s estimates. Certain costs have been partially allocated to all of the subsidiaries of the Company.

The subsidiary guarantors are 100% owned by the Company. All guarantees are full and unconditional and are joint and several. There are no significant restrictions on the ability of the Company to obtain funds from its U.S. subsidiaries, including the guarantors, by dividend or loan. The Company has not presented separate notes and other disclosures concerning the subsidiary guarantors as the Company has determined that such material information is available in the notes to the Company’s condensed consolidated financial statements.

Condensed consolidated balance sheets

June 30, 2013
(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	$	8		164		244		—		416
Restricted cash	13			—		2		—		15
Accounts receivable, net	460			—		242		—		702
Inventories	687			—		264		—		951
Deferred income taxes	137			—		22		—		159
Prepaid expenses	21			—		40		—		61
Total current assets	1,326			164		814		—		2,304
Property, plant and equipment, net	242			64		755		—		1,061
Cable and satellite television distribution rights, net	—			554		125		—		679
Goodwill	4,169			—		1,001		—		5,170
Other intangible assets, net	1,206			2,049		166		—		3,421
Other noncurrent assets	10			—		65		—		75
Investments in subsidiaries	3,586			1,715		—		(5,301	)	—
Total assets	$	10,539		4,546		2,926		(5,301	)	12,710
Liabilities and equity
Current liabilities:
Current portion of debt and capital lease obligations	$	2		—		9		—		11
Accounts payable-trade	236			—		208		—		444
Accrued liabilities	232			45		414		—		691
Intercompany accounts (receivable) payable	(364		)	(309	)	673		—		—
Total current liabilities	106			(264	)	1,304		—		1,146
Long-term portion of debt and capital lease obligations	3,813			—		57		—		3,870
Deferred compensation	13			—		1		—		14
Deferred income taxes	417			944		(14	)	—		1,347
Other long-term liabilities	132			—		18		—		150
Total liabilities	4,481			680		1,366		—		6,527
Equity:
QVC, Inc. shareholder's equity	6,058			3,866		1,435		(5,301	)	6,058
Noncontrolling interest	—			—		125		—		125
Total equity	6,058			3,866		1,560		(5,301	)	6,183
Total liabilities and equity	$	10,539		4,546		2,926		(5,301	)	12,710

Condensed consolidated balance sheets

December 31, 2012
(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	$	75		165		300	—		540
Restricted cash	13			—		2	—		15
Accounts receivable, net	747			—		308	—		1,055
Inventories	691			—		218	—		909
Deferred income taxes	131			—		20	—		151
Prepaid expenses	19			—		34	—		53
Total current assets	1,676			165		882	—		2,723
Property, plant and equipment, net	247			67		817	—		1,131
Cable and satellite television distribution rights, net	—			618		146	—		764
Goodwill	4,169			—		1,065	—		5,234
Other intangible assets, net	1,280			2,049		180	—		3,509
Other noncurrent assets	14			—		63	—		77
Investments in subsidiaries	3,789			1,838		—	(5,627	)	—
Total assets	$	11,175		4,737		3,153	(5,627	)	13,438
Liabilities and equity
Current liabilities:
Current portion of debt and capital lease obligations	$	2		—		10	—		12
Accounts payable-trade	324			—		242	—		566
Accrued liabilities	402			106		447	—		955
Intercompany accounts (receivable) payable	(226		)	(411	)	637	—		—
Total current liabilities	502			(305	)	1,336	—		1,533
Long-term portion of debt and capital lease obligations	3,404			—		61	—		3,465
Deferred compensation	11			—		1	—		12
Deferred income taxes	431			964		15	—		1,410
Other long-term liabilities	137			17		30	—		184
Total liabilities	4,485			676		1,443	—		6,604
Equity:
QVC, Inc. shareholder's equity	6,690			4,061		1,566	(5,627	)	6,690
Noncontrolling interest	—			—		144	—		144
Total equity	6,690			4,061		1,710	(5,627	)	6,834
Total liabilities and equity	$	11,175		4,737		3,153	(5,627	)	13,438

Condensed consolidated statements of operations

Three months ended June 30, 2013
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	1,384		182		623		(228	)	1,961
Cost of goods sold	836			23		427		(59	)	1,227
Gross profit	548			159		196		(169	)	734
Operating expenses:
Operating	47			48		76		—		171
Selling, general and administrative, including stock-based compensation	227			—		80		(169	)	138
Depreciation	9			2		22		—		33
Amortization of intangible assets	51			36		20		—		107
Intercompany management expense (income)	15			(4	)	(11	)	—		—
	349			82		187		(169	)	449
Operating income	199			77		9		—		285
Other (expense) income:
Equity in losses of investee	—			—		(2	)	—		(2	)
Gains on financial instruments	—			—		3		—		3
Interest (expense) income	(50		)	(1	)	1		—		(50	)
Foreign currency (loss) gain	(1		)	—		1		—		—
Loss on extinguishment of debt	(16		)	—		—		—		(16	)
Intercompany interest (expense) income	(4		)	12		(8	)	—		—
	(71		)	11		(5	)	—		(65	)
Income before income taxes	128			88		4		—		220
Income tax expense	(21		)	(32	)	(28	)	—		(81	)
Equity in earnings of subsidiaries, net of tax	32			11		—		(43	)	—
Net income (loss)	139			67		(24	)	(43	)	139
Less net income attributable to the noncontrolling interest	(13		)	—		(13	)	13		(13	)
Net income (loss) attributable to QVC, Inc. shareholder	$	126		67		(37	)	(30	)	126

Condensed consolidated statements of operations

Three months ended June 30, 2012
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	1,352		182		670		(230	)	1,974
Cost of goods sold	830			27		437		(60	)	1,234
Gross profit	522			155		233		(170	)	740
Operating expenses:
Operating	45			47		84		—		176
Selling, general and administrative, including stock-based compensation	217			—		87		(170	)	134
Depreciation	9			1		23		—		33
Amortization of intangible assets	48			33		15		—		96
Intercompany management expense (income)	44			(18	)	(26	)	—		—
	363			63		183		(170	)	439
Operating income	159			92		50		—		301
Other income (expense):
Gains on financial instruments	12			—		1		—		13
Interest expense	(56		)	—		(1	)	—		(57	)
Foreign currency loss	(3		)	(5	)	—		—		(8	)
Intercompany interest (expense) income	(3		)	12		(9	)	—		—
	(50		)	7		(9	)	—		(52	)
Income before income taxes	109			99		41		—		249
Income tax expense	(29		)	(29	)	(34	)	—		(92	)
Equity in earnings of subsidiaries, net of tax	77			17		—		(94	)	—
Net income (loss)	157			87		7		(94	)	157
Less net income attributable to the noncontrolling interest	(15		)	—		(15	)	15		(15	)
Net income (loss) attributable to QVC, Inc. shareholder	$	142		87		(8	)	(79	)	142

Condensed consolidated statements of operations

Six months ended June 30, 2013
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	2,752		365		1,277		(459	)	3,935
Cost of goods sold	1,690			49		860		(120	)	2,479
Gross profit	1,062			316		417		(339	)	1,456
Operating expenses:
Operating	92			93		159		—		344
Selling, general and administrative, including stock-based compensation	463			—		169		(339	)	293
Depreciation	19			3		41		—		63
Amortization of intangible assets	102			70		39		—		211
Intercompany management expense (income)	32			(7	)	(25	)	—		—
	708			159		383		(339	)	911
Operating income	354			157		34		—		545
Other income (expense):
Equity in losses of investee	—			—		(1	)	—		(1	)
Gains on financial instruments	12			—		3		—		15
Interest expense	(112		)	(1	)	—		—		(113	)
Foreign currency (loss) gain	(2		)	(1	)	2		—		(1	)
Loss on extinguishment of debt	(57		)	—		—		—		(57	)
Intercompany interest (expense) income	(7		)	25		(18	)	—		—
	(166		)	23		(14	)	—		(157	)
Income before income taxes	188			180		20		—		388
Income tax expense	(32		)	(60	)	(51	)	—		(143	)
Equity in earnings of subsidiaries, net of tax	89			26		—		(115	)	—
Net income (loss)	245			146		(31	)	(115	)	245
Less net income attributable to the noncontrolling interest	(25		)	—		(25	)	25		(25	)
Net income (loss) attributable to QVC, Inc. shareholder	$	220		146		(56	)	(90	)	220

Condensed consolidated statements of operations

Six months ended June 30, 2012
(in millions)	Parent issuer- QVC, Inc.			Combined subsidiary guarantors		Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net revenue	$	2,662		354		1,342		(452	)	3,906
Cost of goods sold	1,653			54		876		(119	)	2,464
Gross profit	1,009			300		466		(333	)	1,442
Operating expenses:
Operating	88			92		171		—		351
Selling, general and administrative, including stock-based compensation	440			—		169		(333	)	276
Depreciation	17			2		45		—		64
Amortization of intangible assets	96			65		31		—		192
Intercompany management expense (income)	40			(15	)	(25	)	—		—
	681			144		391		(333	)	883
Operating income	328			156		75		—		559
Other income (expense):
Gains on financial instruments	24			—		—		—		24
Interest expense	(111		)	—		—		—		(111	)
Foreign currency (loss) gain	(5		)	—		3		—		(2	)
Intercompany interest (expense) income	(6		)	25		(19	)	—		—
	(98		)	25		(16	)	—		(89	)
Income before income taxes	230			181		59		—		470
Income tax expense	(63		)	(54	)	(57	)	—		(174	)
Equity in earnings of subsidiaries, net of tax	129			34		—		(163	)	—
Net income (loss)	296			161		2		(163	)	296
Less net income attributable to the noncontrolling interest	(29		)	—		(29	)	29		(29	)
Net income (loss) attributable to QVC, Inc. shareholder	$	267		161		(27	)	(134	)	267

Condensed consolidated statements of comprehensive income (loss)

Three months ended June 30, 2013
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	139		67	(24	)	(43	)	139
Foreign currency translation adjustments	(16		)	—	(16	)	16		(16	)
Total comprehensive income (loss)	123			67	(40	)	(27	)	123
Comprehensive (income) loss attributable to noncontrolling interest	(7		)	—	(7	)	7		(7	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	116			67	(47	)	(20	)	116

Three months ended June 30, 2012
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	157		87	7		(94	)	157
Foreign currency translation adjustments	(49		)	—	(49	)	49		(49	)
Total comprehensive income (loss)	108			87	(42	)	(45	)	108
Comprehensive (income) loss attributable to noncontrolling interest	(19		)	—	(19	)	19		(19	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	89			87	(61	)	(26	)	89

Condensed consolidated statements of comprehensive income (loss)

Six months ended June 30, 2013
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	245		146	(31	)	(115	)	245
Foreign currency translation adjustments	(107		)	—	(107	)	107		(107	)
Total comprehensive income (loss)	138			146	(138	)	(8	)	138
Comprehensive (income) loss attributable to noncontrolling interest	(6		)	—	(6	)	6		(6	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$	132		146	(144	)	(2	)	132

Six months ended June 30, 2012
(in millions)	Subsidiary issuer- QVC, Inc.			Combined subsidiary guarantors	Combined non-guarantor subsidiaries		Eliminations		Consolidated- QVC, Inc. and subsidiaries
Net income (loss)	$	296		161	2		(163	)	296
Foreign currency translation adjustments	(36		)	—	(36	)	36		(36	)
Total comprehensive income (loss)	260			161	(34	)	(127	)	260
Comprehensive (income) loss attributable to noncontrolling interest	(23		)	—	(23	)	23		(23	)
Comprehensive income (loss) attributable to QVC, Inc. shareholder	$	237		161	(57	)	(104	)	237

Condensed consolidated statements of cash flows

Six months ended June 30, 2013
(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 (used in) operating activities	$	358		115		(31	)	—		442
Investing activities:
Capital expenditures, net	(33		)	—		(42	)	—		(75	)
Expenditures for cable and satellite television distribution rights, net	—			(25	)	(1	)	—		(26	)
Changes in other noncurrent assets	4			—		(3	)	—		1
Intercompany investing activities	292			149		—		(441	)	—
Net cash provided by (used in) investing activities	263			124		(46	)	(441	)	(100	)
Financing activities:
Principal payments of debt and capital lease obligations	(1,690		)	—		(5	)	—		(1,695	)
Principal borrowings of debt from senior secured credit facility	1,053			—		—		—		1,053
Proceeds from issuance of senior secured notes, net of original issue discount	1,050			—		—		—		1,050
Payment of debt origination fees	(16		)	—		—		—		(16	)
Payment of bond premium fees	(46		)	—		—		—		(46	)
Other financing activities	7			—		—		—		7
Dividends paid to Liberty, net	(765		)	—		—		—		(765	)
Dividend paid to noncontrolling interest	—			—		(25	)	—		(25	)
Net short-term intercompany debt (repayments) borrowings	(138		)	102		36		—		—
Intercompany financing activities	(143		)	(342	)	44		441		—
Net cash (used in) provided by financing activities	(688		)	(240	)	50		441		(437	)
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		(29	)	—		(29	)
Net decrease in cash and cash equivalents	(67		)	(1	)	(56	)	—		(124	)
Cash and cash equivalents, beginning of period	75			165		300		—		540
Cash and cash equivalents, end of period	$	8		164		244		—		416

Condensed consolidated statements of cash flows

Six months ended June 30, 2012
(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	$	403		171		69		—		643
Investing activities:
Capital expenditures, net	(20		)	(1	)	(80	)	—		(101	)
Expenditures for cable and satellite television distribution rights, net	—			(1	)	(1	)	—		(2	)
Cash paid for joint ventures and acquisitions of businesses, net of cash received	—			—		(27	)	—		(27	)
Decrease in restricted cash	2			—		—		—		2
Changes in other noncurrent assets	2			(1	)	—		—		1
Intercompany investing activities	306			189		—		(495	)	—
Net cash provided by (used in) investing activities	290			186		(108	)	(495	)	(127	)
Financing activities:
Principal payments of debt and capital lease obligations	(774		)	—		(5	)	—		(779	)
Principal borrowings of debt from senior secured credit facility	648			—		—		—		648
Dividends paid to Liberty, net	(458		)	—		—		—		(458	)
Dividend paid to noncontrolling interest	—			—		(29	)	—		(29	)
Net short-term intercompany debt (repayments) borrowings	(45		)	24		21		—		—
Intercompany financing activities	(64		)	(441	)	10		495		—
Net cash used in financing activities	(693		)	(417	)	(3	)	495		(618	)
Effect of foreign exchange rate changes on cash and cash equivalents	—			—		(12	)	—		(12	)
Net decrease in cash and cash equivalents	—			(60	)	(54	)	—		(114	)
Cash and cash equivalents, beginning of period	3			223		334		—		560
Cash and cash equivalents, end of period	$	3		163		280		—		446