Annual report pursuant to Section 13 and 15(d)

Income Taxes Income Tax (Tables)

v3.20.4
Income Taxes Income Tax (Tables)
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] Income tax expense consisted of the following:
Years ended December 31,
(in millions) 2020 2019 2018
Current:
U.S. federal $ 187  141  239 
State and local 55  37  37 
Foreign jurisdictions 104  93  84 
Total 346  271  360 
Deferred:
U.S. federal (15) (11) (27)
State and local 21  3  (2)
Foreign jurisdictions (15) (1) 3 
Total (9) (9) (26)
Total income tax expense $ 337  262  334 
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] Pre-tax income was as follows:
Years ended December 31,
(in millions) 2020 2019 2018
QxH $ 931  843  1,062 
QVC-International 316  236  200 
Consolidated QVC $ 1,247  1,079  1,262 
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] Total income tax expense differs from the amounts computed by applying the U.S. federal income tax rate of 21% in 2020, 2019 and 2018, as a result of the following:
Years ended December 31,
2020 2019 2018
Provision at statutory rate 21.0  % 21.0  % 21.0  %
State income taxes, net of federal benefit 4.2  2.9  2.2 
Foreign taxes 2.0  1.0  0.8 
Write-off of investment and notes of foreign subsidiary —  (3.1) — 
Valuation allowance 0.4  3.2  2.6 
Permanent differences (0.5) (0.2) (0.2)
Corporate restructuring 0.9  —  — 
Investment in subsidiary —  0.9  0.6 
Impact of foreign currency tax regulation —  (0.7) (0.6)
Other, net (1.0) (0.7) 0.1 
Total income tax expense 27.0  % 24.3  % 26.5  %
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] The tax effects of temporary differences that gave rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below:
December 31,
(in millions) 2020 2019
Deferred tax assets:
Accounts receivable, principally due to the allowance for credit losses and related reserves for the uncollectible accounts $ 28  31 
Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986
 37  38 
Allowance for sales returns
 28  30 
Deferred revenue
 5  6 
Deferred compensation
 32  38 
Unrecognized federal and state tax benefits
 14  13 
Net operating loss carryforwards
 116  57 
Foreign tax credits carryforward
 48  43 
Lease obligations
 69  68 
Cumulative translation of foreign currencies
 7  — 
Accrued liabilities
 8  15 
Other
 14  8 
Subtotal
 406  347 
Valuation allowance
 (166) (99)
Total deferred tax assets
 240  248 
Deferred tax liabilities:
Depreciation and amortization
 (853) (823)
Lease assets
 (64) (66)
Cumulative translation of foreign currencies
 —  (22)
Investment in subsidiary
—  (26)
Total deferred tax liabilities
 (917) (937)
Net deferred tax liability
 $ (677) (689)
Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block] A reconciliation of the 2019 and 2020 beginning and ending amount of the liability for unrecognized tax benefits is as follows:
(in millions)
Balance at January 1, 2019 $ 54 
Increases related to prior year tax positions 9 
Decreases related to prior year tax positions (7)
Decreases related to settlements with taxing authorities (4)
Increases related to current year tax positions 8 
Balance at December 31, 2019 60 
Increases related to prior year tax positions 5 
Decreases related to prior year tax positions (6)
Decreases related to settlements with taxing authorities — 
Increases related to current year tax positions 8 
Balance at December 31, 2020 $ 67