Registration of securities issued in business combination transactions

Income Taxes (Tables)

v2.4.0.8
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
Schedule of income tax expense (benefit)
Income tax expense (benefit) consisted of the following:
 
Years ended December 31,
 
(in millions)
2012

2011

2010

Current:



U.S. federal
$
369

313

282

State and local
23

28

(8
)
Foreign jurisdiction
136

117

112

Total
528

458

386

Deferred:



U.S. federal
(121
)
(97
)
(87
)
State and local
(7
)
(15
)
(4
)
Foreign jurisdiction
(6
)
(4
)
(13
)
Total
(134
)
(116
)
(104
)
Total income tax expense
$
394

342

282

Schedule of pre-tax income
Pre-tax income was as follows:
 
Years ended December 31,
 
(in millions)
2012

2011

2010

QVC-U.S.
$
865

785

663

QVC-Japan
253

199

187

QVC-Germany
29

32

27

QVC-U.K.
(17
)
(2
)
(6
)
QVC-Italy
(49
)
(60
)
(38
)
Consolidated QVC
$
1,081

954

833

Schedule of differences in the total income tax expense from the amounts computed by applying the U.S. federal income tax rate
Total income tax expense differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following:
 
Years ended December 31,
 

2012

2011

2010

Provision at statutory rate
35.0
 %
35.0
 %
35.0
 %
State income taxes, net of federal benefit
1.0
 %
0.9
 %
(1.0
)%
Foreign taxes
1.3
 %
1.3
 %
1.2
 %
Change in valuation allowance
—
 %
—
 %
(0.2
)%
Foreign earnings repatriation
(1.1
)%
(1.1
)%
(1.0
)%
Permanent differences
0.1
 %
—
 %
(0.5
)%
Other, net
0.1
 %
(0.3
)%
0.4
 %
Total income tax expense
36.4
 %
35.8
 %
33.9
 %
Schedule of tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities
The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below:
 
December 31,
 
(in millions)
2012

2011

Deferred tax assets:
 
 
Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts
$
29

31

Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986
39

39

Allowance for sales returns
33

31

Deferred compensation
27

33

Unrecognized federal and state tax benefits
31

32

Accrued liabilities
29

27

Other
42

42

Subtotal
230

235

Valuation allowance
(1
)
(1
)
Total deferred tax assets
229

234

Deferred tax liabilities:
 
 
Depreciation and amortization
(1,455
)
(1,579
)
Cumulative translation of foreign currencies
(33
)
(51
)
Total deferred tax liabilities
(1,488
)
(1,630
)
Net deferred tax liability
$
(1,259
)
(1,396
)
Schedule of the reconciliation of the beginning and ending amount of the liability for unrecognized tax benefits
A reconciliation of the 2012 beginning and ending amount of the liability for unrecognized tax benefits is as follows:
(in millions)
 
Balance at January 1, 2012
$
99

Decreases related to prior year tax positions
(11
)
Increases related to current year tax positions
10

Settlements
(2
)
Lapse of statute
(1
)
Balance at December 31, 2012
$
95