Qurate Retail, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes Income Tax (Tables)

Income Taxes Income Tax (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of components of income tax expense (benefit)

Income tax expense (benefit) consisted of the following:



	Years ended December 31,
(in millions)	2013			2012		2011
Current:
U.S. federal	$	361		369		313
State and local	22			23		28
Foreign jurisdiction	78			136		117
Total	461			528		458
Deferred:
U.S. federal	(107		)	(121	)	(97	)
State and local	(7		)	(7	)	(15	)
Foreign jurisdiction	6			(6	)	(4	)
Total	(108		)	(134	)	(116	)
Total income tax expense	$	353		394		342

Schedule of pre-tax income, domestic and foreign

Pre-tax income was as follows:



	Years ended December 31,
(in millions)	2013			2012		2011
QVC-U.S.	$	824		865		785
QVC-Japan	181			253		199
QVC-Germany	18			29		32
QVC-U.K.	1			(17	)	(2	)
QVC-Italy	(38		)	(49	)	(60	)
Consolidated QVC	$	986		1,081		954

Schedule of effective income tax rate reconciliation

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,
	2013		2012		2011
Provision at statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	0.7	%	1.0	%	0.9	%
Foreign taxes	0.6	%	1.3	%	1.3	%
Foreign earnings repatriation	(0.4	)%	(1.1	)%	(1.1	)%
Permanent differences	—	%	0.1	%	—	%
Other, net	(0.1	)%	0.1	%	(0.3	)%
Total income tax expense	35.8	%	36.4	%	35.8	%

Schedule of deferred tax assets and liabilities

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)	2013			2012
Deferred tax assets:
Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts	$	32		29
Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986	36			39
Allowance for sales returns	39			33
Deferred compensation	36			27
Unrecognized federal and state tax benefits	29			31
Accrued liabilities	25			29
Other	36			42
Subtotal	233			230
Valuation allowance	(1		)	(1	)
Total deferred tax assets	232			229
Deferred tax liabilities:
Depreciation and amortization	(1,349		)	(1,455	)
Cumulative translation of foreign currencies	(47		)	(33	)
Total deferred tax liabilities	(1,396		)	(1,488	)
Net deferred tax liability	$	(1,164	)	(1,259	)

Schedule of unrecognized tax benefits roll forward

A reconciliation of the 2013 beginning and ending amount of the liability for unrecognized tax benefits is as follows:



(in millions)
Balance at January 1, 2013	95
Decreases related to prior year tax positions	(11	)
Increases related to current year tax positions	12
Settlements	(7	)
Balance at December 31, 2013	89