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, 2017

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Income tax expense (benefit) consisted of the following:



	Years ended December 31,
(in millions)	2017			2016		2015
Current:
U.S. federal	$	361		326		384
State and local	28			29		20
Foreign jurisdictions	87			73		75
Total	476			428		479
Deferred:
U.S. federal	(317		)	(31	)	(86	)
State and local	(7		)	(8	)	3
Foreign jurisdictions	—			(4	)	(7	)
Total	(324		)	(43	)	(90	)
Total income tax expense	$	152		385		389

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

Pre-tax income was as follows:



	Years ended December 31,
(in millions)	2017		2016	2015
QVC-U.S.	$	915	859	909
QVC-International	209		168	142
Consolidated QVC	$	1,124	1,027	1,051

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 35% in effect in 2017, as a result of the following:



	Years ended December 31,
	2017		2016		2015
Provision at statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	1.0	%	1.3	%	1.4	%
Foreign taxes	—	%	(0.3	)%	0.2	%
Foreign earnings repatriation	—	%	0.2	%	0.2	%
Valuation allowance	1.0	%	1.0	%	0.9	%
Permanent differences	(2.1	)%	(0.6	)%	(0.2	)%
Impact of Tax Cuts and Jobs Act	(25.4	)%	—	%	—	%
Investment in subsidiary	3.9	%	—	%	—	%
Impact of foreign currency tax regulation	0.4	%	1.0	%	—	%
Other, net	(0.3	)%	(0.1	)%	(0.5	)%
Total income tax expense	13.5	%	37.5	%	37	%

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)	2017			2016
Deferred tax assets:
Accounts receivable, principally due to the allowance for doubtful accounts and related reserves for the uncollectible accounts	$	21		38
Inventories, principally due to obsolescence reserves and additional costs of inventories for tax purposes pursuant to the Tax Reform Act of 1986	25			36
Allowance for sales returns	24			36
Deferred revenue	29			41
Deferred compensation	20			30
Unrecognized federal and state tax benefits	11			23
Net operating loss carryforwards	33			22
Accrued liabilities	30			38
Other	—			6
Subtotal	193			270
Valuation allowance	(33		)	(22	)
Total deferred tax assets	160			248
Deferred tax liabilities:
Depreciation and amortization	(584		)	(1,009	)
Cumulative translation of foreign currencies	(17		)	(13	)
Investment in subsidiary	(28		)	(4	)
Other	(4		)	—
Total deferred tax liabilities	(633		)	(1,026	)
Net deferred tax liability	$	(473	)	(778	)

Summary of Positions for which Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Table Text Block]

A reconciliation of the 2017 beginning and ending amount of the liability for unrecognized tax benefits is as follows:



(in millions)
Balance at January 1, 2017	$	55
Increases related to prior year tax positions	1
Decreases related to prior year tax positions	(8		)
Decreases related to settlements with taxing authorities	(4		)
Increases related to current year tax positions	6
Balance at December 31, 2017	$	50