Annual report pursuant to Section 13 and 15(d)

Leases and Transponder Service Agreements

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Leases and Transponder Service Agreements
 12 Months Ended
Dec. 31, 2021
Leases and Transponder Service Agreements [Abstract]  
Lease of lessee disclosure
(9) Leases
The Company has finance lease agreements with transponder and transmitter network suppliers for the right to transmit its signals in the U.S. and Germany. The Company is also party to a finance lease agreement for a warehouse. QVC also has leases for data processing equipment, facilities, office space and land that are classified as operating leases. Our leases have remaining lease terms of less than 1 year to 13 years, some of which may include the option to extend or terminate the leases.
The components of lease cost for the years ended December 31, 2021, 2020 and 2019, were as follows:
Year ended December 31,
(in millions) 2021 2020 2019
Finance lease cost
     Depreciation of leased assets $ 19  19  20 
     Interest on lease liabilities 8  8  9 
Total finance lease cost 27  27  29 
Operating lease cost 42  39  32 
     Total lease cost $ 69  66  61 
The remaining weighted-average lease term and the weighted-average discount rate were as follows:
December 31, 2021
Weighted-average remaining lease term (years):
     Finance leases 7.7
     Operating leases 10.5
Weighted-average discount rate:
     Finance leases 5.2  %
     Operating leases 6.0  %
Supplemental balance sheet information related to leases was as follows:
December 31,
(in millions) 2021 2020
Operating Leases:
  Operating lease right-of-use assets $ 201  221 
  Accrued liabilities $ 26  25 
  Other long-term liabilities 177  195 
      Total operating lease liabilities $ 203  220 
Finance Leases:
   Property and equipment $ 277  278 
   Accumulated depreciation (151) (141)
     Property and equipment, net $ 126  137 
   Current portion of debt and finance lease obligations $ 20  18 
   Long-term portion of debt and finance lease obligations 137  150 
     Total finance lease liabilities $ 157  168 
Supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019 was as follows:
Year ended December 31,
(in millions) 2021 2020 2019
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows for operating lease $ 38  44  35 
     Operating cash flows for finance leases 8  8  9 
     Financing cash flows for finance leases 18  18  22 
Right-of-use assets obtained in exchange for lease obligations:
      Operating leases 11  31  151 
      Finance leases $ 11  —  16 
Future payments under noncancelable operating leases and finance leases with initial terms of one year or more as of December 31, 2021 consisted of the following:
(in millions) Finance leases Operating leases Total leases
2022 $ 27  37  64 
2023 27  29  56 
2024 26  25  51 
2025 23  21  44 
2026 22  20  42 
Thereafter 67  148  215 
Total lease payments 192  280  472 
Less: imputed interest (35) (77) (112)
Total lease liabilities $ 157  203  360 
On October 5, 2018, QVC entered into a lease (“ECDC Lease”) for an East Coast distribution center. The 1.7 million square foot rental building is located in Bethlehem, Pennsylvania and has an initial term of 15 years. QVC obtained initial access to a portion of the ECDC Lease during March 2019 and obtained access to the remaining portion during September 2019. In total, QVC recorded a right of use asset of $141 million and an operating lease liability of $131 million relating to the ECDC Lease, with the difference attributable to prepaid rent. QVC is required to pay an initial base rent of $10 million per year, with payments that began in the third quarter of 2019 and increasing to $14 million per year, as well as all real estate taxes and other building operating costs. QVC also has the option to extend the term of the ECDC Lease for up to two consecutive terms of 5 years each and one final term of 4 years.