Unusual or Infrequently Occurring Items |
12 Months Ended |
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Dec. 31, 2022 | |
| Unusual or Infrequent Items, or Both [Abstract] | |
| Unusual or Infrequent Items, or Both, Disclosure |
(19) Fire at Rocky Mount Fulfillment Center
On December 18, 2021, QVC experienced a fire at its Rocky Mount, Inc. fulfillment center in North Carolina. Rocky Mount was the Company’s second-largest fulfillment center for QxH and the Company’s primary returns center for hard goods. The building was significantly damaged as a result of the fire and related smoke and will not reopen. QVC decided not to rebuild the facility and entered into an agreement to sell the property which closed in February 2023. The Company maintains property, general liability and business interruption insurance coverage. Based on the provisions of QVC’s insurance policies, the Company records estimated insurance recoveries for fire related costs for which recovery is deemed probable.
For the year ended December 31, 2021, the Company recorded $250 million of fire related costs and estimated insurance recoveries of $229 million for which recovery was deemed probable. As of December 31, 2021, the Company received $100 million of insurance proceeds and had an insurance receivable of $129 million which was recorded in accounts receivable in the consolidated balance sheet.
For the year ended December 31, 2022, the Company recorded $157 million of fire related costs, including $95 million for the write-down of inventory that will not be reimbursed by QVC’s insurance policies. The fire related costs also include $59 million for which recovery was deemed probable and $3 million of costs that will not be reimbursed by QVC’s insurance policies. For the year ended December 31, 2022, the Company received $280 million of insurance proceeds for inventory, fixed asset losses and other fire related costs and recorded a gain of $132 million in restructuring and fire related costs, net of (recoveries) in the consolidated statement of operations, representing the proceeds received in excess of cumulative losses recognized. The Company recorded an insurance receivable, net of advance proceeds received, for other fire related costs for which recovery was deemed probable of $40 million in accounts receivable in the consolidated balance sheet as of December 31, 2022.
During the year ended December 31, 2022, inventory write-downs related to Rocky Mount inventory of $95 million were included in Cost of goods sold. Due to the circumstances surrounding the write-downs of the inventory, these write-downs have been excluded from Adjusted OIBDA (as defined in note 16).
We submitted our business interruption claim with the insurance company; however, there can be no guarantee that all business interruption losses will be recovered. We expect to continue to record additional costs and recoveries until the insurance claim is fully settled.
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