Unusual or Infrequently Occurring Items |
3 Months Ended |
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Mar. 31, 2023 | |
| Unusual or Infrequent Items, or Both [Abstract] | |
| Unusual or Infrequent Items, or Both, Disclosure | Fire at Rocky Mount Fulfillment Center On December 18, 2021, QVC experienced a fire at its Rocky Mount 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 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. The Company determined that recovery of certain fire related costs was probable and recorded an insurance receivable.
As of December 31, 2022 the Company had an insurance receivable of $40 million recorded in accounts receivable in the consolidated balance sheet. During the three months ended March 31, 2023, the Company received $55 million of insurance proceeds of which $40 million was applied to the insurance receivable and $15 million was recognized as a gain, partially offset by $11 million of other fire related costs in fire related costs, net of (recoveries) in the condensed consolidated statement of operations. There was no remaining insurance receivable outstanding as of March 31, 2023.
In February 2023, QVC sold the Rocky Mount fulfillment center to an independent third party and received net cash proceeds of $15 million. QVC recognized a $13 million gain on the sale during the three months ended March 31, 2023 calculated as the difference between the aggregate consideration received and the carrying value of the property. The gain is included in fire related costs, net of (recoveries) in the condensed consolidated statement of operations.
During the three months ended March 31, 2022, the Company incurred an additional $2 million of fire related costs, net of (recoveries). Additionally, for the three months ended March 31, 2022, the Company recorded an $80 million write-down related to Rocky Mount inventory which was included in Cost of goods sold. Due to the circumstances surrounding the write-down of the inventory, this write-down has been excluded from Adjusted OIBDA (as defined in note 11). A business interruption claim was submitted to 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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