10q10k10q10k.net

What changed in QVC Group, Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of QVC Group, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+402 added−488 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-01)

Top changes in QVC Group, Inc.'s 2023 10-K

402 paragraphs added · 488 removed · 335 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

82 edited+6 added−27 removed88 unchanged
Biggest changeThe following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated: ● The continuing global and regional economic impacts of the COVID-19 pandemic and other public health-related risks and events, on our customers, our vendors and our businesses generally; ● customer demand for our products and services and our ability to attract new customers and retain existing customers by anticipating customer demand and adapting to changes in demand; ● competitor responses to our products and services; ● increased digital TV penetration and the impact on channel positioning of our programs; ● the levels of online traffic to our businesses' websites and our ability to convert visitors into customers or contributors; ● uncertainties inherent in the development and integration of new business lines and business strategies; ● our future financial performance, including availability, terms, deployment of capital and our level of indebtedness; ● our ability to effectively manage our installment sales plans and revolving credit card programs; ● the cost and ability of shipping companies, manufacturers, suppliers, digital marketing channels, and vendors to deliver products, equipment, software and services; ● the outcome of any pending or threatened litigation; ● availability of qualified personnel; ● the impact of the seasonality of our businesses; ● changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the Federal Communications Commission (“FCC”), and adverse outcomes from regulatory proceedings; ● changes in the nature of key strategic relationships with partners, distributors, suppliers and vendors; ● domestic and international economic and business conditions and industry trends, including the impact of Brexit (as defined below) and the impact of inflation and increased labor costs; ● increases in market interest rates; ● changes in the trade policy and trade relations with China; ● consumer spending levels, including the availability and amount of individual consumer debt and customer credit losses; ● system interruption and the lack of integration and redundancy in the systems and infrastructures of our businesses; ● advertising spending levels; ● changes in distribution and viewing of television programming, including the expanded deployment of video on demand technologies and Internet protocol television and their impact on home shopping programming; ● rapid technological changes; ● failure to protect the security of personal information, subjecting us to potentially costly government enforcement actions and/or private litigation and reputational damage; ● the regulatory and competitive environment of the industries in which we operate; ● natural disasters, public health crises (including COVID-19), political crises, and other catastrophic events or other events outside of our control, including climate change; ● threatened terrorist attacks, political and economic unrest in international markets and ongoing military action around the world; ● failure to successfully implement Project Athens (defined below); and ● fluctuations in foreign currency exchange rates. ​ These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Annual Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any I-4 Table of Contents forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.
Biggest changeThe following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated: ● Customer demand for our products and services and our ability to attract new customers and retain existing customers by anticipating customer demand and adapting to changes in demand; ● competitor responses to our products and services; ● increased digital TV penetration and the impact on channel positioning of our programs; I-3 Table of Contents ● the levels of online traffic to our businesses' websites and our ability to convert visitors into customers or contributors; ● uncertainties inherent in the development and integration of new business lines and business strategies; ● our future financial performance, including availability, terms, deployment of capital and our level of indebtedness; ● our ability to effectively manage our installment sales plans and revolving credit card programs; ● the cost and ability of shipping companies, manufacturers, suppliers, digital marketing channels, and vendors to deliver products, equipment, software and services; ● the outcome of any pending or threatened litigation; ● availability of qualified personnel; ● the impact of the seasonality of our businesses; ● changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the Federal Communications Commission (“FCC”), and adverse outcomes from regulatory proceedings; ● changes in the nature of key strategic relationships with partners, distributors, suppliers and vendors, including our increased reliance on social media platform as a marketing tool; ● domestic and international economic and business conditions and industry trends, including the impact of Brexit (as defined below) and the impact of inflation and increased labor costs; ● increases in market interest rates; ● changes in the trade policy and trade relations with China; ● consumer spending levels, including the availability and amount of individual consumer debt and customer credit losses; ● system interruption and the lack of integration and redundancy in the systems and infrastructures of our businesses; ● advertising spending levels; ● changes in distribution and viewing of television programming, including the expanded deployment of video on demand technologies and Internet protocol television and their impact on home shopping programming; ● rapid technological changes; ● failure to protect the security of personal information, including as a result of cybersecurity threats and cybersecurity incidents, subjecting us to potentially costly government enforcement actions and/or private litigation and reputational damage; ● the regulatory and competitive environment of the industries in which we operate; ● natural disasters, public health crises (including COVID-19 and its variants or future pandemics or epidemics), political crises, and other catastrophic events or other events outside of our control, including climate change; ● threatened terrorist attacks, political and economic unrest in international markets and ongoing military action around the world; ● failure to successfully implement Project Athens (defined below); and ● fluctuations in foreign currency exchange rates. ​ These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Annual Report on Form 10-K, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.
The timing and frequency of catalog circulation varies by brand and I-10 Table of Contents depends upon a number of factors, including the timing of the introduction of new products, marketing campaigns and promotions and inventory levels, among other factors. Branded catalogs are designed in-house, which enables each individual brand to control the process.
The timing and frequency of catalog circulation varies by brand and depends upon a number of factors, including the timing of the introduction of new products, marketing campaigns and I-10 Table of Contents promotions and inventory levels, among other factors. Branded catalogs are designed in-house, which enables each individual brand to control the process.
Regulations Related to China For more information regarding regulations related to U.S. trade policy with China, see the risk factor “Significant developments stemming from U.S. trade policy with China, including in response to forced labor and human rights abuses in China may adversely impact our business and operating results” in Item 1A.
Regulations Related to China For more information regarding regulations related to U.S. trade policy with China, see the risk factor “Significant developments stemming from U.S. and international trade policy with China, including in response to forced labor and human rights abuses in China may adversely impact our business and operating results” in Item 1A.
"Protected" status means that, in the event of a transponder failure, the signal will be transferred to a spare transponder or, if none is available, to a preemptible transponder located on the same satellite or, in certain cases, to a transponder on another satellite owned by the same service provider if one is available at the time of the failure.
"Protected" status means that, in the event of a transponder failure, QVC’s signal will be transferred to a spare transponder or, if none is available, to a preemptible transponder located on the same satellite or, in certain cases, to a transponder on another satellite owned by the same service provider if one is available at the time of the failure.
The 2017 Order does require ISPs to disclose information to consumers regarding practices such as throttling, paid prioritization and affiliated prioritization. In 2019, the D.C. Circuit ruled on numerous appeals by interested parties and largely upheld the 2017 Order. However, the D.C.
The 2017 Order does require ISPs to disclose information to consumers regarding practices such as throttling, paid prioritization and affiliated prioritization. In 2019, the D.C. Circuit ruled on numerous appeals by interested parties and largely upheld the 2017 Order.
The video programmer registration and compliance certification requirements of the amended rules have not yet become effective. As a result of these captioning requirements, QVC may incur additional costs for closed captioning. Internet Services Our online commerce businesses are subject, both directly and indirectly, to various domestic and foreign laws and governmental regulations.
The video programmer registration and compliance certification requirements of the amended rules have not yet become effective. As a result of these captioning requirements, QVC may incur additional costs for closed captioning. Internet Services Our e-commerce businesses are subject, both directly and indirectly, to various domestic and foreign laws and governmental regulations.
QVC is currently providing programming without affiliation agreements to distributors representing approximately 7% of its QVC channel distribution and 1% of its HSN channel distribution. Some of its international programming may continue to be carried by distributors after the expiration dates on its affiliation agreements with such distributors have passed.
QVC is currently providing programming without affiliation agreements to distributors representing approximately 6% of its QVC channel distribution and 1% of its HSN channel distribution. Some of its international programming may continue to be carried by distributors after the expiration dates on its affiliation agreements with such distributors have passed.
QVC has registered, or applied for the registration of, a number of tradenames, service marks, patents, copyrights and domain names through U.S. and foreign governmental authorities and vigorously protects its proprietary rights against infringement.
QVC has registered, or applied for the registration of, a number of trademarks, service marks, patents, copyrights and domain names through U.S. and foreign governmental authorities and vigorously protects its proprietary rights against infringement.
QxH QxH's programming is distributed in the U.S., 20 hours per day of live programming, 364 days per year, to approximately 93 million television households and is distributed to approximately 99% of households subscribing to services offered by television distributors.
QxH QxH's programming is distributed in the U.S., 20 hours per day of live programming, 364 days per year, to approximately 92 million television households and is distributed to approximately 99% of households subscribing to services offered by television distributors.
These registrations and applications include the “HSN” brand name and the “HSN logo” as well as registrations for HSN’s proprietary products and services, including, but not limited to, “HSN Shop By Remote,” “Technibond,” and “Concierge Collection.” QVC considers the "QVC" and “HSN” names the most significant tradenames and service marks it holds because of their impact on market awareness across all of its geographic markets and on customers' identification with QVC.
These registrations and applications include the “HSN” brand name and the “HSN logo” as well as registrations for HSN’s proprietary products and services, including, but not limited to, “HSN Shop By Remote,” “Technibond,” and “Concierge Collection.” QVC considers the "QVC" and “HSN” brands the most significant trademarks and service marks it holds because of their impact on market awareness across all of its geographic markets and on customers' identification with QVC.
The transponder service agreements for the U.S. transponders expire at the earlier of the end of the lives of the satellites or the service agreements. The service agreements for QxH expire between 2023 and 2025. The service agreements for QVC International transponders and terrestrial transmitters expire between 2023 and 2029.
The transponder service agreements for the U.S. transponders expire at the earlier of the end of the lives of the satellites or the service agreements. The service agreements for QxH expire between 2024 and 2025. The service agreements for QVC International transponders and terrestrial transmitters expire between 2024 and 2029.
QxH Digital Platform revenue as a percentage of total QxH net revenue was 60.5%, 60.4% and 59.8% for the years ended December 31, 2022, 2021 and 2020, respectively. QVC International QVC International’s business brings the QVC shopping experience to approximately 124 million households outside the U.S., primarily in Germany, Austria, Japan, the U.K., the Republic of Ireland, and Italy.
QxH Digital Platform revenue as a percentage of total QxH net revenue was 61.8%, 60.5% and 60.4% for the years ended December 31, 2023, 2022 and 2021, respectively. QVC International QVC International’s business brings the QVC shopping experience to approximately 124 million households outside the U.S., primarily in Germany, Austria, Japan, the U.K., the Republic of Ireland, and Italy.
QVC primarily utilizes home based customer service agents to handle calls, e-mail contacts and social contacts, allowing staffing flexibility for peak volume hours. In addition, QVC utilizes computerized interactive voice response order systems for telephonic orders, which handle approximately 24% of all orders taken on a worldwide basis. QxH has eight distribution centers and QVC International has four distribution centers.
QVC primarily utilizes home based customer service agents to handle calls, e-mail contacts and social contacts, allowing staffing flexibility for peak volume hours. In addition, QVC utilizes computerized interactive voice response order systems for telephonic orders, which handle approximately 25% of all orders taken on a worldwide basis. QxH has seven distribution centers and QVC International has four distribution centers.
For example, based in part on feedback from team members regarding work from home arrangements instituted in response to the outbreak of COVID-19, in 2022 we introduced a new flexible distributed I-16 Table of Contents workforce model which allows some of our team members to have the option to work from home most of the time based on a schedule approved by our team members’ respective management team. ​ Health and Safety.
For example, based in part on feedback from team members regarding work from home arrangements instituted in response to the outbreak of COVID-19, in 2022 we introduced a new flexible distributed workforce model which allows some of our team members to have the option to work from home most of the time based on a schedule approved by our team members’ respective management team. ​ Health and Safety.
In addition, QxH’s Websites and mobile applications allow shoppers to browse, research, compare and perform targeted searches for products, read customer reviews, control the order-entry process and conveniently access their account. For the year ended December 31, 2022, approximately 85% of new QxH customers made their first purchase through QxH’s Digital Platforms.
In addition, QxH’s Websites and mobile applications allow shoppers to browse, research, compare and perform targeted searches for products, read customer reviews, control the order-entry process and conveniently access their account. For the year ended December 31, 2023, approximately 88% of new QxH customers made their first purchase through QxH’s Digital Platforms.
Intellectual Property QVC regards its tradenames, service marks, patents, copyrights, domain names, trade dress, trade secrets, proprietary technologies and similar intellectual property as critical to its success. QVC relies on a combination of tradename, patent and copyright law, trade-secret protection, and confidentiality and/or license agreements with its employees, customers, suppliers, affiliates and others to protect these proprietary rights.
Intellectual Property QVC regards its trademarks, service marks, patents, copyrights, domain names, trade dress, trade secrets, proprietary technologies and similar intellectual property as critical to its success. QVC relies on a combination of trademark, patent and copyright law, trade-secret protection, and confidentiality and/or license agreements with its employees, customers, suppliers, affiliates and others to protect these proprietary rights.
The future adoption of such laws or regulations may slow the growth of commercial online services and the Internet, which could in turn cause a decline in the demand for the services and products of our online commerce businesses and increase their costs of doing business or otherwise have an adverse effect on their businesses, operating results and financial conditions.
The future adoption of such laws or regulations may slow the growth of commercial online services and the Internet, which could in turn cause a decline in the demand for the services and products of our I-13 Table of Contents online commerce businesses and increase their costs of doing business or otherwise have an adverse effect on their businesses, operating results and financial conditions.
QVC’s global sales mix is provided in the table below: ​ ​ ​ ​ ​ ​ ​ Years ended December 31, Product category 2022 ​ 2021 ​ 2020 Home 40% ​ 40% ​ 42% Apparel 18% ​ 16% ​ 14% Beauty 17% ​ 18% ​ 18% Accessories 11% ​ 11% ​ 11% Electronics 9% ​ 10% ​ 10% Jewelry 5% ​ 5% ​ 5% Total 100% ​ 100% ​ 100% ​ Unlike traditional brick-and-mortar retailers with inventories across a network of stores, QVC is able to quickly adapt its offerings in direct response to changes in its customers purchasing patterns.
QVC’s global sales mix is provided in the table below: ​ ​ ​ ​ ​ ​ ​ Years ended December 31, Product category 2023 ​ 2022 ​ 2021 Home 41% ​ 40% ​ 40% Apparel 18% ​ 18% ​ 16% Beauty 18% ​ 17% ​ 18% Accessories 11% ​ 11% ​ 11% Electronics 7% ​ 9% ​ 10% Jewelry 5% ​ 5% ​ 5% Total 100% ​ 100% ​ 100% ​ Unlike traditional brick-and-mortar retailers with inventories across a network of stores, QVC is able to quickly adapt its offerings in direct response to changes in its customers purchasing patterns.
Grandin Road offers an affordable style assortment of products ranging from occasional furniture, accessories, holiday décor and outdoor furniture. New editions of full-color catalogs are mailed to customers several times each year, with a total annual circulation in 2022 of approximately 155 million catalogs.
Grandin Road offers an affordable style assortment of products ranging from occasional furniture, accessories, holiday décor and outdoor furniture. New editions of full-color catalogs are mailed to customers several times each year, with a total annual circulation in 2023 of approximately 111 million catalogs.
In addition, we will provide a copy of any of these documents, free of charge, to any shareholder who calls or submits a request in writing to Investor Relations, Qurate Retail, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112, Tel. No. (866) 876-0461.
In addition, we will provide a copy of any of these documents, free of charge, to any shareholder who calls or submits a I-15 Table of Contents request in writing to Investor Relations, Qurate Retail, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112, Tel. No. (866) 876-0461.
Domestically, QVC has registered tradenames and service marks including, but not limited to its brand names and logo, "QVC," "Quality Value Convenience," the "Q Logo," and "Q" and trademarks for its proprietary products sold such as "Arte D'Oro," "Cook's Essentials," "Denim & Co.," "Diamonique," “Nature’s Code,” "Northern Nights" and "Ultrafine Silver." Similarly, foreign registrations have been obtained for many tradenames and service marks for its brand names, logo and propriety products including, but not limited to, "QVC," the "Q Logo," "Q," "Cook’s Essentials," "Denim & Co.," "Diamonique" and "Northern Nights." HSN has numerous tradename registrations or pending applications in the U.S. which help to expand HSN’s brand awareness.
In the U.S., QVC has registered trademarks and service marks including, but not limited to its brand names and logo, "QVC," "Quality Value Convenience," the "Q Logo," and "Q" and trademarks for its proprietary products sold such as "Arte D'Oro," "Cook's Essentials," "Denim & Co.," "Diamonique," “Nature’s Code,” "Northern Nights" and "Zuda." Similarly, foreign registrations have been obtained for many trademarks and service marks for its brand names, logo and propriety products including, but not limited to, "QVC," the "Q Logo," "Q," "Cook’s Essentials," "Denim & Co.," "Diamonique" and "Northern Nights." HSN has numerous trademark registrations or pending applications in the U.S. which help to expand HSN’s brand awareness.
Similar to QxH, QVC I-6 Table of Contents International’s business engages customers via multiple platforms, including broadcast networks, websites, mobile applications and social media pages. QVC International product sourcing teams select products tailored to the interests of each local market.
Similar to QxH, QVC International’s business engages customers via multiple platforms, including broadcast networks, websites, mobile applications and social media pages. QVC International product sourcing teams select products tailored to the interests of each local market.
QVC also transmits its programming over digital terrestrial broadcast television to viewers throughout Italy, Germany, and the U.K. and to viewers in certain geographic regions in the U.S. In the U.S., QVC uplinks its digital programming transmissions using a third-party service, or internal resources. The transmissions are uplinked to protected, I-7 Table of Contents non-preemptible transponders on U.S. satellites.
QVC also transmits its programming over digital terrestrial broadcast television to viewers throughout Italy, Germany, and the U.K. and to viewers in certain geographic regions in the U.S. In the U.S., QVC uplinks its digital programming transmissions using a third-party service or internal resources. The transmissions are uplinked to protected, non-preemptible transponders on U.S. satellites.
QVC believes its long-term relationships with major U.S. television distributors, including cable operators (e.g., Comcast, Charter Communications and Cox), satellite television providers (e.g., DISH and DIRECTV) and telecommunications companies (e.g., Verizon and AT&T), provide it with broad distribution, favorable channel positioning and significant competitive advantages.
QVC believes its long-term relationships with major U.S. television distributors, including cable operators (e.g., Comcast, Charter I-5 Table of Contents Communications and Cox), satellite television providers (e.g., DISH and DIRECTV) and telecommunications companies (e.g., Verizon and AT&T), provide it with broad distribution, favorable channel positioning and significant competitive advantages.
For the year ended December 31, 2022, approximately 95% of QVC's worldwide shipped sales were from repeat and reactivated customers (i.e., customers who made a purchase from QVC during the prior twelve months and customers who previously made a purchase from QVC but not during the prior twelve months).
For the year ended December 31, 2023, approximately 96% of QVC's worldwide shipped sales were from repeat and reactivated customers (i.e., customers who made a purchase from QVC during the prior twelve months and customers who previously made a purchase from QVC but not during the prior twelve months).
In 2022, QVC launched on The Roku Channel, a leader in free, ad-supported streaming TV. ​ Affiliation Agreements QVC enters into long-term affiliation agreements with certain of its television distributors who downlink its programming and distribute the programming to customers. QVC's affiliation agreements with distributors have termination dates ranging from 2023 to 2026.
In 2022, QVC launched on The Roku Channel, a leader in free, ad-supported streaming TV. ​ Affiliation Agreements QVC enters into long-term affiliation agreements with certain of its television distributors who downlink its programming and distribute the programming to customers. The majority of QVC's affiliation agreements with distributors have termination dates ranging from 2024 to 2029.
In recent years, QVC has earned, on average, between 21% and 24% of its global revenue in each of the first three quarters of the year and between 30% and 32% of its global revenue in the fourth quarter of the year. CBI CBI consists of a portfolio of aspirational home and apparel brands.
In recent years, QVC has earned, on average, between 22% and 24% of its global revenue in each of the first three quarters of the year and approximately 30% of its global revenue in the fourth quarter of the year. CBI CBI consists of a portfolio of aspirational home and apparel brands.
In particular, statements under Item 1. "Business," Item 1A. "Risk-Factors," Item 2. "Properties," Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item I-3 Table of Contents 7A. "Quantitative and Qualitative Disclosures About Market Risk" contain forward-looking statements.
In particular, statements under Item 1. "Business," Item 1A. "Risk-Factors," Item 2. "Properties," Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" contain forward-looking statements.
An additional I-8 Table of Contents 5% of shipped sales in that period came from new customers and the remaining 6% of shipped sales came from reactivated customers (i.e., customers who previously made a purchase from QVC, but not during the prior twelve months).
An additional 5% of shipped sales in that period came from new customers and the remaining 5% of shipped sales came from reactivated customers (i.e., customers who previously made a purchase from QVC, but not during the prior twelve months).
Our Company fully supports these efforts. ​ Additionally, as of December 31, 2022, our consolidated subsidiaries had an aggregate of approximately 24,600 full and part-time employees. Employment levels fluctuate due to seasonal factors affecting our business. Additionally, our consolidated subsidiaries utilize independent contractors and temporary staffing agency personnel to supplement their workforce, particularly on a seasonal basis.
Our Company fully supports these efforts. ​ Additionally, as of December 31, 2023, our consolidated subsidiaries had an aggregate of approximately 20,300 full and part-time employees. Employment levels fluctuate due to seasonal factors affecting our business. Additionally, our consolidated subsidiaries utilize independent contractors and temporary staffing agency personnel to supplement their workforce, particularly on a seasonal basis.
The 1992 Cable Act and implementing regulations generally prohibit a cable operator that has an attributable interest in a satellite programmer from improperly influencing the terms and conditions of sale to unaffiliated I-12 Table of Contents MVPDs.
The 1992 Cable Act and implementing regulations generally prohibit a cable operator that has an attributable interest in a satellite programmer from improperly influencing the terms and conditions of sale to unaffiliated MVPDs.
Demographics of customers QVC enjoys a very loyal customer base, as demonstrated by the fact that for the twelve months ended December 31, 2022, approximately 89% of its shipped sales came from repeat customers (i.e., customers who made a purchase from QVC during the prior twelve months), who spent an average of $1,324 each during this period.
Demographics of customers QVC enjoys a very loyal customer base, as demonstrated by the fact that for the twelve months ended December 31, 2023, approximately 90% of its shipped sales came from repeat customers (i.e., customers who made a purchase from QVC during the prior twelve months), who spent an average of $1,442 each during this period.
"Non-preemptible" status means that, in the event of a transponder failure, QVC's transponders cannot be preempted in favor of a user of a failed transponder, even another user with "protected status." The international business units each obtain uplinking services from third parties and transmit their programming to non-preemptible transponders on international satellites and terrestrial transmitters.
"Non-preemptible" status means that, in the event of a transponder failure, QVC's transponders I-7 Table of Contents cannot be preempted in favor of a user of a failed transponder, even another user with "protected” status. The international business units each obtain uplinking services from third parties and transmit their programming to non-preemptible transponders on international satellites and terrestrial transmitters.
We also continue to monitor governmental response to the COVID-19 pandemic, and where applicable, continue to comply with country, state and local restrictions related to addressing COVID-19 risks. ​ Available Information ​ All of our filings with the SEC, including our Form 10-Ks, Form 10-Qs and Form 8-Ks, as well as amendments to such filings are available on our Internet website free of charge generally within 24 hours after we file such material with the SEC.
Where applicable, we continue to comply with country, state and local restrictions related to addressing COVID-19 and similar health risks. ​ Available Information ​ All of our filings with the SEC, including our Form 10-Ks, Form 10-Qs and Form 8-Ks, as well as amendments to such filings are available on our Internet website free of charge generally within 24 hours after we file such material with the SEC.
I-15 Table of Contents Competition Our businesses that engage in video and online commerce compete with traditional brick-and-mortar and online retailers ranging from large department stores to specialty shops, electronic retailers, direct marketing retailers, such as mail order and catalog companies, and discount retailers.
Competition Our businesses that engage in video and online commerce compete with traditional brick-and-mortar and online retailers ranging from large department stores to specialty shops, electronic retailers, direct marketing retailers, such as mail order and catalog companies, and discount retailers.
The FCC has established program carriage complaint rules. Our subsidiary QVC is subjected to program carriage rules as a result of our attributable interests under FCC rules discussed above. Regulation of Ownership.
The FCC has established program carriage complaint rules. Our subsidiary QVC is subjected to program carriage rules as a result of our attributable interests under FCC rules discussed above. I-11 Table of Contents Regulation of Ownership.
Certain of these businesses engaged in the provision of goods and services over the Internet I-13 Table of Contents must comply with federal and state laws and regulations applicable to online communications and commerce.
Certain of these businesses engaged in the provision of goods and services over the Internet must comply with federal and state laws and regulations applicable to online communications and commerce.
Although there is some overlap in the product offerings, the home brands are comprised of Ballard Designs, Frontgate, and Grandin Road. Garnet Hill focuses primarily on apparel and accessories and is categorized as an apparel brand. There are also 22 retail and outlet stores located throughout the United States.
Although there is some overlap in the product offerings, the home brands are comprised of Ballard Designs, Frontgate, and Grandin Road. Garnet Hill focuses primarily on apparel and accessories and is categorized as an apparel brand. There are also 30 retail and outlet stores located throughout the U.S.
Based on internal customer data for QxH, approximately 39% of its 8.9 million customers for the twelve months ended December 31, 2022 were women between the ages of 35 and 64. QVC does not depend on any single customer for a significant portion of its revenue.
Based on internal customer data for QxH, approximately 36% of its 8.1 million customers for the twelve months ended December 31, 2023 were women between the ages of 35 and 64. QVC does not depend on any single customer for a significant portion of its revenue.
QVC’s distribution centers and drop ship partners shipped, on average, 413,000 units per day at QxH and 178,000 units per day at QVC International during 2022. ​ QVC has built a scalable operating infrastructure focused on sustaining efficient, flexible and cost-effective sale and distribution of its products.
QVC’s distribution centers and drop ship partners shipped, on average, 388,000 units per day at QxH and 172,000 units per day at QVC International during 2023. ​ QVC has built a scalable operating infrastructure focused on sustaining efficient, flexible and cost-effective sale and distribution of its products.
Order taking and fulfillment QVC takes a majority of its orders via its websites and via mobile applications on iPhone, iPad, Apple Watch, Android and other devices. QxH and QVC International customers placed approximately 42% and 35 %, respectively, of all orders directly through their mobile devices in 2022.
Order taking and fulfillment QVC takes a majority of its orders via its websites and via mobile applications on iPhone, iPad, Apple Watch, Android and other devices. QxH and QVC International customers placed approximately 43% and 36 %, respectively, of all orders directly through their mobile devices in 2023.
The enactment, interpretation and application of user data protection laws are in a state of flux, and the interpretation and application of such laws may vary from country to country.
The enactment, interpretation and application of user data protection laws are in a state of flux, and the interpretation and application of such laws may vary I-12 Table of Contents from country to country.
Due to the nature of these businesses there is not a single or small group of competitors that own a significant portion of the overall market share. However, some of these competitors, such as Amazon and Walmart, have a significantly greater web-presence than our e-commerce subsidiaries and equity affiliates.
Due to the nature of these businesses there is not a single or small group of competitors that own a significant portion of the overall market share. However, some of these competitors, such as Amazon and Walmart, have a significantly greater web-presence.
Some of QVC’s competitors, such as Amazon and Walmart, have a significantly greater web-presence. QVC believes that the principal competitive factors for its web-commerce operations are high-quality products, brand recognition, selection, value, convenience, price, website performance, customer service and accuracy of order shipment.
Some of QVC’s competitors, such as Amazon and Walmart, have a significantly greater web-presence. QVC believes that the principal competitive factors for its web-commerce operations are high-quality products, brand recognition, selection, value, convenience, price, website performance, customer service and accuracy of order shipment. QVC believes that QxH is a leader in video shopping, e-commerce, mobile commerce and social commerce.
FCC rules attribute the ownership interests in Charter and the cable operator subsidiaries of Liberty Broadband (formerly held by GCI Liberty, Inc.), and Liberty Latin America Ltd.’s ownership interest in Liberty Communications of Puerto Rico LLC to us, thereby subjecting us and satellite-delivered programming services in which we have an interest to the program access rules.
FCC rules attribute the ownership interests in Charter and the cable operator subsidiaries of Liberty Broadband Corporation (“Liberty Broadband”) and Liberty Latin America Ltd.’s ownership interest in Liberty Communications of Puerto Rico LLC to us, thereby subjecting us and satellite-delivered programming services in which we have an interest to the program access rules.
QxH's closest video shopping competitor is ShopHQ and QVC International operations face similar competition in their respective markets, such as Jupiter Shop Channel in Japan, HSE in Germany and Austria, GM24 in Italy, and Ideal World in the U.K.
QxH's closest video shopping competitor is ShopHQ and QVC International operations face similar competition in their respective markets, such as Jupiter Shop Channel in Japan, HSE in Germany and Austria, GM24 in Italy, and The Jewellery Channel, Gems TV, and JML Direct in the U.K.
On February 10, 2021, the Council of the E.U. adopted final regulations regarding privacy and electronic communications that would complement the GDPR, including additional regulation of the Internet tracking tools known as “cookies.” The final regulations are subject to review by the European Parliament and the European Commission, and may be enacted in 2023.
On February 10, 2021, the Council of the E.U. adopted final regulations regarding privacy and electronic communications that would complement the GDPR, including additional regulation of the Internet tracking tools known as “cookies.” The final regulations are subject to review by the European Parliament and the European Commission, and the timing of enactment of the final regulations is uncertain.
In November 2020, California voters approved the California Privacy Rights Act of 2020 (“CPRA”), which amends and extends the CCPA and establishes the California Privacy Protection Agency to implement and enforce consumer privacy laws. Most of the CPRA’s provisions became effective on January 1, 2023.
In November 2020, California voters approved the California Privacy Rights Act of 2020 (“CPRA”), which amends and extends the CCPA and establishes the California Privacy Protection Agency to implement and enforce consumer privacy laws. Most of the CPRA’s provisions became effective on January 1, 2023. A growing number of states have enacted privacy laws in recent years.
The rules adopted by the FCC generally provided for mandatory carriage by cable systems of all local full-power commercial television broadcast signals selecting must carry rights and, depending on a cable system's channel capacity, non-commercial television broadcast signals.
The 1992 Cable Act granted broadcasters a choice of must carry rights or retransmission consent rights. The rules adopted by the FCC generally provided for mandatory carriage by cable systems of all local full-power commercial television broadcast signals selecting must carry rights and, depending on a cable system's channel capacity, non-commercial television broadcast signals.
Our online commerce businesses also are subject to laws governing the collection, use, retention, security and transfer of personally-identifiable information about their users. In particular, the collection and use of personal information by companies has received increased regulatory scrutiny on a global basis.
In 2016, Congress enacted a permanent moratorium on state and local taxes on Internet access. Our online commerce businesses also are subject to laws governing the collection, use, retention, security and transfer of personally-identifiable information about their users. In particular, the collection and use of personal information by companies has received increased regulatory scrutiny on a global basis.
Technical violations of certain privacy laws can result in significant penalties, including statutory penalties. In 2012, the FCC amended its regulations under the Telephone Consumer Protection Act ("TCPA"), which could subject our Internet businesses to increased liability for certain telephonic communications with customers, including but not limited to text messages to mobile phones.
In 2012, the FCC amended its regulations under the Telephone Consumer Protection Act ("TCPA"), which could subject our Internet businesses to increased liability for certain telephonic communications with customers, including but not limited to text messages to mobile phones.
As with all domestic tradenames or service marks, QVC's tradename and service mark registrations in the U.S. are for a ten year period and are renewable every ten years, prior to their respective expirations, as long as the tradenames or service marks are used in the regular course of trade.
QVC’s trademark and service mark registrations in the U.S. for “QVC” and “HSN” are for a ten year period and are renewable every ten years, prior to their respective expirations, as long as the trademarks or service marks are used in the regular course of trade.
As described above, our Company is party to a Services Agreement with LMC, pursuant to which, as of December 31, 2022, 83 LMC corporate employees provide certain management services to the Company for a determined fee.
As described above, our Company is party to a Services Agreement with LMC, pursuant to which, as of December 31, 2023, 86 LMC corporate employees provide certain management services to the Company for a I-14 Table of Contents determined fee.
See below for a description of an amendment to the Services Agreement entered into in December 2019. Qurate Retail reimburses LMC for direct, out-of-pocket expenses incurred by LMC in providing these services and for Qurate Retail's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to Qurate Retail.
Qurate Retail reimburses LMC for direct, out-of-pocket expenses incurred by LMC in providing these services and for Qurate Retail's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to Qurate Retail.
A failure to comply with such posted privacy I-14 Table of Contents policies or with the regulatory requirements of federal, state, or foreign privacy laws could result in proceedings or actions by governmental agencies or others (such as class action litigation) which could adversely affect the Company’s business.
A failure to comply with such posted privacy policies or with the regulatory requirements of federal, state, or foreign privacy laws could result in proceedings or actions by governmental agencies or others (such as class action litigation) which could adversely affect the Company’s business. Technical violations of certain privacy laws can result in significant penalties, including statutory penalties.
Both of these laws include statutory penalties for non-compliance. The Digital Millennium Copyright Act limits, but does not eliminate, liability for listing or linking to third party websites that may include content that infringes on copyrights or other rights so long as our Internet businesses comply with the statutory requirements.
The Digital Millennium Copyright Act limits, but does not eliminate, liability for listing or linking to third party websites that may include content that infringes on copyrights or other rights so long as our Internet businesses comply with the statutory requirements. Various states also have adopted laws regulating certain aspects of Internet communications.
On a trailing twelve month basis, total consolidated customers were approximately 13.2 million which includes 8.9 million QxH customers and 4.3 million QVC International customers. QVC believes its core customer base represents an attractive demographic target market.
I-8 Table of Contents On a trailing twelve month basis, total consolidated customers were approximately 12.1 million which includes 8.1 million QxH customers and 4.0 million QVC International customers. QVC believes its core customer base represents an attractive demographic target market.
In the same period, QVC attracted I-5 Table of Contents approximately 2.8 million new customers and the global e-commerce operation comprised $5.7 billion, or 57.2%, of QVC's consolidated net revenue for the year ended December 31, 2022. QVC operates twelve distribution centers and five contact centers worldwide.
In the same period, QVC attracted approximately 2.7 million new customers and the global e-commerce operation comprised $5.5 billion, or 58.6%, of QVC's consolidated net revenue for the year ended December 31, 2023. QVC operates eleven distribution centers and four contact centers worldwide.
Project Athens main initiatives include: (i) improve customer experience and grow relationships; (ii) rigorously execute core processes; (iii) lower cost to serve; (iv) optimize the brand portfolio; and (v) build new high growth businesses anchored in strength. During 2022 QVC commenced the first phase of Project Athens including actions to reduce inventory and a planned workforce reduction.
Project Athens main initiatives include: (i) improve customer experience and grow relationships; (ii) rigorously execute core processes; (iii) lower cost to serve; (iv) optimize the brand portfolio; and (v) build new high growth businesses anchored in strength.
QVC curates and sells a wide variety of consumer products via highly engaging, video-rich, interactive shopping experiences, distributed to approximately 217 million worldwide households each day through its broadcast networks.
References throughout this Annual Report on Form 10-K to “QVC” refer to QVC, Inc. and its consolidated subsidiaries. QVC curates and sells a wide variety of consumer products via highly engaging, video-rich, interactive shopping experiences, distributed to approximately 216 million worldwide households each day through its broadcast networks.
The price and availability of other programming and the conversion to digital programming platforms may unfavorably affect the placement of its programming in the channel line-ups of its distributors, I-9 Table of Contents and may affect its ability to obtain distribution agreements with small cable distributors.
The price and availability of other programming and the conversion to digital programming platforms may unfavorably affect the placement of its programming in the channel line-ups of its distributors, and may affect its ability to obtain distribution agreements with small cable distributors. Competition from other programming also affects the compensation that must be paid to distributors for carriage.
A portion of the grants made to our Chairman during the year ended December 31, 2020 related to our Company’s allocable portion of these upfront awards. * * * * * Cautionary Note Regarding Forward-Looking Statements Certain statements in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding business, product and marketing strategies; direct and indirect impacts of COVID-19 (as defined below); the impact of the fire at the Rocky Mount fulfillment center; insurance recoveries; the sale leaseback transactions; the remediation of a material weakness; new service offerings; revenue growth at QVC; synergies; the recoverability of goodwill and other intangible assets; projected sources and uses of cash; repayment of debt; fluctuations in interest rates and foreign currency exchange rates; and the anticipated impact of certain contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business.
For the years ended December 31, 2023, 2022 and 2021, the allocation percentage for the Company was 11%, 13% and 17%, respectively. * * * * * Cautionary Note Regarding Forward-Looking Statements Certain statements in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding business, product and marketing strategies; the impact of the fire at the Rocky Mount fulfillment center; insurance recoveries; revenue growth at QVC; synergies; the recoverability of goodwill and other intangible assets; projected sources and uses of cash; repayment of debt; fluctuations in interest rates and foreign currency exchange rates; and the anticipated impact of certain contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business.
Privacy Shield. On December 13, 2022, the European Commission issued an adequacy decision initiating the formal adoption process for the DPF.
Privacy Shield. On December 13, 2022, the European Commission issued an adequacy decision initiating the formal adoption process for the DPF, and the E.U. formally adopted the adequacy decision on July 10, 2023. The U.S. and the E.U. implemented the DPF in July 2023.
Competition from other programming also affects the compensation that must be paid to distributors for carriage. Principal competitive factors for QVC include (i) value, quality and selection of merchandise; (ii) customer experience, including customer service and speed, cost and reliability of fulfillment and delivery services; and (iii) convenience and accessibility of sales channels.
Principal competitive factors for I-9 Table of Contents QVC include (i) value, quality and selection of merchandise; (ii) customer experience, including customer service and speed, cost and reliability of fulfillment and delivery services; and (iii) convenience and accessibility of sales channels.
Under the Facilities Sharing Agreement, Qurate Retail shares office space with LMC and related amenities at LMC's corporate headquarters. In December 2019, the Company entered into an amendment to the Services Agreement with LMC in connection with LMC’s entry into a new employment arrangement with Gregory B. Maffei, the Company’s Chairman of the Board (the “Chairman”).
Under the Facilities Sharing Agreement, Qurate Retail shares office space with LMC and related amenities at LMC's corporate headquarters. In December 2019, the Company entered into an amended services agreement.
QVC believes that QxH is a leader in video shopping, e-commerce, mobile commerce and social commerce by curating quality products at outstanding values, providing exceptional customer service, establishing favorable channel positioning and multiple touchpoints across digital platforms and generating repeat business from its core customer base and that it also compares favorably in terms of sales to general, non-video based retailers due to its extensive customer reach and efficient cost structure.
QxH curates quality products at outstanding values, provides exceptional customer service, establishes favorable channel positioning and multiple touchpoints across digital platforms and generates repeat business from its core customer base. QxH sales compares favorably to general, non-video based retailers due to its extensive customer reach and efficient cost structure.
Certain email activities are subject to the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, commonly known as the CAN-SPAM Act. The CAN-SPAM Act regulates the sending of unsolicited commercial email by requiring the email sender, among other things, to comply with specific disclosure requirements and to provide an "opt-out" mechanism for recipients.
The CAN-SPAM Act regulates the sending of unsolicited commercial email by requiring the email sender, among other things, to comply with specific disclosure requirements and to provide an "opt-out" mechanism for recipients. Both of these laws include statutory penalties for non-compliance.
For the year ended December 31, 2022, QVC International operations, including its Digital Platforms, generated $2.5 billion, or 26%, of consolidated QVC net revenue and $358 million of Adjusted OIBDA. QVC International Digital Platform revenue as a percentage of total QVC International net revenue was 47.5%, 47.4% and 45.8% for the years ended December 31, 2022, 2021 and 2020, respectively.
For the year ended December 31, 2023, QVC International operations, including its Digital Platforms, generated $2.5 billion, or 26%, of consolidated QVC net revenue and $325 million of Adjusted OIBDA.
("QVC"), Cornerstone Brands, Inc. (“CBI”), Zulily, LLC (“Zulily”) and other cost and equity method investments. On September 23, 2011, Qurate Retail completed the split-off (the "LMC Split-Off") of a wholly owned subsidiary, Liberty Media Corporation ("LMC").
("QVC"), Cornerstone Brands, Inc. (“CBI”), and other cost method investments. On September 23, 2011, Qurate Retail completed the split-off (the "LMC Split-Off") of a wholly owned subsidiary, Liberty Media Corporation ("LMC"). Following the LMC Split-Off, Qurate Retail and LMC operate as separately publicly traded companies and neither has any stock ownership, beneficial or otherwise, in the other.
On June 27, 2022, Qurate Retail announced a five-point turnaround plan designed to stabilize and differentiate its core HSN and QVC U.S. brands and expand the company's leadership in video streaming commerce (“Project Athens”).
QVC believes that its significant market share, brand awareness, outstanding customer service, repeat customer base, flexible payment options, international reach and scalable infrastructure distinguish QVC from its competitors. On June 27, 2022, Qurate Retail announced a five-point turnaround plan designed to stabilize and differentiate its QVC-U.S. and HSN brands and expand the Company's leadership in video streaming commerce (“Project Athens”).
In 2022, QVC’s work force consisted of approximately 20,800 employees who handled approximately 112 million customer calls, shipped approximately 216 million units globally and served approximately 13.2 million unique customers.
In 2023, QVC’s work force consisted of approximately 18,400 employees who handled approximately 90 million customer calls, shipped approximately 204 million units globally and served approximately 12.1 million unique customers.
When considering such forward-looking statements, you should keep in mind the factors described in Item 1A, "Risk Factors" and other cautionary statements contained in this Annual Report. Such risk factors and statements describe circumstances which could cause actual results to differ materially from those contained in any forward-looking statement.
When considering such forward-looking statements, you should keep in mind the factors described in Item 1A, "Risk Factors" and other cautionary statements contained in this Annual Report on Form 10-K.
QxH, including its Digital Platforms, contributed $7.4 billion, or 74%, of consolidated net revenue and $750 million of Adjusted OIBDA (defined Part II, Item 7 of this report) for the year ended December 31, 2022.
QxH, including its Digital Platforms, contributed $7.0 billion, or 74%, of consolidated net revenue and $746 million of Adjusted OIBDA (defined in note 15 to the accompanying notes to our consolidated financial statements) for the year ended December 31, 2023.
Description of Business The following table identifies our subsidiaries: ​ Consolidated Subsidiaries QVC, Inc. Cornerstone Brands, Inc. Zulily, LLC ​ QVC On December 29, 2017, Qurate Retail completed the acquisition of the remaining 62% ownership interest of HSN, Inc. (“HSN”) in an all-stock transaction.
Cornerstone Brands, Inc. ​ QVC On December 29, 2017, Qurate Retail completed the acquisition of the remaining 62% ownership interest of HSN, Inc. (“HSN”) in an all-stock transaction. On December 31, 2018, Qurate Retail transferred our 100% ownership interest in HSN to QVC, Inc. through a transaction among entities under common control.
Although the FCC adopted regulations limiting carriage by a cable operator, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated the channel occupancy limits adopted by the FCC and remanded the rule to the FCC for further consideration in 2001. In response to the D.C.
Previously adopted FCC channel occupancy rules, which limited carriage by a cable operator of national programming services in which that operator holds an attributable interest, were vacated and remanded by the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) in 2001. Regulation of Carriage of Broadcast Stations .
These initiatives are consistent with QVC’s strategy to operate more efficiently as it implements its turnaround plan. QVC recorded restructuring charges of $24 million in restructuring and fire related costs, net of (recoveries) in the consolidated statement of operations during the year ended December 31, 2022, related to the workforce reduction.
QVC implemented a workforce reduction and recorded restructuring charges of $13 million and $24 million in restructuring, penalties and fire related costs, net of (recoveries) in the consolidated statement of operations during the years ended December 31, 2023 and 2022, respectively.
Under the amended Services Agreement, components of his compensation would either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc. (“TripAdvisor Holdings”), and Liberty Broadband Corporation (“Liberty Broadband”) (collectively, the “Service Companies”) or reimbursed to LMC, in each case, based on allocations among LMC and the Service Companies set forth in the amended Services Agreement.
Under the amended services agreement, components of LMC’s Chief Executive Officer’s compensation are either paid directly to him or reimbursed to LMC, in each case, based on allocations set forth in the amended services agreement.
These agreements include a reorganization agreement, a services agreement (the “Services Agreement”) and a facilities sharing agreement (the “Facilities Sharing Agreement”). Pursuant to the Services Agreement, LMC provides Qurate Retail with general and administrative services including legal, tax, accounting, treasury and investor relations support.
Pursuant to the Services Agreement, LMC provides Qurate Retail with general and administrative services including legal, tax, accounting, treasury, information technology (“IT”), cybersecurity, and investor relations support. See below for a description of an amendment to the Services Agreement entered into in December 2019.
Utah and Connecticut also have enacted consumer privacy statutes, and additional states likely will consider consumer privacy legislation in 2023. Complying with these different national and state privacy requirements may cause the Company to incur substantial costs. The Company also generally has and posts on its websites privacy policies and practices regarding the collection, use and disclosure of user data.
The Company also generally has and posts on its websites privacy policies and practices regarding the collection, use and disclosure of user data.
Merchandise QVC’s global merchandise mix features: (i) home, (ii) apparel, (iii) beauty, (iv) accessories, (v) electronics and (vi) jewelry. Many of its brands are exclusive, while others are created by well-known designers.
Many of its brands are exclusive, while others are created by well-known designers.

… 35 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

129 edited+38 added−61 removed171 unchanged
Biggest changeFailure to effectively manage such installment payment options could negatively impact our results of operations. ● Increases in labor costs. ● Natural disasters, political crises, and other catastrophic events or other events outside of our control, including climate change, may damage our facilities or the facilities of third parties on which we depend, adversely affect our ability to operate our businesses and have broader effects. ● Impairment of our goodwill or other intangible assets. ​ Risks Related to Technology and Information Security ● We have identified a material weakness in our internal control over financial reporting, that, if not properly remediated, could adversely affect our business and results of operations. ● Rapid technological advances could render the products and services offered by our subsidiaries and our business affiliates obsolete or non-competitive. ● Our E-commerce business could be negatively affected by changes in third-party digital platform algorithms and dynamics as well as our inability to monetize the resulting web traffic. ● System interruption and the lack of integration and redundancy in the systems and infrastructures of our subsidiary QVC and our other online commerce and catalog businesses may adversely affect their ability to, as applicable, operate their businesses, transmit their television programs, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations. ● The processing, storage, sharing, use, disclosure and protection of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights. ● Our businesses may experience difficulty in the ongoing development, implementation and customer acceptance of applications for personal electronic devices, which could harm their business. ● Our businesses are subject to cyber security risks, including security breaches and identity theft. ​ Risks Related to our Facilities and Third-Party Suppliers and Vendors ● Our programming and online commerce businesses rely on distribution facilities to operate their business, and any damage to one of these facilities, or any disruptions caused by incorporating new facilities into their operations, could have a material adverse impact on their business. ● Our home television and online commerce businesses rely on independent shipping companies to deliver the products they sell. ● Our programming and online commerce businesses depend on their relationships with third party suppliers and vendors and any adverse changes in these relationships could adversely affect our results of operations. ● The unanticipated loss of certain larger vendors or the consolidation of our programming and online commerce businesses’ vendors could negatively impact their sales and profitability on a short term basis. ​ I-18 Table of Contents Risks Related to the Seasonality of Our Business ● Certain of our businesses face significant inventory risk. ● The seasonality of our businesses places increased strain on their operations. ​ Risk Related to Management and Key Personnel ● The success of our home television and online commerce businesses depends in large part on their ability to recruit and retain key personnel capable of executing their unique business models. ● We have overlapping directors and officers with LMC, TripAdvisor Holdings, Liberty Broadband, and, following LMC’s proposed split-off of its subsidiary Atlanta Braves Holdings, Inc.
Biggest changeI-16 Table of Contents ● Impairment of our goodwill or other intangible assets could have a material adverse effect on our business, results of operations and financial condition. ● Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties. ​ Risks Related to Technology and Information Security ● Rapid technological advances could render the products and services offered by our subsidiaries and our business affiliates obsolete or non-competitive. ● Our E-commerce business could be negatively affected by changes in third-party digital platform algorithms and dynamics as well as our inability to monetize the resulting web traffic. ● System interruption and the lack of integration and redundancy in the systems and infrastructures of our subsidiary QVC and our other online commerce and catalog businesses may adversely affect their ability to, as applicable, operate their businesses, transmit their television programs, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations. ● The processing, storage, sharing, use, disclosure and protection of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements or differing views of personal privacy rights. ● Our businesses may experience difficulty in the ongoing development, implementation and customer acceptance of applications for personal electronic devices, which could harm their business. ● Our businesses and information systems are subject to cybersecurity risks, including cybersecurity threats and cybersecurity incidents. ​ Risks Related to our Facilities and Third-Party Suppliers and Vendors ● Our programming and online commerce businesses rely on distribution facilities to operate their business, and any damage to one of these facilities, or any disruptions caused by incorporating new facilities into their operations, could have a material adverse impact on their business. ● Our home television and online commerce businesses rely on independent shipping companies to deliver the products they sell. ● Our programming and online commerce businesses depend on their relationships with third party suppliers and vendors and any adverse changes in these relationships could adversely affect our results of operations. ● The unanticipated loss of certain larger vendors or the consolidation of our programming and online commerce businesses’ vendors could negatively impact their sales and profitability on a short term basis. ​ Risks Related to the Seasonality of Our Business ● Certain of our businesses face significant inventory risk. ● The seasonality of certain of our businesses places increased strain on their operations. ​ Risk Related to Management and Key Personnel ● The success of our home television and online commerce businesses depends in large part on their ability to recruit and retain key personnel capable of executing their unique business models. ● We have overlapping directors and officers with LMC, Liberty TripAdvisor Holdings, Inc.
Each of Liberty Broadband and TripAdvisor Holdings has renounced its rights to certain business opportunities and their respective restated certificate of incorporation contains provisions deeming directors and officers not in breach of their fiduciary duties in certain cases for directing a corporate opportunity to another person or entity (including LMC, TripAdvisor Holdings, Liberty Broadband and ABH, as the case may be) instead of the respective company.
Each of Liberty Broadband, TripAdvisor Holdings and ABH has renounced its rights to certain business opportunities and their respective restated certificate of incorporation contains provisions deeming directors and officers not in breach of their fiduciary duties in certain cases for directing a corporate opportunity to another person or entity (including LMC, TripAdvisor Holdings, Liberty Broadband and ABH, as the case may be) instead of the respective company.
Any such violation, even if prohibited by the policies and procedures of these subsidiaries and business affiliates or the law, could have certain adverse effects on the financial condition of these subsidiaries and business affiliates.
Any such violation, even if prohibited by the policies and procedures of these subsidiaries and business affiliates or the law, could have certain adverse effects on the financial condition of these subsidiaries and business affiliates.
Consequently, until QVC’s leverage ratio under its senior secured notes is not greater than 3.5 to 1.0, we will not be able to rely on QVC’s cash flow for certain purposes (including to fund acquisitions or our other operational requirements), other than the service of our debt or to pay certain tax obligations related to QVC and its subsidiaries (which payments may be made by QVC to us under an intercompany tax sharing agreement in respect of certain tax obligations of QVC and its subsidiaries).
Consequently, until QVC’s leverage ratio under its senior secured notes is not greater than 3.5 to 1.0, we will not be able to rely on QVC’s cash flow for certain purposes (including to fund acquisitions or our other operational requirements), other than the service of our debt and to pay certain tax obligations related to QVC and its subsidiaries (which payments may be made by QVC to us under an intercompany tax sharing agreement in respect of certain tax obligations of QVC and its subsidiaries).
These provisions include: ● authorizing a capital structure with multiple series of common stock, a Series B common stock that entitles the holders to ten votes per share, a Series A common stock that entitles the holder to one vote per share, I-40 Table of Contents and a Series C common stock that except as otherwise required by applicable law, entitles the holder to no voting rights; ● classifying the Board of Directors with staggered three-year terms, which may lengthen the time required to gain control of the Board of Directors; ● limiting who may call special meetings of stockholders; ● prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of the stockholders; ● establishing advance notice requirements for nominations of candidates for election to the Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; ● requiring stockholder approval by holders of at least 66 2/3% of our aggregate voting power or the approval by at least 75% of the Board of Directors with respect to certain extraordinary matters, such as a merger or consolidation of our Company, a sale of all or substantially all of our assets or an amendment to our restated charter; and ● the existence of authorized and unissued stock, including "blank check" preferred stock, which could be issued by the Board of Directors to persons friendly to our then current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of our Company.
These provisions include: ● authorizing a capital structure with multiple series of common stock, a Series B common stock that entitles the holders to ten votes per share, a Series A common stock that entitles the holder to one vote per share, and a Series C common stock that except as otherwise required by applicable law, entitles the holder to no voting rights; ● classifying the Board of Directors with staggered three-year terms, which may lengthen the time required to gain control of the Board of Directors; ● limiting who may call special meetings of stockholders; ● prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of the stockholders; ● establishing advance notice requirements for nominations of candidates for election to the Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; I-38 Table of Contents ● requiring stockholder approval by holders of at least 66 2/3% of our aggregate voting power or the approval by at least 75% of the Board of Directors with respect to certain extraordinary matters, such as a merger or consolidation of our Company, a sale of all or substantially all of our assets or an amendment to our restated charter; and ● the existence of authorized and unissued stock, including "blank check" preferred stock, which could be issued by the Board of Directors to persons friendly to our then current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of our Company.
Prolonged economic uncertainty in various regions of the world in which our subsidiaries and business affiliates operate could adversely affect demand for our businesses’ products and services since a substantial portion of our businesses’ revenue is derived from discretionary spending by individuals, which typically falls during times of inflation, recession and economic instability.
Prolonged economic weakness and uncertainty in various regions of the world in which our subsidiaries and business affiliates operate could adversely affect demand for our businesses’ products and services since a substantial portion of our businesses’ revenue is derived from discretionary spending by individuals, which typically falls during times of inflation, recession and economic instability.
QVC’s installment payment option is currently offered on most of its merchandise and for QVC U.S. website and mobile sales and QVC U.K. mobile sales, is set as the default payment option on all products on which it is offered. Full payment for merchandise at the time of sale would require the customer to affirmatively change to that option.
QVC’s installment payment option is currently offered on most of its merchandise and for QVC U.S. website and mobile sales, is set as the default payment option on all products on which it is offered. Full payment for merchandise at the time of sale would require the customer to affirmatively change to that option.
The failure of these businesses to protect their intellectual property rights, particularly their proprietary brands, in a meaningful manner or third party challenges to related contractual rights could result in erosion of brand names and limit the ability of these businesses to control marketing on or through the Internet using their various domain names, which could adversely affect the business, financial condition and results of operations of these businesses, as well as the financial condition and results of operations of our Company. ​ I-26 Table of Contents Natural disasters, political crises, and other catastrophic events or other events outside of our control, including climate change, may damage our facilities or the facilities of third parties on which we depend, adversely affect our ability to operate our businesses and have broader effects.
The failure of these businesses to protect their intellectual property rights, particularly their proprietary brands, in a meaningful manner or third party challenges to related contractual rights could result in erosion of brand names and limit the ability of these businesses to I-23 Table of Contents control marketing on or through the Internet using their various domain names, which could adversely affect the business, financial condition and results of operations of these businesses, as well as the financial condition and results of operations of our Company. ​ Natural disasters, political crises, and other catastrophic events or other events outside of our control, including climate change, may damage our facilities or the facilities of third parties on which we depend, adversely affect our ability to operate our businesses and have broader effects .
If any of these relationships were to terminate or if a shipping company was unable to fulfill its obligations under its contract for any reason, these businesses would have to work with other shipping companies to deliver merchandise to customers, which would most likely be at less favorable rates.
If any of these relationships were to terminate or if a shipping company were unable to fulfill its obligations under its contract for any reason, these businesses would have to work with other shipping companies to deliver merchandise to customers, which would most likely be at less favorable rates.
The success of our online commerce businesses depends on a high degree of website traffic, which is dependent on many factors, including the availability of appealing website content, user loyalty and new user generation from various digital marketing channels that charge a fee.
The success of our online commerce businesses and our online marketing efforts depends on a high degree of website traffic, which is dependent on many factors, including the availability of appealing website content, user loyalty and new user generation from various digital marketing channels that charge a fee.
Like many e-commerce companies, we frequently encounter unauthorized parties attempting to gain access to our businesses’ or our businesses’ vendors’ systems by, among other things, hacking those systems, through fraud or other means of deceiving our businesses’ employees, partners or vendors, or burglaries.
Like many e-commerce companies, we frequently encounter unauthorized parties attempting to gain access to our businesses’ or our businesses’ vendors’ information systems by, among other things, hacking those systems, through fraud or other means of deceiving our businesses’ employees, partners or vendors, or burglaries.
The indebtedness of QVC, combined with other financial obligations and contractual commitments, could among other things: ● increase QVC’s vulnerability to general adverse economic and industry conditions; ● require a substantial portion of QVC’s cash flow from operations to be dedicated to the payment of principal and interest on its indebtedness; ● limit QVC’s ability to use cash flow or obtain additional financing for future working capital, capital expenditures or other general corporate purposes, which reduces the funds available to it for operations and any future business opportunities; ● limit flexibility in planning for, or reacting to, changes in its business and the markets in which it operates; ● competitively disadvantage QVC compared with competitors that have less debt; I-37 Table of Contents ● limit QVC’s ability to borrow additional funds or to borrow funds at rates or on other terms that it finds acceptable; and ● expose QVC to the risk of increased interest rates because certain of QVC’s borrowings, including borrowings under the Credit Facility, are at variable interest rates. ​ Limitations imposed as a part of the debt, such as the availability of credit and the existence of restrictive covenants may, among other things: ● make it difficult for QVC to satisfy its financial obligations, including making scheduled principal and interest payments on the notes and its other indebtedness; ● restrict QVC from making strategic acquisitions or cause it to make non-strategic divestitures; ● limit QVC’s ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes on satisfactory terms or at all; ● limit QVC’s flexibility to plan for, or react to, changes in its business and industry; ● place QVC at a competitive disadvantage compared to its less leveraged competitors; and limit its ability to respond to business opportunities.
The indebtedness of QVC, combined with other financial obligations and contractual commitments, could among other things: ​ ● increase QVC’s vulnerability to general adverse economic and industry conditions; ● require a substantial portion of QVC’s cash flow from operations to be dedicated to the payment of principal and interest on its indebtedness; ● limit QVC’s ability to use cash flow or obtain additional financing for future working capital, capital expenditures or other general corporate purposes, which reduces the funds available to it for operations and any future business opportunities; ● limit flexibility in planning for, or reacting to, changes in its business and the markets in which it operates; ● competitively disadvantage QVC compared with competitors that have less debt; ● limit QVC’s ability to borrow additional funds or to borrow funds at rates or on other terms that it finds acceptable; and ● expose QVC to the risk of increased interest rates because certain of QVC’s borrowings, including borrowings under the Credit Facility, are at variable interest rates. ​ Limitations imposed as a part of the debt, such as the availability of credit and the existence of restrictive covenants may, among other things: ● make it difficult for QVC to satisfy its financial obligations, including making scheduled principal and interest payments on the notes and its other indebtedness; ● restrict QVC from making strategic acquisitions or cause it to make non-strategic divestitures; ● limit QVC’s ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes on satisfactory terms or at all; ● limit QVC’s flexibility to plan for, or react to, changes in its business and industry; ● place QVC at a competitive disadvantage compared to its less leveraged competitors; and limit its ability to respond to business opportunities.
Although we have not detected a material security breach or cybersecurity incident to date, we have been the target of events of this nature and expect to be subject to similar attacks in the future.
Although we have not detected a material security breach or other cybersecurity incident to date, we have been the target of events of this nature and expect to be subject to similar attacks in the future.
Likewise, any such persons who serve in similar capacities at LMC, TripAdvisor Holdings, or Liberty Broadband (or who will serve in similar capacities at ABH) or any other public company have fiduciary duties to that company’s stockholders.
Likewise, any such persons who serve in similar capacities at LMC, TripAdvisor Holdings, Liberty Broadband or ABH or any other public company have fiduciary duties to that company’s stockholders.
QVC also competes for access to customers and audience share with other providers of televised, online and hard copy entertainment and content. Similarly, Zulily and CBI compete with e-commerce businesses such as Amazon.com, Inc. and Alibaba Group, the e-commerce platforms of traditional retailers such as Target Corporation and Wal-Mart Stores, Inc., and online marketplaces such as eBay Inc.
QVC also competes for access to customers and audience share with other providers of televised, online and hard copy entertainment and content. Similarly, CBI competes with e-commerce businesses such as Amazon.com, Inc. and Alibaba Group, the e-commerce platforms of traditional retailers such as Target Corporation and Wal-Mart Stores, Inc., and online marketplaces such as eBay Inc.
Fire, flood, power loss, telecommunications failure, hurricanes, tornadoes, earthquakes, public health crises (such as pandemics and epidemics) acts of war or terrorism, acts of God and similar events or disruptions may damage or interrupt television I-29 Table of Contents transmissions, computer, broadband or other communications systems and infrastructures at any time.
Fire, flood, power loss, telecommunications failure, hurricanes, tornadoes, earthquakes, public health crises (such as pandemics and epidemics) acts of war or terrorism, acts of God and I-27 Table of Contents similar events or disruptions may damage or interrupt television transmissions, computer, broadband or other communications systems and infrastructures at any time.
The loss of confidence in our online commerce businesses resulting from any such security breaches or identity theft could adversely affect the business, financial condition and results of operations of our online commerce businesses and, as a result, our Company. ​ Risks Related to Our Businesses’ Facilities and Third Party Suppliers and Vendors ​ Our programming and online commerce businesses rely on distribution facilities to operate their business, and any damage to one of these facilities, or any disruptions caused by incorporating new facilities into their operations, could have a material adverse impact on their business.
The loss of confidence in and damage to the reputation of our online commerce businesses resulting from any such cybersecurity incidents, such as security breaches or identity theft, could adversely affect the business, financial condition and results of operations of our online commerce businesses and, as a result, our Company. ​ Risks Related to Our Businesses’ Facilities and Third Party Suppliers and Vendors ​ Our programming and online commerce businesses rely on distribution facilities to operate their business, and any damage to one of these facilities, or any disruptions caused by incorporating new facilities into their operations, could have a material adverse impact on their business.
QVC’s, CBI’s and Zulily’s failure, and/or the failure by the various third party vendors and service providers with which QVC, CBI and Zulily do business, to comply with applicable privacy policies or federal, state or similar international laws and regulations, or changes in applicable laws and regulations, or any compromise of security that results in the unauthorized release of personally identifiable information or other user data could damage QVC’s, CBI’s and Zulily’s reputations and the reputation of their third party vendors and service providers, discourage potential users from trying their products and services and/or result in fines and/or proceedings by governmental agencies and/or consumers, any one or all of which could adversely affect QVC’s, CBI’s and Zulily’s business, financial condition I-30 Table of Contents and results of operations and, as a result, our Company.
QVC’s and CBI’s failure, and/or the failure by the various third party vendors and service providers with which QVC and CBI do business, to comply with applicable privacy policies or federal, state or similar I-28 Table of Contents international laws and regulations, or changes in applicable laws and regulations, or any compromise of security that results in the unauthorized release of personally identifiable information or other user data could damage QVC’s and CBI’s reputations and the reputation of their third party vendors and service providers, discourage potential users from trying their products and services and/or result in fines and/or proceedings by governmental agencies and/or consumers, any one or all of which could adversely affect QVC’s and CBI’s business, financial condition and results of operations and, as a result, our Company.
As of December 31, 2022, QVC’s leverage ratio (as calculated under its senior secured notes) was greater than 3.5 to 1.0 and as a result there are restrictions on QVC’s ability to pay certain dividends or make other restricted payments to us.
As of December 31, 2023, QVC’s leverage ratio (as calculated under its senior secured notes) was greater than 3.5 to 1.0 and as a result there are restrictions on QVC’s ability to pay certain dividends or make other restricted payments to us.
These factors or future I-19 Table of Contents developments could include the incurrence of higher than expected costs or delays in workforce reduction measures, actual savings differing from anticipated cost savings, anticipated benefits from business improvement initiatives not materializing and disruptions to normal operations or other unintended adverse impacts resulting from the initiatives. ​ Our subsidiary QVC depends on the television distributors that carry its programming, and no assurance can be given that QVC will be able to maintain and renew its affiliation agreements on favorable terms or at all.
These factors or future developments could include the incurrence of higher than expected costs or delays in workforce reduction measures, actual savings differing from anticipated cost savings, anticipated benefits from business improvement initiatives not materializing and disruptions to normal operations or other unintended adverse impacts resulting from the initiatives. ​ Our subsidiary QVC depends on the television distributors that carry its programming, and no assurance can be given that QVC will be able to maintain and renew its affiliation agreements on favorable terms or at all.
For example, any resurgence of COVID-19, or future pandemic or epidemic, in the areas where these distribution facilities are located, or if these businesses are unable to adequately staff the distribution facilities to meet demand in the future, or if the cost of such staffing is higher than historical or projected costs due to wage increases, labor shortages, regulatory changes, or other factors, could harm our operating results.
For example, any future pandemic or epidemic, in the areas where these distribution facilities are located, or if these businesses are unable to adequately staff the distribution facilities to meet demand in the future, or if the cost of such staffing is higher than historical or projected costs due to wage increases, labor shortages, regulatory changes, or other factors, could harm our operating results.
New developments in other areas, such as cloud I-28 Table of Contents computing, could also make it easier for competition to enter their markets due to lower up-front technology costs.
New developments in other areas, such as cloud I-26 Table of Contents computing, could also make it easier for competition to enter their markets due to lower up-front technology costs.
Additionally, Mobile application distribution platforms, such as Apple’s App Store and the Amazon Appstore for Android, may require that third party digital platforms and ecommerce companies present users with an option where the user chooses to opt-in or opt-out of tracking technology used by these third party digital platforms or included in mobile applications.
Additionally, Mobile application distribution platforms, such as Apple’s App Store and the Amazon Appstore for Android, may require that third party digital platforms and e-commerce companies present users with an option where the user chooses to opt-in or opt-out of tracking technology used by these third party digital platforms or included in mobile applications.
For example, as a result of COVID-19 many consumers significantly increased their use of ecommerce which resulted in a significant increase in the volume of packages handled by third-party carriers, including those our businesses rely on, which result in delayed merchandise and cause our businesses’ customers to experience delays in their order delivery.
For example, as a result of COVID-19 many consumers significantly increased their use of e-commerce which resulted in a significant increase in the volume of packages handled by third-party carriers, including those our businesses rely on, which result in delayed merchandise and cause our businesses’ customers to experience delays in their order delivery.
Our subsidiaries and business affiliates regard their respective intellectual property rights, including service marks, tradenames and domain names, copyrights (including their programming and their websites), trade secrets and similar intellectual property, as critical to their success. These businesses also rely heavily upon software codes, informational databases and other components that make up their products and services.
Our subsidiaries and business affiliates regard their respective intellectual property rights, including service marks, trademarks, patents and domain names, copyrights (including their programming and their websites), trade secrets and similar intellectual property, as critical to their success. These businesses also rely heavily upon software codes, informational databases and other components that make up their products and services.
To the extent this rule is finalized as proposed, we could incur increased costs relating to the assessment and disclosure of climate-related risks. ​ I-22 Table of Contents Legislation or regulations related to climate change that potentially impose restrictions, caps, taxes or other controls on energy use, packaging and waste, sustainable supply chain practices, animal health and welfare and water use may have a material adverse effect on our results of operations.
To the extent this rule is finalized as proposed, we could incur increased costs relating to the assessment and disclosure of climate-related risks. ​ Legislation or regulations related to climate change that potentially impose restrictions, caps, taxes or other controls on energy use, packaging and waste, sustainable supply chain practices, animal health and welfare and water use may have a material adverse effect on our results of operations.
In addition, an increase in interest rates could reduce consumer confidence, discretionary spending by individuals and adversely affect market demand for our products, which could materially adversely affect our businesses, financial condition and results of operations. ​ Significant developments stemming from U.S. and international trade policy with China, including in response to forced labor and human rights abuses in China, may adversely impact our businesses and operating results.
In addition, an increase in interest rates could reduce I-34 Table of Contents consumer confidence, discretionary spending by individuals and adversely affect market demand for our products, which could materially adversely affect our businesses, financial condition and results of operations. ​ Significant developments stemming from U.S. and international trade policy with China, including in response to forced labor and human rights abuses in China, may adversely impact our businesses and operating results.
Certain of our businesses are subject to consent decrees issued by the FTC barring them from making deceptive claims for specified weight-loss products and dietary supplements and prohibiting them from making certain claims about specified weight-loss, dietary supplement and anti-cellulite products unless they have competent and reliable scientific evidence to substantiate such claims.
Certain of our businesses are subject to consent decrees issued by the FTC barring them from making deceptive claims for specified weight-loss, dietary supplement and anti-cellulite products unless they have competent and reliable scientific evidence to substantiate such claims.
As a result, our businesses are subject to a wide variety of statutes, rules, regulations, policies and procedures in various jurisdictions, including foreign jurisdictions, which are subject to change at any time, including laws regarding consumer protection, data privacy and security, the regulation of retailers generally, the license requirements for television retailers in foreign jurisdictions, the importation, sale and promotion of merchandise and the operation of retail stores and warehouse facilities, as well as laws and regulations applicable to the Internet and businesses engaged in online commerce, such as those regulating the sending of unsolicited, commercial electronic mail and texts.
As a result, our businesses are subject to a wide variety of laws, rules, regulations, policies and procedures in various jurisdictions, including foreign jurisdictions, which are subject to change at any time, including laws regarding consumer protection, privacy, the regulation of retailers generally, the license requirements for television retailers in foreign jurisdictions, the importation, sale and promotion of merchandise and the operation of retail stores and warehouse facilities, as well as laws and regulations applicable to the Internet and businesses engaged in e-commerce, such as those regulating the sending of unsolicited, commercial electronic mail and texts.
The WRO applies to, among I-36 Table of Contents other things, cotton grown in the XUAR and to all products made in whole or in part using such cotton, regardless of where the downstream products are produced, and importers are responsible for ensuring the products they are attempting to import do not exploit forced labor at any point in their supply chain, including the production or harvesting of the raw material.
The WRO applies to, among other things, cotton grown in the XUAR and to all products made in whole or in part using such cotton, regardless of where the downstream products are produced, and importers are responsible for ensuring the products they are attempting to import do not exploit forced labor at any point in their supply chain, including the production or harvesting of the raw material.
Although QVC has attempted to adapt its offerings to changing consumer behaviors, virtual multichannel video providers, online video distributors and programming networks I-24 Table of Contents providing their content directly to consumers over the internet rather than through traditional television services continue to emerge, gain consumer acceptance and disrupt traditional television distribution services, which QVC relies on for the distribution of its television programming.
Although QVC has attempted to adapt its offerings to changing consumer behaviors, virtual multichannel video providers, online video distributors and programming networks providing their content directly to consumers over the internet rather than through traditional television services continue to emerge, gain consumer acceptance and disrupt traditional television distribution services, which QVC relies on for the distribution of its television programming.
Any potential conflict that I-34 Table of Contents qualifies as a "related party transaction" (as defined in Item 404 of Regulation S-K under the Securities Act of 1933, as amended) is subject to review by an independent committee of the applicable issuer's board of directors in accordance with its corporate governance guidelines.
Any potential conflict that qualifies as a "related party transaction" (as defined in Item 404 of Regulation S-K under the Securities Act of 1933, as amended) is subject to review by an independent committee of the applicable issuer's Board of Directors in accordance with its corporate governance guidelines.
If QVC were unable to repay those amounts, the lenders could proceed against the I-38 Table of Contents collateral granted to them to secure that indebtedness. The Credit Facility and its notes are, and certain future indebtedness may be, secured by a first priority perfected lien in all shares of its capital stock.
If QVC were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness. The Credit Facility and its notes are, and certain future indebtedness may be, secured by a first priority perfected lien in all shares of its capital stock.
Future outlook declines in revenue, cash flows, or other factors could result in a further decrease in fair value that may result in a determination that carrying value adjustments are required, which could be material, and we could be required to record additional impairment charges on our goodwill or other identifiable intangible assets in the future, which could result in reductions to stockholders’ equity and material non-cash charges to our earnings and may negatively impact our stock price and financial condition.
Future outlook declines in revenue, cash flows, or other factors could result in a further decrease in fair value that may result in a determination that carrying value adjustments are required, which could be material, and we could be required to record additional impairment I-25 Table of Contents charges on our goodwill or other identifiable intangible assets in the future, which could result in reductions to stockholders’ equity and material non-cash charges to our earnings and may negatively impact our stock price and financial condition.
Increases in raw material costs or wage rates, unless sufficiently offset by our pricing actions, may cause a decrease in our businesses’ profitability and negatively impact our businesses’ sales volume. ​ Risks Related to Our Indebtedness and Common Stock Our subsidiary QVC has significant indebtedness, which could limit its flexibility to respond to current market conditions, restrict its business activities and adversely affect its financial condition.
Increases in raw material costs or wage rates, unless sufficiently offset by our pricing actions, may cause a decrease in our businesses’ profitability and negatively impact our businesses’ sales volume. ​ I-35 Table of Contents Risks Related to Our Indebtedness and Common Stock Our subsidiary QVC has significant indebtedness, which could limit its flexibility to respond to current market conditions, restrict its business activities and adversely affect its financial condition .
Such process could result in a delay or complete inability to import such goods, which could result in inventory shortages and lost sales. Additionally, the United States Treasury Department placed sanctions on China’s Xinjiang Production and Construction Corporation (“XPCC”) for serious human rights abuses against ethnic minorities in the XUAR.
Such process could result in a delay or complete inability to import such goods, which could result in inventory shortages and lost sales. Additionally, the U.S. Treasury Department placed sanctions on China’s Xinjiang Production and Construction Corporation (“XPCC”) for serious human rights abuses against ethnic minorities in the XUAR.
If QVC were unsuccessful, the lenders under the Credit Facility and the holders of its existing notes could demand repayment of the indebtedness owed to them on the relevant maturity date, which could adversely affect its and our financial condition. Covenants in QVC’s debt agreements could restrict its business in many ways.
If QVC were unsuccessful, the lenders under the Credit Facility and the holders of its existing notes could demand repayment of the indebtedness owed to them on the relevant maturity date, which could adversely affect its and our financial condition. I-36 Table of Contents Covenants in QVC’s debt agreements could restrict its business in many ways.
Implementing these changes may increase our costs to maintain our installment payment options and may make our installment payment options less desirable to our customers which could lead to a decline in sales; additionally, failure to comply with these laws and regulations could result in the imposition of fines and penalties, any of which could have an adverse effect on our results of operations. ​ In addition, QVC U.S., HSN and Zulily have agreements with a large consumer financial institution (the “Bank”) pursuant to which the Bank provides revolving credit directly to U.S. customers for the sole purpose of purchasing merchandise from QVC U.S., HSN and Zulily with a branded credit card (for QVC U.S. the “Q Card”, for HSN the “HSN Credit Card” and for Zulily the “Zulily Credit Card”).
Implementing these changes may increase our costs to maintain our installment payment options and may make our installment payment options less desirable to our customers which could lead to a decline in sales; additionally, failure to comply with these laws and regulations could result in the imposition of fines and penalties, any of which could have an adverse effect on our results of operations. ​ In addition, QxH has agreements with a large consumer financial institution (the “Bank”) pursuant to which the Bank provides revolving credit directly to U.S. customers for the sole purpose of purchasing merchandise from QVC with a private label credit card (for QVC U.S. the “Q Card” and for HSN the “HSN Credit Card”).
Any failure to deliver products to their customers in a timely and accurate manner may damage their reputation and brand and could cause them to lose customers. Enforcement actions by customs agencies can also cause the costs of imported goods to increase, negatively affecting I-32 Table of Contents profits.
Any failure to deliver products to their customers in a timely and accurate manner may damage their reputation and brand and could cause them to lose customers. Enforcement actions by customs agencies can also cause the costs of imported goods to increase, negatively affecting profits.
I-35 Table of Contents Although certain of our subsidiaries and business affiliates have undertaken compliance efforts with respect to these laws, their respective employees, contractors and agents, as well as those companies to which they outsource certain of their business operations, may take actions in violation of their policies and procedures.
Although certain of our subsidiaries and business affiliates have undertaken compliance efforts with respect to these laws, their respective employees, contractors and agents, as well as those companies to which they outsource certain of their business operations, may take actions in violation of their policies and procedures.
There was $2.15 billion of unused capacity under the Credit Facility. In addition, QVC had $4 million of finance lease obligations and $412 million of operating lease liabilities. QVC may incur significant additional indebtedness in the future. If new indebtedness is added to QVC’s current debt levels, the related risks that it now faces could intensify.
There was $2.28 billion of unused capacity under the Credit Facility. In addition, QVC had $2 million of finance lease obligations and $515 million of operating lease liabilities. QVC may incur significant additional indebtedness in the future. If new indebtedness is added to QVC’s current debt levels, the related risks that it now faces could intensify.
Moreover, most of our Company's directors and officers own or will own LMC, TripAdvisor Holdings, Liberty Broadband and/or ABH stock and equity awards. These ownership interests could create, or appear to create, potential conflicts of interest when the applicable individuals are faced with decisions that could have different implications for our Company, LMC, TripAdvisor Holdings, Liberty Broadband and/or ABH.
Moreover, most of our Company's directors and officers own LMC, TripAdvisor Holdings, Liberty Broadband and/or I-32 Table of Contents ABH stock and equity awards. These ownership interests could create, or appear to create, potential conflicts of interest when the applicable individuals are faced with decisions that could have different implications for our Company, LMC, TripAdvisor Holdings, Liberty Broadband and/or ABH.
Our businesses have implemented measures and processes intended to secure their information technology systems and prevent disruptions in services or unauthorized access to or loss of sensitive data, but as with all companies, these security measures may not be sufficient for all eventualities and there is no guarantee that they will be adequate to safeguard against all cyber-attacks, system compromises or misuses of data.
Our businesses have implemented measures and processes intended to secure their information systems and prevent disruptions in services or unauthorized access to or loss of sensitive data, but as with all companies, these security measures may not be sufficient for all eventualities and there is no guarantee that they will be adequate to safeguard against all cybersecurity threats or cybersecurity incidents, information system compromises or misuses of data.
Security breaches could also significantly damage their reputation with their customers and third parties with whom they do business, which could result in lost sales and customer and vendor attrition.
Security breaches and other cybersecurity incidents could also significantly damage their reputation with their customers and third parties with whom they do business, which could result in lost sales and customer and vendor attrition.
The failure by our I-21 Table of Contents businesses to comply with these laws and regulations could result in a revocation of required licenses, fines and/or proceedings by governmental agencies and/or consumers, which could adversely affect our businesses, financial condition and results of operations.
The failure by our businesses to comply with these laws and regulations could result in a revocation of required licenses, fines and/or proceedings by governmental agencies and/or consumers, which could adversely affect our businesses, financial condition and results of operations.
Specifically, personally identifiable information is increasingly subject to changing legislation and regulations, in numerous jurisdictions around the world, which are intended to protect the privacy of personal information that is collected, processed and transmitted in or from the governing jurisdiction.
Specifically, personally identifiable information is increasingly subject to changing legislation and regulations, in numerous jurisdictions around the world, which are intended to protect the privacy and provide consumers more control of personal information that is collected, processed and transmitted in or from the governing jurisdiction.
For example, there may be the potential for a conflict of interest when our Company, LMC, TripAdvisor Holdings, or Liberty Broadband (or following the proposed split-off ABH) looks at acquisitions and other corporate opportunities that may be suitable for each of them.
For example, there may be the potential for a conflict of interest when our Company, LMC, TripAdvisor Holdings, Liberty Broadband, or ABH looks at acquisitions and other corporate opportunities that may be suitable for each of them.
Among other things, the UFLPA imposes a presumptive ban on the import of goods to the United States that are made, wholly or in part, in the XUAR or by persons that participate in certain programs in the XUAR that entail the use of forced labor.
Among other things, the UFLPA imposes a presumptive ban on the import of goods to the U.S. that are made, wholly or in part, in the XUAR or by persons that participate in certain programs in the XUAR that entail the use of forced labor.
Our sources of cash include our available cash balances, net cash from operating I-39 Table of Contents activities, dividends and interest from our investments, availability under credit facilities at the operating subsidiary level, monetization of our public investment portfolio and proceeds from asset sales.
Our sources of cash include our available cash balances, net cash from operating activities, dividends and interest from our investments, availability under credit facilities at the operating subsidiary level, monetization of our public investment portfolio and proceeds from asset sales.
Any disruptions of our computer systems or misappropriation or misuse of customer, employee or other personal information, whether at our businesses’ or any of our businesses’ vendors, could cause interruptions in the operations of our businesses and subject them to increased costs, fines, litigation, regulatory actions and other liabilities.
Any disruptions of our information systems or misappropriation or misuse of customer, employee or other personal information, whether at our businesses’ or any of our businesses’ vendors, could cause interruptions in the operations of our businesses and subject them to increased costs, fines, litigation, regulatory I-29 Table of Contents actions and other liabilities.
Any failure by these subsidiaries and business affiliates to effectively manage the challenges associated with the international operation of their businesses could materially adversely affect their, and hence our, financial condition.
Any failure by these subsidiaries and business I-33 Table of Contents affiliates to effectively manage the challenges associated with the international operation of their businesses could materially adversely affect their, and hence our, financial condition.
Any one of the inventory risk factors set forth above may adversely affect their operating results. ​ I-33 Table of Contents The seasonality of certain of our businesses places increased strain on their operations.
Any one of the inventory risk factors set forth above may adversely affect their operating results. ​ The seasonality of certain of our businesses places increased strain on their operations .
An increasing number of companies offering streaming services, including some with exclusive high-quality original video programming, as well as programming networks offering content directly to consumers over the internet, have increased the number of entertainment choices available to consumers, which has intensified audience fragmentation. The increase in entertainment choices adversely affects the viewership of our programming.
An increasing number of companies offering streaming services, including some with exclusive high-quality original video programming, as well as programming networks offering content directly to consumers over the internet, have increased the number of entertainment choices available to consumers, which has intensified audience fragmentation.
Risks Related to Economic Conditions ● Certain of our subsidiaries and business affiliates have operations outside of the U.S. that are subject to numerous operational and financial risks. ● Weak and uncertain economic conditions worldwide may reduce consumer demand for our businesses’ products and services. ● Increases in market interest rates could increase our operating costs and decrease consumer demand, which may adversely affect our businesses. ● Significant developments stemming from U.S. and international trade policy with China, including in response to forced labor and human rights abuses in China, may adversely impact our businesses and operating results. ​ Risks Related to Our Indebtedness and Common Stock ● QVC has significant indebtedness, which could limit its flexibility in responding to current market conditions, restrict its business activity and adversely affect our financial condition. ● QVC may need to refinance its indebtedness. ● Covenants in QVC’s debt agreements restrict its business in many ways. ● QVC may be adversely affected by the discontinuance of the London Inter-Bank Offered Rate and the transition to alternative reference rates. ● A substantial portion of our consolidated debt is held above the operating subsidiary level, and we could be unable in the future to obtain cash in amounts sufficient to service that debt and our other financial obligations. ● We have disposed of the reference shares underlying the exchangeable debentures of LI LLC, which exposes us to liquidity risk. ● Transactions in our common stock by our insiders could depress the market price of our common stock. ● It may be difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders. ​ Risks Related to Our Financial Condition and Business ​ Improvements in operating results from expected savings in operating costs from Project Athens and other cost saving and business improvement initiatives may not be realized in the anticipated amounts, may take longer to be realized, or could be realized only for a limited period.
(“ABH”), which may lead to conflicting interests. ​ Risks Related to Economic Conditions ​ ● Certain of our subsidiaries and business affiliates have operations outside of the U.S. that are subject to numerous operational and financial risks. ● Fluctuations in currency exchange rates may lead to lower revenues and earnings. ​ I-17 Table of Contents ● Weak and uncertain economic conditions worldwide may reduce consumer demand for our businesses’ products and services. ● Increases in market interest rates could increase our operating costs and decrease consumer demand, which may adversely affect our businesses. ● Significant developments stemming from U.S. and international trade policy with China, including in response to forced labor and human rights abuses in China, may adversely impact our businesses and operating results. ​ Risks Related to Our Indebtedness and Common Stock ● Our subsidiary QVC has significant indebtedness, which could limit its flexibility in responding to current market conditions, restrict its business activity and adversely affect our financial condition. ● QVC may need to refinance its indebtedness. ● Covenants in QVC’s debt agreements restrict its business in many ways. ● A substantial portion of our consolidated debt and other liabilities is held above the operating subsidiary level, and we could be unable in the future to obtain cash in amounts sufficient to service those liabilities and our other financial obligations. ● We have disposed of the reference shares underlying the exchangeable debentures of LI LLC, which exposes us to liquidity risk. ● Transactions in our common stock by our insiders could depress the market price of our common stock. ● It may be difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders. ​ Risks Related to Our Financial Condition and Business ​ Improvements in operating results from expected savings in operating costs from Project Athens and other cost saving and business improvement initiatives may not be realized in the anticipated amounts, may take longer to be realized, or could be realized only for a limited period.
In 2022, Qurate Retail announced Project Athens, a five-point turnaround plan designed to stabilize and differentiate its core HSN and QVC-U.S. brands and expand the Company’s leadership in video streaming commerce. During 2022 the first phase of Project Athens was commenced, and included actions to reduce inventory and a planned workforce reduction.
In 2022, Qurate Retail announced Project Athens, a five-point turnaround plan designed to stabilize and differentiate its QVC U.S. and HSN brands and expand the Company’s leadership in video streaming commerce. The first phase of Project Athens was commenced in 2022, which included actions to reduce inventory and a planned workforce reduction that was completed in February 2023.
As a result, they are subject to carrier disruptions and delays due to factors that are beyond their control, including employee strikes, labor shortages, inclement weather and regulation and enforcement actions by customs agencies.
As a result, they are subject to carrier disruptions and delays due to factors that are beyond their control, including employee strikes, labor shortages, inclement I-30 Table of Contents weather and regulation and enforcement actions by customs agencies.
Less favorable channel position for QVC’s programming, such as placement adjacent to programming that does not complement its programming, a position next to its televised home shopping competitors or isolation in a "shopping" tier could adversely affect QVC’s ability to attract television viewers to its programming.
Less favorable channel position for QVC’s programming, such as placement adjacent to programming that does not complement its programming, a position next to its televised home shopping competitors or isolation in a "shopping" tier or lack of high-definition formatted presentation could adversely affect QVC’s ability to attract television viewers to its programming.
The failure of our subsidiaries QVC U.S., QVC International, HSN and Zulily to effectively manage the Easy-Pay, Flexpay, Smart-Pay and revolving credit card programs as applicable, could negatively impact our results of operations. QVC offers an installment payment option in all of its markets other than Japan, which is available on certain merchandise it sells.
The failure of our subsidiaries QVC U.S., QVC International and HSN to effectively manage their installment sales plans and revolving credit card programs as applicable, could negatively impact our results of operations . QVC offers an installment payment option in all of its markets other than Japan, which is available on certain merchandise it sells.
In total, QVC is currently providing programming without affiliation agreements to distributors representing approximately 7% of its QVC U.S. distribution, and approximately 1% of its HSN distribution.
In total, QVC is currently providing programming without affiliation agreements to distributors representing approximately 6% of its QVC U.S. distribution, and approximately 1% of its HSN cable television distribution.
Our businesses also face similar risks associated with security breaches affecting third parties with which they are affiliated or otherwise conduct business.
Our businesses also face similar risks associated with security breaches and other cybersecurity incidents affecting third parties with which they are affiliated or otherwise conduct business.
On March 21, 2022, the SEC proposed new rules relating to the disclosure of a range of climate-related risks. We are currently assessing the proposed rule, but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the rule as proposed.
On March 21, 2022, the SEC proposed new rules relating to the disclosure of a range of climate-related risks, with final rules expected to be adopted in April 2024. We are currently assessing the proposed rule, but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the rule as proposed.
These price increases may result in us being unable to maintain competitive prices with other retailers. ​ In addition, many retailers, especially online retailers with whom our subsidiaries and business affiliates compete, are increasingly offering customers aggressive shipping terms, including free or discounted expedited shipping.
These price increases may result in us being unable to maintain competitive prices with other retailers. ​ In addition, many retailers, especially online retailers with whom our subsidiaries and business affiliates compete, are currently offering customers more competitive shipping and returns terms, including faster delivery and free or discounted shipping and returns.
As of December 31, 2022, QVC had total secured debt, other than its finance lease obligations, consisting of $3,912 million of secured indebtedness under its existing notes and $1,057 million secured indebtedness under the Credit Facility, in each case, secured by a first priority lien on all shares of its capital stock.
As of December 31, 2023, QVC had total secured debt, other than its finance lease obligations, of $4,364 million, consisting of $3,507 million of secured indebtedness under its existing notes and $857 million of secured indebtedness under the Credit Facility, in each case, secured by a first priority lien on all shares of its capital stock.
This installment payment option is called “Easy-Pay” at QVC U.S. and in the U.K., “Q-Pay” in Germany and Italy, and “Flex-Pay” at HSN.
This installment payment option is called “Easy-Pay” at QVC I-22 Table of Contents U.S. and in the U.K., “Q-Pay” in Germany and Italy, and “Flex-Pay” at HSN.
As of December 31, 2022, our wholly-owned subsidiary LI LLC had $1,906 million principal amount of publicly-traded debt outstanding. In addition, as of December 31, 2022, we had deferred tax liabilities of $970 million related to LI LLC’s exchangeable debentures. LI LLC is a holding company for certain of our subsidiaries and investments, including QVC.
As of December 31, 2023, our wholly-owned subsidiary LI LLC had $1,573 million principal amount of publicly-traded debt outstanding. In addition, as of December 31, 2023, we had deferred tax liabilities of $1,053 million related to LI LLC’s exchangeable debentures. LI LLC is a holding company for certain of our subsidiaries and I-37 Table of Contents investments, including QVC.
Competition is characterized by many factors, including assortment, advertising, price, quality, services, accessibility, the attractiveness and ease of use of digital platforms, cost and speed of options for delivery, reputation and credit availability, as well as the financial, technical and marketing expertise of competitors.
CBI also competes with other mail-order and catalog companies. Competition is characterized by many factors, including assortment, advertising, price, quality, services, accessibility, the attractiveness and ease of use of digital platforms, cost and speed of options for delivery, reputation and credit availability, as well as the financial, technical and marketing expertise of competitors.
The acquisition of certain types of inventory or components may require significant lead-time and prepayment and they may not be returnable. These businesses carry a broad selection and significant inventory levels of certain products, such as consumer electronics, and at times they may be unable to sell products in sufficient quantities or to meet demand during the relevant selling seasons.
These businesses carry a broad selection and significant inventory levels of certain products, such as consumer electronics, and at times they may be unable to sell products in sufficient quantities or to meet demand during the relevant selling seasons.
To the extent that revenue generated from advertising placed on smartphone computing devices becomes increasingly more important to their businesses and they fail to adequately evolve and address this market, their business and financial performance could be negatively impacted. ​ Our businesses are subject to cyber security risks, including security breaches and identity theft.
To the extent that revenue generated from advertising placed on smartphone computing devices becomes increasingly more important to their businesses and they fail to adequately evolve and address this market, their business and financial performance could be negatively impacted. ​ Our businesses and information systems are subject to cybersecurity risks, including cybersecurity threats and cybersecurity incidents .
In addition, QVC competes with other televised shopping retailers, such as ShopHQ in the U.S., Shop Channel in Japan, HSE 24 in Germany and Italy, and Ideal World in the U.K., infomercial retailers, Internet retailers, including livestream shopping retailers, and mail-order and catalog companies.
In addition, QVC competes with other televised shopping retailers, such as ShopHQ and Jewelry TV in the U.S., Shop Channel in Japan, HSE 24 in Germany and Austria, GM24 in Italy, and Ideal World in the U.K., infomercial retailers, Internet retailers, including livestream I-20 Table of Contents shopping retailers, and mail-order and catalog companies.
As a result of certain transactions that occurred between 2011 and 2014 that resulted in the separate corporate existence of our Company, LMC, TripAdvisor Holdings and Liberty Broadband as well as LMC’s proposed split-off of ABH, most of the executive officers of Qurate Retail also serve (or will serve, in the case of ABH) as executive officers of LMC, TripAdvisor Holdings, Liberty Broadband and ABH and there are overlapping directors.
As a result of certain transactions that occurred between 2011 and 2023 that resulted in the separate corporate existence of our Company, LMC, TripAdvisor Holdings, Liberty Broadband and ABH, most of the executive officers of Qurate Retail also serve as executive officers of LMC, TripAdvisor Holdings, Liberty Broadband and ABH and there are overlapping directors.
If the services or applications we develop in response to changes in consumer behavior are less effective or are not accepted by consumers, our online commerce businesses may experience difficulty attracting and retaining traffic and, in turn, advertisers, on these platforms.
If the services or applications we develop in response to changes in consumer behavior are defective, unstable or viewed as ineffective by consumers, our online commerce businesses may experience difficulty attracting and retaining traffic and, in turn, advertisers, on these platforms.
As these practices become more prevalent, our subsidiaries and business affiliates may experience further competitive pressures to attract customers and/or to change their shipping programs.
As a result of these practices, our subsidiaries and business affiliates may experience further competitive pressures to attract customers and/or to change their shipping programs.
QVC’s affiliation agreements with its distributors are scheduled to expire between 2023 and 2026. ​ As part of normal course renewal discussions, occasionally QVC has disagreements with its distributors over the terms of its carriage, such as channel placement or other contract terms.
The majority of QVC’s affiliation agreements with its distributors are scheduled to expire between 2024 and 2029 unless renewed prior to the applicable expiration. ​ As part of normal course renewal discussions, occasionally QVC has disagreements with its distributors over the terms of its carriage, such as channel placement or other contract terms.
COVID-19 also has had an adverse impact on QVC’s supply chain due to factory closures, shipping and trucking delays and labor shortages, resulting in shipping delays and other resource constraints related to the products it imports and those it produces domestically.
COVID-19 also had an adverse impact on QVC’s supply chain due to factory closures, shipping and trucking delays and labor shortages, resulting in delays and other resource constraints related to both imported and domestically produced products.
The failure to properly implement new systems, delays in implementing new systems or failing to integrate new systems with our legacy systems could impair the ability of our subsidiaries and business affiliates to provide services and content, fulfill orders and/or process transactions.
As a result, QVC maintains an ongoing process of implementing new technology systems and upgrading others. The failure to properly implement new systems, delays in implementing new systems or failing to integrate new systems with our legacy systems could impair the ability of our subsidiaries and business affiliates to provide services and content, fulfill orders and/or process transactions.
We evaluate, on a regular basis, whether events or circumstances have occurred that indicate all, or a portion, of the carrying amount of goodwill may no longer be recoverable, in which case an impairment charge to earnings would become necessary.
We evaluate, on a regular basis, whether events or circumstances have occurred that indicate all, or a portion, of the carrying amount of goodwill may no longer be recoverable, in which case an impairment charge to earnings would become necessary. ​ For the year ended December 31, 2023, the Company identified an impairment for the QxH reporting unit related to goodwill.
Recently, a number of jurisdictions in which we operate have indicated that these BNPL financing arrangements will be subject to increased regulation to ensure compliance with various consumer protection laws and regulations.
Recently, a number of jurisdictions in Europe and the U.S. have indicated that these BNPL financing arrangements could be subject to increased regulation to ensure compliance with various consumer protection laws and regulations.
The following is a summary of the material risk factors that could adversely affect our business, financial condition, and results of operations Risk Factor Summary Risks Related to Our Financial Condition and Business ● Improvements in operating results from expected savings in operating costs from Project Athens and other cost saving and business improvement initiatives may not be realized in the anticipated amounts, may take longer to be realized, or could be realized only for a limited period. ● Our subsidiary QVC depends on the television distributors that carry its programming, and no assurance can be given that QVC will be able to maintain and renew its affiliation agreements on favorable terms or at all. ● The COVID-19 pandemic negatively impacted, and future pandemics or epidemics may negatively impact, our business, key financial and operating metrics, and results of operations in numerous ways that remain unpredictable. ● New legislation or regulations related to climate change and increased focus by governmental and non-governmental organizations, stockholders and customers on sustainability issues may have a material adverse I-17 Table of Contents effect on our business and results of operations. ● Our businesses are subject to risks of adverse government regulation. ● Our subsidiaries and business affiliates conduct their businesses under highly competitive conditions. ● The sales and operating results of our businesses depend on their ability to attract new customers, retain existing customers and predict or respond to consumer preferences. ● We depend on the continued growth of e-commerce in general and Zulily depends on the flash sales model in particular. ● The failure of QVC to maintain suitable placement for its programming or to adapt to changes in consumer behavior driven by online video distribution platforms for viewing content could adversely affect its ability to attract and retain television viewers and could result in a decrease in revenue. ● Any continued or permanent inability of QVC to transmit its programming via satellite would result in lost revenue and could result in lost customers. ● Certain of our subsidiaries and business affiliates may fail to adequately protect their intellectual property rights or may be accused of infringing intellectual property rights of third parties. ● Our subsidiaries offer installment payment options on most of their respective merchandise.
Risk Factor Summary The following is a summary of the material risk factors that could adversely affect our business, financial condition, and results of operations Risks Related to Our Financial Condition and Business ● Improvements in operating results from expected savings in operating costs from Project Athens and other cost saving and business improvement initiatives may not be realized in the anticipated amounts, may take longer to be realized, or could be realized only for a limited period. ● Our subsidiary QVC depends on the television distributors that carry its programming, and no assurance can be given that QVC will be able to maintain and renew its affiliation agreements on favorable terms or at all. ● Our businesses are subject to risks of adverse government regulation , and we may be subject to claims for representations made in connection with the sale and promotion of merchandise or for harm experienced by customers who purchase merchandise from us. ● New legislation or regulations related to climate change and increased focus by governmental and non-governmental organizations, stockholders and customers on sustainability issues may have a material adverse effect on our business and results of operations. ● Our subsidiaries and business affiliates conduct their businesses under highly competitive conditions. ● The sales and operating results of our businesses depend on their ability to attract new customers, retain existing customers and predict or respond to consumer preferences. ● The failure of our subsidiary QVC to maintain suitable placement for its programming or to adapt to changes in consumer behavior driven by online video distribution platforms for viewing content could adversely affect its ability to attract and retain television viewers and could result in a decrease in revenue. ● Any continued or permanent inability of QVC to transmit its programming via satellite would result in lost revenue and could result in lost customers. ● Our subsidiaries offer installment payment options on most of their respective merchandise.
If our businesses are unable to maintain the security I-31 Table of Contents of their retail commerce websites and mobile commerce applications, they could suffer loss of sales, reductions in traffic, diversion of management attention, and deterioration of their competitive position and incur liability for any damage to customers whose personal information is accessed without authorization.
If our businesses are unable to maintain the security of their retail commerce websites and mobile commerce applications, they could suffer loss of sales, reductions in traffic, damage to our reputation, loss of consumer confidence, diversion of management attention, and deterioration of their competitive position and incur liability for any damage to customers whose personal information is accessed without authorization or claims, investigations, penalties and fines imposed by governmental regulators.
However, we cannot give any assurance as to whether Liberty Broadband will fulfill its indemnification obligations pursuant to the indemnification agreement. ​ As a result of LI LLC having disposed of these reference shares, any exercise of the exchange right by, or required distribution of cash, securities or other payments to, holders of such debentures will require that LI LLC fund the required payments from its own resources, which will depend on the availability of cash or other sources of liquidity to LI LLC at that time.
LI LLC has disposed of the reference shares underlying these exchangeable debentures. ​ As a result of LI LLC having disposed of these reference shares, any exercise of the exchange right by, or required distribution of cash, securities or other payments to, holders of such debentures will require that LI LLC fund the required payments from its own resources, which will depend on the availability of cash or other sources of liquidity to LI LLC at that time.

… 148 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

3 edited+2 added−4 removed2 unchanged
Biggest changeOur other subsidiaries and business affiliates own or lease the fixed assets necessary for the operation of their respective businesses, including office space, transponder space, headends, cable television and telecommunications distribution equipment and telecommunications switches. Item 3. Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable. ​ I-42 Table of Contents PART II
Biggest changeIt also leases other properties consisting of administrative offices, 30 retail stores and outlets in various locations throughout the U.S. Our other subsidiaries and business affiliates own or lease the fixed assets necessary for the operation of their respective businesses, including office space, transponder space, headends, cable television and telecommunications distribution equipment and telecommunications switches. Item 3. Legal Proceedings None.
QVC International owns contact centers in Bochum and Kassel, Germany; and Chiba-Shi, Japan. QVC International owns distribution centers in Chiba, Japan; and Hückelhoven, Germany. Additionally, QVC International owns multi-functional buildings in Knowsley, U.K.; Chiba, Japan; Brugherio, Italy; and Dusseldorf, Germany, and leases a multi-functional building in London, U.K.
QVC International owns a contact center in Kassel, Germany. QVC International owns a distribution center in Chiba, Japan and leases a distribution center in Hückelhoven, Germany. Additionally, QVC International owns multi-functional buildings in Chiba, Japan; Brugherio, Italy; and Dusseldorf, Germany, and leases multi-functional buildings in Knowsley, U.K. and London, U.K.
In November 2022, QVC entered into agreements to sell its Hückelhoven, Germany and Knowsley, United Kingdom properties. These properties are owned as of December 31, 2022, but considered held for sale and included in other assets, at cost, net of accumulated amortization in the accompanying consolidated balance sheet.
In December 2023, QVC entered into an agreement to sell its Kassel, Germany call center. This property is owned as of December 31, 2023, and is considered held for sale and included in other assets, at cost, net of accumulated amortization in the accompanying consolidated balance sheet.
Removed
Refer to note 7 in the accompanying notes to our consolidated financial statements for further details. On December 18, 2021, QxH experienced a fire at its Rocky Mount distribution center in North Carolina and as a result closed the facility. QVC leveraged its existing fulfillment centers and supplemented these facilities with short-term leased space as needed during 2022.
Added
Refer to note 7 in the accompanying notes to our consolidated financial statements for further details. CBI owns an office in Franconia, New Hampshire. CBI leases its fulfillment centers in Butler and Warren Counties in Ohio and as well as two facilities in Phoenix, Arizona.
Removed
QVC is currently evaluating long-term alternatives to alleviate the strain on its network caused by the loss of the Rocky Mount distribution center. Zulily leases its corporate headquarters in Seattle, Washington, and fulfillment centers in Lockbourne, Ohio and McCarran, Nevada. Zulily closed its fulfillment center in Bethlehem, Pennsylvania in 2022 and has sublet that property.
Added
Item 4. Mine Safety Disclosures Not applicable. ​ I-41 Table of Contents PART II
Removed
Previously, Zulily closed its corporate offices in Gahanna, Ohio and corporate employees in Ohio work remotely. The Gahanna office lease expires in 2024. Zulily also leases corporate office space in Shenzhen, China. I-41 Table of Contents CBI owns an office in Franconia, New Hampshire.
Removed
CBI leases its fulfillment centers in Butler and Warren Counties in Ohio and as well as two facilities in Phoenix, Arizona. It also leases other properties consisting of administrative offices, 22 retail stores and outlets in various locations throughout the U.S.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. ​ Mine Safety Disclosures ​ I-42 ​ ​ ​ ​ ​ ​ ​ ​ ​ Part II ​ ​ ​ Item 5. ​ Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ II-1 ​
Biggest changeItem 4. ​ Mine Safety Disclosures ​ I-41 ​ ​ ​ ​ ​ ​ ​ ​ ​ Part II ​ ​ ​ Item 5. ​ Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ II-1 ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−5 removed4 unchanged
Biggest changeAlthough our Series B common stock is traded on the Nasdaq Global Select Market, an established public trading market does not exist for the stock, as it is not actively traded. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Qurate Retail ​ ​ Series B (QRTEB) ​ ​ ​ High ​ Low 2021 ​ ​ ​ ​ ​ ​ First quarter ​ $ 15.77 ​ 10.40 Second quarter ​ $ 17.39 ​ 11.25 ​ Third quarter ​ $ 13.74 ​ 10.18 ​ Fourth quarter ​ $ 12.16 ​ 7.07 ​ 2022 ​ ​ ​ ​ ​ ​ First quarter ​ $ 8.08 ​ 4.75 ​ Second quarter ​ $ 5.80 ​ 3.61 ​ Third quarter ​ $ 21.93 ​ 3.04 ​ Fourth quarter ​ $ 13.56 ​ 4.20 ​ ​ Holders As of January 31, 2023, there were 2,185 and 57 record holders of our Series A and Series B Qurate Retail common stock, respectively.
Biggest changeAlthough our Series B common stock is traded on the Nasdaq Global Select Market, an established public trading market does not exist for the stock, as it is not actively traded. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Qurate Retail ​ ​ Series B (QRTEB) ​ ​ ​ High ​ Low 2022 ​ ​ ​ ​ ​ ​ First quarter ​ $ 8.08 ​ 4.75 Second quarter ​ $ 5.80 ​ 3.61 ​ Third quarter ​ $ 21.93 ​ 3.04 ​ Fourth quarter ​ $ 13.56 ​ 4.20 ​ 2023 ​ ​ ​ ​ ​ ​ First quarter ​ $ 7.44 ​ 4.28 ​ Second quarter ​ $ 9.50 ​ 3.69 ​ Third quarter ​ $ 8.74 ​ 5.12 ​ Fourth quarter ​ $ 9.15 ​ 5.42 ​ ​ Holders As of January 31, 2024, there were 2,148 and 58 record holders of our Series A and Series B common stock, respectively.
“Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources.” Securities Authorized for Issuance Under Equity Compensation Plans Information required by this item is incorporated by reference to our definitive proxy statement for our 2023 Annual Meeting of Stockholders.
“Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources.” Securities Authorized for Issuance Under Equity Compensation Plans Information required by this item is incorporated by reference to our definitive proxy statement for our 2024 Annual Meeting of Stockholders .
On November 4, 2021, Qurate Retail announced that its Board of Directors declared a special cash dividend in the amount of $1.25 per common share for an aggregate cash dividend of approximately $488 million based on shares outstanding as of October 31, 2021.
Dividends On November 4, 2021, Qurate Retail announced that its board of directors (the “Board of Directors”) declared a special cash dividend in the amount of $1.25 per common share for an aggregate cash dividend of approximately $488 million based on shares outstanding as of October 31, 2021.
The following table sets forth the range of high and low sales prices of shares of our Series B common stock for the years ended December 31, 2022 and 2021.
The following table sets forth the range of high and low sales prices of shares of our Series B common stock for the years ended December 31, 2023 and 2022.
No shares of Series A Qurate Retail common stock and 18 shares of Preferred Stock were surrendered by certain of our officers and employees to pay withholding taxes and other deductions in connection with the vesting of their restricted stock during the three months ended December 31, 2022. Item 6. [Reserved] ​
No shares of Series A common stock and 30 shares of Preferred Stock were surrendered by certain of our officers and employees to pay withholding taxes and other deductions in connection with the vesting of their restricted stock during the three months ended December 31, 2023. Item 6. [Reserved] ​
The dividend was payable on November 22, 2021 to stockholders of record of Qurate Retail’s Series A and Series B common stock as of the close of business on November 15, 2021. Aside from the above mentioned dividends, we have not paid any cash dividends on our common stock.
The dividend was payable on November 22, 2021 to stockholders of record of Qurate Retail’s Series A and Series B common stock as of the close of business on November 15, 2021. Aside from the above mentioned dividends, we have not paid any cash dividends on our common stock during the years ended December 31, 2023, 2022, and 2021.
Purchases of Equity Securities by the Issuer Share Repurchase Programs In May 2019, the board authorized the repurchase of $500 million of Series A or Series B Qurate Retail common stock . In August 2021, the board authorized the repurchase of $500 million of Series A or Series B Qurate Retail common stock.
II-1 Table of Contents Purchases of Equity Securities by the Issuer Share Repurchase Programs In May 2019, the board authorized the repurchase of $500 million of Series A or Series B common stock . In August 2021, the board authorized the repurchase of $500 million of Series A or Series B common stock.
There were no repurchases of Series A Qurate Retail common stock, Series B Qurate Retail common stock or Preferred Stock during the three months ended December 31, 2022.
There were no repurchases of Series A common stock, Series B common stock or the Company’s 8.0% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Preferred Stock”) during the three months ended December 31, 2023.
Removed
Dividends On August 21, 2020, Qurate Retail announced that an authorized committee of the Company’s board of directors (the “Board of Directors”) had declared a special dividend (the “Special Dividend”) on each outstanding share of its Series A and Series B common stock consisting of (i) cash in the amount of $1.50 per common share, for an aggregate cash dividend of approximately $626 million, and (ii) 0.03 shares of newly issued 8.0% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Preferred Stock”), having an initial liquidation price of $100 per share of Preferred Stock, with cash paid in lieu of fractional shares.
Removed
The distribution ratio for the Preferred Stock portion of the Special Dividend was equivalent to $3.00 in initial liquidation preference per common share, for an aggregate issuance of approximately $1.3 billion aggregate liquidation preference. The dividend was distributed on September 14, 2020 to holders of record of Qurate Retail’s Series A and Series B common stock.
Removed
Holders of the Preferred Stock are entitled to receive quarterly cash dividends at a fixed rate of 8.0% per year on a cumulative basis, beginning December 15, 2020 and thereafter on each of March 15, June 15, September 15 and December 15 during the term.
Removed
The Preferred Stock is non-voting, except in limited circumstances as required by law, and subject to a mandatory redemption on March 15, 2031.
Removed
On November 20, 2020, Qurate Retail announced that an authorized committee of its Board of Directors declared a special cash dividend in the amount of $1.50 per common share, for an aggregate dividend of approximately $625 million, II-1 Table of Contents payable in cash on December 7, 2020 to stockholders of record of the Company’s Series A and Series B common stock at the close of business on November 30, 2020.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

107 edited+21 added−55 removed52 unchanged
Biggest changeIn 2021 the effective tax rate was higher than the U.S. federal tax rate of 21% primarily due to foreign tax expense, state income tax expense, the impairment of goodwill that is not deductible for tax purposes, and non-deductible interest II-10 Table of Contents expense related to preferred stock, partially offset by benefits from tax credits generated by our alternative energy investments.
Biggest changeEarnings (losses) before income taxes and income tax (expense) benefit are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2023 2022 Earnings (loss) from continuing operations before income taxes ​ $ 66 ​ (2,308) Income tax (expense) benefit ​ ​ (160) ​ (224) Effective income tax rate ​ ​ 242% ​ 10% ​ For the year ended December 31, 2023 income tax expense was greater than the U.S. statutory rate of 21% due to state income tax expense, foreign income tax expense, the impairment of goodwill that is not deductible for tax purposes, non-deductible interest expense related to Preferred Stock and stock compensation, partially offset by tax benefits from a decrease in effective tax rate used to measure deferred taxes. ​ For 2022, the most significant portion of the losses before income taxes relates to a goodwill impairment that is not deductible for tax purposes. ​ Net earnings (loss).
Concurrent with the sale, QVC entered into agreements to lease each of the properties back from the purchaser over an initial term of 20 years with the option to extend the terms of the property leases for up to four consecutive terms of five years.
Concurrent with the sale, QVC entered into agreements to lease each of the properties back from the purchaser over an initial term of 20 years with the option to extend the terms of the property leases for up to four consecutive terms of five years.
Our largest businesses and reportable segments are QxH (QVC U.S. and HSN) and QVC International. QVC, Inc. (“QVC”), which includes QxH and QVC International, markets and sells a wide variety of consumer products in the United States (“U.S.”) and several foreign countries via highly engaging video-rich, interactive shopping experiences. Cornerstone Brands, Inc.
Our largest businesses and reportable segments are QxH (QVC U.S. and HSN, Inc. (“HSN”)) and QVC International. QVC, Inc. (“QVC”), which includes QxH and QVC International, markets and sells a wide variety of consumer products in the United States (“U.S.”) and several foreign countries via highly engaging video-rich, interactive shopping experiences. Cornerstone Brands, Inc.
In the event the U.S. Dollar strengthens against these foreign currencies in the future, QVC's revenue and operating cash flow will be negatively affected. In discussing QVC’s operating results, the term “currency exchange rates” refers to the currency exchange rates QVC uses to convert the operating results for all countries where the functional currency is not the U.S. Dollar.
Dollar strengthens against these foreign currencies in the future, QVC's revenue and operating cash flow will be negatively affected. In discussing QVC’s operating results, the term “currency exchange rates” refers to the currency exchange rates QVC uses to convert the operating results for all countries where the functional currency is not the U.S. Dollar.
Although QVC will not be able to make unlimited dividends or other restricted payments under the senior secured notes leverage basket, QVC will continue to be permitted to make unlimited dividends to parent entities of QVC to service the principal and interest when due in respect of indebtedness of such parent entities (so long as there is no default under the indentures governing QVC’s senior secured notes) and permitted to make certain restricted payments to Qurate Retail under an intercompany tax sharing agreement in respect of certain tax obligations of QVC and its subsidiaries.
Although QVC will not be able to make unlimited dividends or other restricted payments under the senior secured notes leverage basket, QVC will continue to be permitted to make unlimited dividends to parent entities of QVC to service the principal and interest when due in respect of indebtedness of such parent entities (so long as there is no default under the indentures governing QVC’s senior secured notes or the Credit Facility) and permitted to make certain restricted payments to Qurate Retail under an intercompany tax sharing agreement in respect of certain tax obligations of QVC and its subsidiaries.
In order to improve customer experience and grow relationships, Qurate Retail is working to optimize programming using advanced analytics to align product offerings, promotions and airtime with customer preferences. In addition, we expect to invest in infrastructure which will endeavor to improve the customer's order to delivery experience by increasing personalization, reducing shipping time and improving shipment tracking visibility.
In order to improve customer experience and grow relationships, Qurate Retail is working to optimize programming using advanced analytics to align product offerings, promotions and airtime with customer preferences. In addition, we expect to invest in infrastructure which will endeavor to improve the customer's order to delivery experience by reducing shipping time and improving shipment tracking visibility.
When we refer to “constant currency operating results”, this means operating results without the impact of the currency exchange rate fluctuations. The disclosure of constant currency amounts or results permits investors to understand better QVC’s underlying performance without the effects of currency exchange rate fluctuations. II-16 Table of Contents The percentage change in net revenue for QVC in U.S.
When we refer to “constant currency operating results”, this means operating results without the impact of the currency exchange rate fluctuations. The disclosure of constant currency amounts or results permits investors to understand better QVC’s underlying performance without the effects of currency exchange rate fluctuations. II-15 Table of Contents The percentage change in net revenue for QVC in U.S.
As part of the analysis the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current and prior years for other purposes. In 2022, an impairment of $2,535 million was recorded to QxH’s goodwill.
As part of the analysis the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current and prior years for other purposes. In 2023 an impairment of $326 million was recorded to QxH’s goodwill. In 2022, an impairment of $2,535 million was recorded to QxH’s goodwill.
Rocky Mount was QVC’s second-largest fulfillment center, processing approximately 25% to 30% of volume for QVC U.S., and also served as QVC U.S.’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.
Rocky Mount was QVC’s second-largest fulfillment center, processing approximately 25% to 30% of volume for QVC U.S., and also served as QVC U.S.’s primary returns center for hard goods. The building was significantly damaged as a result of the fire and related smoke and would not reopen.
Since the lease was modified and removed QVC’s ability to take ownership at the end of the lease term, the Company accounted for the modification similar to a sale and leaseback transaction, and as a result, QVC received net cash proceeds of $250 million and recognized a $240 million gain on the sale of the distribution center during the second quarter of 2022 calculated as the difference between the aggregate consideration received (including cash and forgiveness of the remaining financing obligation of $84 million) and the carrying value of the distribution center.
Since the lease was modified and removed QVC’s ability to take ownership at the end of the lease term, the Company accounted for the modification similar to a sale and leaseback transaction, and as a result, recognized a $240 million gain on the sale of the distribution center during the second quarter of 2022 calculated as the difference between the aggregate consideration received (including cash of $250 million and forgiveness of the remaining financing obligation of $84 million) and the carrying value of the distribution center.
As of December 31, 2022, QVC’s consolidated leverage ratio (as calculated under QVC’s senior secured notes) was greater than 3.5 to 1.0 and as a result QVC is restricted in its ability to make dividends or other restricted payments under the senior secured notes.
As of December 31, 2023, QVC’s consolidated leverage ratio (as calculated under QVC’s senior secured notes) was greater than 3.5 to 1.0 and as a result QVC is restricted in its ability to make dividends or other restricted payments under the senior secured notes.
Amounts do not assume additional borrowings or refinancings of existing debt. (2) Amounts (i) are based on our outstanding debt at December 31, 2022, (ii) assume the interest rates on our variable rate debt remain constant at the December 31, 2022 rates and (iii) assume that our existing debt is repaid at maturity.
Amounts do not assume additional borrowings or refinancings of existing debt. (2) Amounts (i) are based on our outstanding debt at December 31, 2023, (ii) assume the interest rates on our variable rate debt remain constant at the December 31, 2023 rates and (iii) assume that our existing debt is repaid at maturity.
QVC accrues taxes on the unremitted earnings of its international subsidiaries. Approximately 67% of this foreign cash balance was that of QVC Japan. QVC owns 60% of QVC Japan and shares all profits and losses with the 40% minority interest holder, Mitsui & Co, LTD.
QVC accrues taxes on the unremitted earnings of its international subsidiaries. Approximately 76% of this foreign cash balance was that of QVC Japan. QVC owns 60% of QVC Japan and shares all profits and losses with the 40% minority interest holder, Mitsui & Co, LTD.
The projected uses of Qurate Retail’s cash in the next year, outside of normal operating expenses (inclusive of tax payments), are the costs to service outstanding debt, approximately $365 million for estimated interest payments on outstanding debt, including corporate level and other subsidiary debt, anticipated capital improvement spending between $250 million and $300 million, the repayment of certain debt obligations, payments related to television distribution rights, payment of dividends to the holders of the Preferred Stock, and additional investments in existing or new businesses.
The projected uses of Qurate Retail’s cash in the next year, outside of normal operating expenses (inclusive of tax payments), are the costs to service outstanding debt including approximately $330 million for estimated interest payments on corporate level and other subsidiary debt, anticipated capital improvement spending between $235 million and $250 million, the repayment of certain debt obligations, payments related to television distribution rights, payment of dividends to the holders of the Preferred Stock, and additional investments in existing or new businesses.
In the U.S., QVC's televised shopping programs, including live and recorded content, are broadcast across multiple channels nationally on a full-time basis, including QVC, QVC2, QVC3, HSN, and HSN2.
In the U.S., QVC's televised shopping programs, including live and recorded content, are distributed across multiple channels nationally on a full-time basis, including QVC, QVC2, QVC3, HSN, and HSN2.
In 2022 and 2021, impairments of $140 million and $130 million were recorded to Zulily’s tradename, respectively. There were no tradename impairments in 2020. ​ Retail Related Adjustments and Allowances. QVC records adjustments and allowances for sales returns, inventory obsolescence and uncollectible receivables. Each of these adjustments is estimated based on historical experience.
In 2022 and 2021, impairments of $140 million and $130 million were recorded to Zulily’s tradename, respectively. ​ Retail Related Adjustments and Allowances. QVC records adjustments and allowances for sales returns, inventory obsolescence and uncollectible receivables. Each of these adjustments is estimated based on historical experience.
Project Athens main initiatives include: (i) improve customer experience and grow relationships; (ii) rigorously execute core processes; (iii) lower cost to serve; (iv) optimize the brand portfolio; and (v) build new high growth businesses anchored in strength. ​ II-4 Table of Contents Improve Customer Experience and Grow Relationships. Qurate Retail is focused on rebuilding stronger connections with their customers.
Project Athens main initiatives include: (i) improve customer experience and grow relationships; (ii) rigorously execute core processes; (iii) lower cost to serve; (iv) optimize the brand portfolio; and (v) build new high growth businesses anchored in strength. ​ Improve Customer Experience and Grow Relationships. Qurate Retail is focused on rebuilding stronger connections with their customers.
(3) This amount reflects the annual 8.0% dividend on shares of Preferred Stock outstanding as of December 31, 2022 and redemption of the Preferred Stock on March 15, 2031.
(3) This amount reflects the annual 8.0% dividend on shares of Preferred Stock outstanding as of December 31, 2023 and redemption of the Preferred Stock on March 15, 2031.
In order to rigorously execute core processes, Qurate Retail will optimize pricing and assortment by investing in Information Technology systems that will support real-time pricing and promotion adjustments at an item level. We will also focus on growing our private label brands to drive revenue and margin at productive scale. ​ Lower cost to serve.
In order to rigorously execute core processes, Qurate Retail will optimize pricing and assortment by investing in enhanced IT systems that will support real-time pricing and promotion adjustments at an item level. We will also focus on growing our private label brands to drive revenue and margin at productive scale. ​ Lower cost to serve.
This process requires our management to make judgments regarding the timing and probability of the ultimate tax impact of the various agreements and transactions that we enter into. Based on these judgments we may record tax reserves or adjustments to valuation allowances on deferred tax assets to reflect the expected realizability of future tax benefits.
This process requires our management to make judgments regarding the timing and probability of the ultimate tax impact of the various agreements and II-13 Table of Contents transactions that we enter into. Based on these judgments we may record tax reserves or adjustments to valuation allowances on deferred tax assets to reflect the expected realizability of future tax benefits.
We are unable to estimate the maximum potential liability for these types of indemnification obligations as the sale agreements may not specify a maximum amount and the II-12 Table of Contents amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time.
We are unable to estimate the maximum potential liability for these types of indemnification obligations as the sale agreements may not specify a maximum amount and the amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time.
Due to the high degree of judgment involved in our estimation techniques, any value ultimately derived from our long-lived assets may differ from our estimate of fair value. As each of our operating segments has long-lived assets, this critical accounting policy affects the financial position and results of operations of each segment.
Due to the high degree of judgment involved in our estimation techniques, any value ultimately derived from our long-lived assets may differ from our estimate of fair II-12 Table of Contents value. As each of our operating segments has long-lived assets, this critical accounting policy affects the financial position and results of operations of each segment.
We define Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring, acquisition-related costs, fire related costs, net (including Rocky Mount inventory losses), and gains on sale leaseback transactions .
We define Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring, penalties and fire related costs, net (including Rocky Mount inventory losses), and gains on sale of assets and leaseback transactions .
The Company's U.S. programming is also available on QVC.com and HSN.com, QVC's "U.S. websites"; virtual multichannel video programming distributors (including Hulu + Live TV, DirectTV Stream and YouTube TV); applications via streaming video; Facebook Live, Roku, Apple TV, Amazon Fire, Xfinity Flex and Samsung TV Plus; mobile applications; social media pages and over-the-air broadcasters.
The Company's U.S. programming is also available on QVC.com and HSN.com, which we refer to as QVC's "U.S. websites"; virtual multichannel video programming distributors (including Hulu + Live TV, DirectTV Stream and YouTube TV); applications via streaming video; Facebook Live, Roku, Apple TV, Amazon Fire, Xfinity Flex and Samsung TV Plus; mobile applications; social media pages and over-the-air broadcasters.
QVC's allowance for credit losses is calculated as a percent of accounts receivable at the end of a reporting period, and is based on historical experience, with the change in such allowance recorded as a provision for credit losses in SG&A expenses in the consolidated statements of operations.
QVC's allowance for credit losses is calculated as a percent of accounts receivable at the end of a reporting period, and is based on historical experience, with the change in such allowance recorded as a provision for credit losses in selling, general and administrative expenses in the consolidated statements of operations.
All of these accounting estimates and assumptions, as well as the resulting impact to our financial statements, have been discussed with the audit committee of our board of directors. II-13 Table of Contents Fair Value Measurements of Non-Financial Instruments .
All of these accounting estimates and assumptions, as well as the resulting impact to our financial statements, have been discussed with the audit committee of the Board of Directors. Fair Value Measurements of Non-Financial Instruments .
The gain is included in gains on sale leaseback transactions in the consolidated statement of operations.
The gain is included in gains on sale of asset and sale leaseback transactions in the consolidated statement of operations.
Additionally, we have $2.15 billion available for borrowing under the Credit Facility at December 31, 2022. As of December 31, 2022, QVC had approximately $238 million of cash and cash equivalents held in foreign subsidiaries that is available for domestic purposes with no significant tax consequences upon repatriation to the U.S.
Additionally, we have $2.28 billion available for borrowing under the Credit Facility at December 31, 2023. As of December 31, 2023, QVC had approximately $204 million of cash and cash equivalents and restricted cash held in foreign subsidiaries that is available for domestic purposes with no significant tax consequences upon repatriation to the U.S.
We are also building a next generation shopping app featuring vendors with self-made content. ​ QVC’s future net revenue will depend on its ability to grow through digital platforms, attract new customers and retain existing customers.
We are also building a next generation shopping app featuring vendors with self-made content. ​ II-4 Table of Contents QVC’s future net revenue will depend on its ability to grow through digital platforms, retain and grow revenue from existing customers and attract new customers.
In order to build new high growth businesses anchored in strength, Qurate Retail expects to expand streaming viewership by improving the current streaming experience with enhanced video and navigation and seamless transactions. Additionally, we are shaping the future streaming experience with exclusive content, program and deal concepts.
Finally, Qurate Retail is focused on expanding in the video streaming shopping market. In order to build new high growth businesses anchored in strength, Qurate Retail expects to expand streaming viewership by improving the current streaming experience with enhanced video and navigation and seamless transactions. Additionally, we are shaping the future streaming experience with exclusive content, program and deal concepts.
QVC recognized a $277 million gain related to the successful sale leaseback for the year ended December 31, 2022, calculated as the difference between the aggregate consideration received and the carrying value of the properties.
QVC recognized a $277 million gain related to the successful sale II-3 Table of Contents leaseback during the year ended December 31, 2022, calculated as the difference between the aggregate consideration received and the carrying value of the properties.
Trade accounts receivable (including installment payment, credit card and customer receivables) were $1,319 million and $1,521 million, as of December 31, 2022 and 2021, respectively. Allowance for credit losses related to uncollectible trade accounts receivable was $87 million and $86 million as of December 31, 2022 and 2021, respectively.
Trade accounts receivable (including installment payment, credit card and customer receivables) were $1,294 million and $1,319 million, as of December 31, 2023 and 2022, respectively. Allowance for credit losses related to uncollectible trade accounts receivable was $82 million and $87 million as of December 31, 2023 and 2022, respectively.
If these pressures persist, inflated costs may result in certain increased costs continuing to outpace QVC’s pricing power in the near term. ​ On December 18, 2021, QVC experienced a fire at its Rocky Mount, Inc. distribution center in North Carolina.
If these pressures persist, inflated costs may result in certain increased costs outpacing QVC’s pricing power in the near term. ​ On December 18, 2021, QVC experienced a fire at its Rocky Mount fulfillment center in North Carolina.
The change in the reserve is included in cost of goods sold in the consolidated statements of operations. As of December 31, 2022, QVC's inventory was $1,035 million, which was net of II-14 Table of Contents the obsolescence reserve of $143 million.
The change in the reserve is included in cost of goods sold in the consolidated statements of operations. As of December 31, 2023, QVC's inventory was $860 million, which was net of the obsolescence reserve of $115 million. As of December 31, 2022, QVC’s inventory was $1,035 million, which was net of the obsolescence reserve of $143 million.
As of December 31, 2022, Qurate Retail's liquidity position consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash ​ ​ ​ equivalents ​ ​ ​ amounts in millions QVC $ 357 CBI ​ ​ 12 ​ Corporate and other (1) ​ 906 Total Qurate Retail $ 1,275 ​ ​ ​ ​ ​ (1) Corporate cash as of December 31, 2022 was $875 million. ​ To the extent that the Company recognizes any taxable gains from the sale of assets, we may incur tax expense and be required to make tax payments, thereby reducing any cash proceeds.
As of December 31, 2023, Qurate Retail's liquidity position consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash ​ ​ ​ equivalents ​ ​ ​ amounts in millions QVC $ 307 CBI ​ ​ 86 ​ Corporate and other ​ 728 Total Qurate Retail $ 1,121 ​ ​ ​ ​ ​ ​ To the extent that the Company recognizes any taxable gains from the sale of assets, we may incur tax expense and be required to make tax payments, thereby reducing any cash proceeds.
We expect to develop a customer loyalty program which will provide customers with a more personalized experience. Rigorously execute core processes. Qurate Retail is enhancing its core processes to deliver the human story telling experience behind a product while also sharing a clear and compelling value proposition.
We will continue to focus on customer loyalty through providing customers with a more personalized experience. Rigorously execute core processes. Qurate Retail is enhancing its core processes to deliver the human story telling experience behind a product while also sharing a clear and compelling value proposition.
Depreciation and amortization included $62 million, $62 million and $66 million of acquisition related amortization during the years ended December 31, 2022, 2021, and 2020, respectively.
Depreciation and amortization included $62 million of acquisition related amortization during each of the years ended December 31, 2023 and 2022, respectively.
In 2022 and 2021, impairments of $226 million and $233 million were recorded to Zulily’s goodwill, respectively. There were no goodwill impairments in 2020. In 2022, an impairment of $180 million was recorded to the QxH tradename (related to the tradename associated with HSN).
In 2022 and 2021, impairments of $226 million and $233 million were recorded to Zulily’s goodwill, respectively. No tradename impairments were recorded during the year ended December 31, 2023. In 2022, an impairment of $180 million was recorded to the QxH tradename (related to the tradename associated with HSN).
As of December 31, 2022, the intangible assets not subject to amortization for each of our significant reportable segments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ Tradenames ​ Total ​ ​ amounts in millions QxH $ 2,693 2,698 5,391 ​ QVC International ​ ​ 778 ​ — ​ 778 ​ CBI ​ ​ 12 ​ — ​ 12 ​ Corporate and other ​ 18 20 38 ​ ​ ​ $ 3,501 2,718 6,219 ​ ​ We perform our annual assessment of the recoverability of our goodwill and other non-amortizable intangible assets during the fourth quarter of each year, or more frequently, if events or circumstances indicate impairment may have occurred.
As of December 31, 2023, the intangible assets not subject to amortization for each of our significant reportable segments were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ Tradenames ​ Total ​ ​ amounts in millions QxH $ 2,367 2,698 5,065 ​ QVC International ​ ​ 785 ​ — ​ 785 ​ CBI ​ ​ 12 ​ — ​ 12 ​ ​ ​ $ 3,164 2,698 5,862 ​ ​ We perform our annual assessment of the recoverability of our goodwill and other non-amortizable intangible assets during the fourth quarter of each year, or more frequently, if events or circumstances indicate impairment may have occurred.
Sales returns are calculated as a percent of sales and are netted against revenue in its consolidated statements of operations. For both of the years ended December 31, 2022 and 2021 sales returns represented 15.3%, and for the year ended December 31, 2020 sales returns represented 15.6% of QVC's gross product revenue.
Sales returns are calculated as a percent of sales and are netted against revenue in its consolidated statements of operations. Sales returns represented 16.3% and 15.3% of gross product revenue for the years ended December 31, 2023 and 2022, respectively.
We provide in the tables below information regarding our Consolidated Operating Results and Other Income and Expense, as well as information regarding the contribution to those items from our principal reportable segments. The "Corporate and other" category consists of our consolidated subsidiary Zulily, along with various cost and equity method investments.
II-5 Table of Contents Results of Operations—Consolidated General. We provide in the tables below information regarding our Consolidated Operating Results and Other Income and Expense, as well as information regarding the contribution to those items from our principal reportable segments. The "Corporate and other" category consists of various cost method investments.
Operating expenses slightly increased for the year ended December 31, 2022, compared to the prior year, driven by increased credit card fees due to increased revenue. Operating expenses increased for the year ended December 31, 2021, compared to the prior year, driven by increased credit card fees due to increased revenue. CBI’s SG&A expenses include print, digital and retail marketing.
Operating expenses decreased $3 million for the year ended December 31, 2023, compared to the prior year, driven by decreased credit card fees and customer service charges due to decreased revenue. CBI’s SG&A expenses include print, digital and retail marketing.
Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2022 2021 2020 ​ ​ amounts in millions Equity securities ​ $ 13 77 (1) ​ Exchangeable senior debentures ​ 310 (130) (277) ​ Indemnification asset ​ ​ (273) ​ (21) ​ 143 ​ Other financial instruments ​ (9) 173 25 ​ ​ ​ $ 41 99 (110) ​ ​ The changes in these accounts are due primarily to market factors and changes in the fair value of the underlying stocks or financial instruments to which these relate.
Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2023 2022 ​ ​ amounts in millions Equity securities ​ $ (22) 13 Exchangeable senior debentures ​ (33) 324 Indemnification asset ​ ​ (5) ​ (273) ​ Other financial instruments ​ (1) (9) ​ ​ $ (61) 55 ​ The changes in these accounts are due primarily to market factors and changes in the fair value of the underlying stocks or financial instruments to which these relate.
QxH, QVC International and CBI operating income decreased $2,838 million, $183 million, and $60 million, respectively, for the year ended December 31, 2022, compared to the same period in the prior year. See " Results of Operations - Businesses " below for a more complete discussion of the results of operations of QVC and CBI.
II-6 Table of Contents QxH and QVC International operating income increased $2,095 million and $64 million, respectively, and CBI decreased by $13 million, for the year ended December 31, 2023, compared to the same period in the prior year. See "Results of Operations – Businesses" below for a more complete discussion of the results of operations of QVC and CBI.
The Company is currently unable to predict the extent of any of these potential adverse effects. ​ In executing against Project Athens during 2022, QVC took actions to reduce inventory and planned a workforce reduction.
The Company is currently unable to predict the extent of any of these potential adverse effects. ​ During 2022, QVC commenced the first phase of Project Athens, including actions to reduce inventory and planned a workforce reduction that was completed in February 2023.
While cash generated by operating activities was significantly lower in 2022, we believe our businesses will continue to generate positive cash from operating activities in future periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2022 2021 2020 Cash Flow Information ​ amounts in millions Net cash provided (used) by operating activities ​ $ 194 1,225 2,455 ​ Net cash provided (used) by investing activities ​ $ 601 (501) (161) ​ Net cash provided (used) by financing activities ​ $ (72) (914) (2,181) ​ ​ During the year ended December 31, 2022, Qurate Retail's primary sources of cash were proceeds from the sales of fixed assets of $704 million, insurance proceeds of $280 million, partially offset by capital expenditures of $268 million, dividends paid to noncontrolling interest of $68 million, and expenditure for television distribution rights of $45 million.
We believe our businesses will continue to generate positive cash from operating activities in future periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2023 2022 Cash Flow Information ​ amounts in millions Net cash provided (used) by operating activities ​ $ 919 194 ​ Net cash provided (used) by investing activities ​ $ (54) 601 ​ Net cash provided (used) by financing activities ​ $ (1,010) (72) ​ ​ During the year ended December 31, 2023, Qurate Retail's primary sources of cash were insurance proceeds of $280 million, proceeds from the sales of fixed assets of $208 million, and proceeds of $71 million from disposition of investments, partially offset by capital expenditures of $230 million, expenditure for television distribution rights of $113 million, and dividends paid to noncontrolling interest of $53 million.
For the year ended December 31, 2022, the gain primarily related to insurance proceeds received for inventory and fixed asset losses partially offset by write-downs on Rocky Mount inventory and restructuring costs primarily related to the workforce reduction.
For the year ended December 31, 2022, the gain primarily related to insurance proceeds received for inventory and fixed asset losses partially offset by write-downs on Rocky Mount inventory and restructuring costs primarily related to workforce reduction. Expenses indirectly related to the Rocky Mount fulfillment center fire, including operational inefficiencies, are primarily included in Cost of goods sold.
QVC recorded an impairment loss of $2,715 million for the year ended December 31, 2022 related to the decrease in the fair value of the HSN indefinite-lived tradename and the QxH reporting unit (see note 5 to the accompanying consolidated financial statements). There were no impairment losses recorded by QVC for the years ended December 31, 2021 and 2020.
QVC recorded an impairment loss of $2,715 million for the year ended December 31, 2022 related to the decrease in the fair value of the HSN indefinite-lived tradename and the QxH reporting unit (see note 5 to the accompanying consolidated financial statements). Stock-based compensation includes compensation related to options and restricted stock granted to certain officers and employees.
Dollars and in constant currency was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2022 ​ Year ended December 31, 2021 ​ ​ U.S. dollars ​ Foreign Currency Exchange Impact ​ Constant currency ​ U.S. dollars ​ Foreign Currency Exchange Impact ​ Constant currency ​ QxH (11.1) % ​ — % ​ (11.1) % ​ (2.7) % ​ — % ​ (2.7) % ​ QVC International (17.8) % ​ (12.1) % ​ (5.7) % ​ 3.7 % ​ 1.9 % ​ 1.8 % ​ In 2022, the QxH net revenue decrease was primarily due to a 9.3% decrease in units shipped, a 1.8% decline in ASP and a $104 million decrease in shipping and handling revenue, partially offset by a $149 million decrease in estimated product returns.
Dollars and in constant currency was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2023 ​ U.S. dollars ​ Foreign Currency Exchange Impact ​ Constant currency QxH (5.0) % ​ — % ​ (5.0) % QVC International (2.9) % ​ (1.6) % ​ (1.3) % In 2023, the QxH net revenue decrease was primarily due to a 6.3% decrease in units shipped, a $55 million increase in estimated product returns, and a $34 million decrease in shipping and handling revenue.
II-15 Table of Contents QVC's operating results were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ amounts in millions Net revenue ​ $ 9,887 11,354 11,472 ​ Cost of goods sold (excluding depreciation, amortization and Rocky Mount inventory losses shown below) ​ (6,751) (7,368) (7,418) ​ Operating expenses ​ (760) (791) (786) ​ SG&A expenses (excluding stock-based compensation) ​ (1,268) (1,194) (1,211) ​ Adjusted OIBDA ​ 1,108 2,001 2,057 ​ Restructuring and fire related (costs), net of recoveries (including Rocky Mount inventory losses) ​ ​ 10 ​ (21) ​ — ​ Gains on sale leaseback transactions ​ ​ 520 ​ — ​ — ​ Impairment of intangible assets ​ (2,715) — — ​ Stock-based compensation ​ (36) (44) (37) ​ Depreciation and amortization ​ ​ (401) ​ (429) ​ (453) ​ Operating income (loss) ​ $ (1,514) 1,507 1,567 ​ Net revenue was generated from the following geographical areas: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2022 ​ 2021 ​ 2020 ​ ​ amounts in millions QxH ​ $ 7,359 8,277 8,505 ​ QVC International ​ 2,528 3,077 2,967 ​ ​ ​ $ 9,887 11,354 11,472 ​ ​ QVC's consolidated net revenue decreased 12.9% and decreased 1.0% for the years ended December 31, 2022 and 2021, respectively, as compared to the corresponding prior years.
II-14 Table of Contents QVC's operating results were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2023 ​ 2022 ​ ​ ​ amounts in millions Net revenue ​ $ 9,449 9,887 Cost of goods sold (excluding depreciation, amortization and Rocky Mount inventory losses shown below) ​ (6,273) (6,751) Operating expenses ​ (739) (760) SG&A expenses (excluding stock-based compensation) ​ (1,366) (1,268) Adjusted OIBDA ​ 1,071 1,108 Restructuring, penalties and fire related (costs), net of recoveries (including Rocky Mount inventory losses) ​ ​ 196 ​ 10 ​ Gains on sale of assets and sale leaseback transactions ​ ​ 113 ​ 520 ​ Impairment of intangible assets ​ ​ (326) ​ (2,715) ​ Stock-based compensation ​ (37) (36) Depreciation and amortization ​ (372) (401) Operating income (loss) ​ $ 645 (1,514) Net revenue was generated from the following geographical areas: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ 2023 ​ 2022 ​ ​ ​ amounts in millions QxH ​ $ 6,995 7,359 QVC International ​ 2,454 2,528 ​ ​ $ 9,449 9,887 ​ QVC's consolidated net revenue decreased 4.4% for the year ended December 31, 2023, as compared to the corresponding prior year.
Our consolidated revenue decreased 13.8% and 0.9% for the years ended December 31, 2022 and 2021, respectively, as compared to the corresponding prior year periods. QxH and QVC International revenue decreased $918 million and $549 million, respectively, and CBI revenue increased $75 million, during the year ended December 31, 2022, as compared to the same period in the prior year.
Our consolidated revenue decreased 9.8% for the year ended December 31, 2023, as compared to the corresponding prior year period. QxH, CBI and QVC International revenue decreased $364 million, $148 million and $74 million, respectively, during the year ended December 31, 2023, as compared to the same period in the prior year.
The following table provides a reconciliation of Operating income (loss) to Adjusted OIBDA. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2022 2021 2020 ​ ​ ​ amounts in millions ​ Operating income (loss) ​ $ (2,041) 1,087 1,572 ​ Depreciation and amortization ​ 481 ​ 537 ​ 562 ​ Stock-based compensation ​ 60 ​ 72 ​ 64 ​ Restructuring and fire related costs, net of (recoveries) ​ ​ 3 ​ 21 ​ — ​ Gains on sale leaseback transactions ​ ​ (520) ​ — ​ — ​ Impairment of intangible assets ​ ​ 3,081 ​ 363 ​ — ​ Adjusted OIBDA ​ $ 1,064 ​ 2,080 ​ 2,198 ​ Consolidated Adjusted OIBDA decreased $1,016 million and $118 million for the years ended December 31, 2022 and 2021, respectively, as compared to the corresponding prior year periods.
The following table provides a reconciliation of Operating income (loss) to Adjusted OIBDA. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ 2023 2022 ​ ​ amounts in millions Operating income (loss) ​ $ 590 (2,041) Depreciation and amortization ​ 407 ​ 481 ​ Stock-based compensation ​ 53 ​ 60 ​ Restructuring, penalties and fire related costs, net of (recoveries) ​ ​ (189) ​ 3 ​ Gains on sale of assets and sale leaseback transactions ​ ​ (113) ​ (520) ​ Impairment of intangible assets ​ ​ 326 ​ 3,081 ​ Adjusted OIBDA ​ $ 1,074 ​ 1,064 ​ Consolidated Adjusted OIBDA increased $10 million for the year ended December 31, 2023, as compared to the corresponding prior year period.
QVC International experienced shipped sales growth in constant currency in all categories except electronics and beauty. QVC's cost of goods sold as a percentage of net revenue was 68.3%, 64.9% and 64.7% for the years ended December 31, 2022, 2021 and 2020, respectively.
For the year ended December 31, 2023, QVC International experienced shipped sales growth in constant currency in beauty and home with declines across all other product categories. QVC's cost of goods sold as a percentage of net revenue was 66.4%, and 68.3% for the years ended December 31, 2023 and 2022, respectively.
Qurate Retail classifies obligations as current when they are contractually required to be satisfied in the next twelve months. ​ Strategies and Challenges Televised Shopping Businesses ​ On June 27, 2022, Qurate Retail announced a five-point turnaround plan designed to stabilize and differentiate its core HSN and QVC U.S. brands and expand the Company's leadership in video streaming commerce (“Project Athens”).
Strategies and Challenges QVC ​ On June 27, 2022, Qurate Retail announced a five-point turnaround plan designed to stabilize and differentiate its QVC U.S. and HSN brands and expand the Company's leadership in video streaming commerce (“Project Athens”).
Cost of goods sold as a percentage of net revenue increased for the year ended December 31, 2022, compared to the prior year, primarily due to higher inbound logistics costs driven by higher storage fees and ocean container rates.
Cost of goods sold as a percentage of net revenue decreased for the year ended December 31, 2023, compared to the prior year, primarily due to lower inbound logistics costs driven by lower storage fees and ocean container rates. CBI’s operating expenses are principally comprised of credit card fees and customer service expenses.
Qurate Retail and certain of its subsidiaries’ debt credit ratings were downgraded during the year ended December 31, 2022 as follows: (i) Fitch Ratings downgraded Qurate Retail, LI LLC, and QVC’s long-term issuer default ratings from “BB” to “BB-”; (ii) S&P Global downgraded Qurate Retail’s issuer credit rating from “BB-“ to “B+” and QVC’s issue-level rating from “BB+” to “BB”; and (iii) Moody’s downgraded LI LLC corporate family rating from “Ba3” to “B1,” and QVC’s debt ratings from “Ba2” to “Ba3.” Subsequent to December 31, 2022, S&P Global further downgraded Qurate Retail’s issuer credit rating from “B+” to “B-” and assigned a “B-” issuer rating to LI LLC, and lowered QVC’s issue-level rating from “BB” to “B+.” II-11 Table of Contents Qurate Retail and its subsidiaries are in compliance with their debt covenants as of December 31, 2022.
Qurate Retail and certain of its subsidiaries’ debt credit ratings were downgraded during the year ended December 31, 2023 as follows: (i) Fitch Ratings downgraded Qurate Retail, LI LLC, and QVC’s long-term issuer default ratings from “BB-” to “B”, LI LLC’s senior unsecured rating from “BB-” to “CCC+”, and QVC’s senior secured rating from “BB+” to “B+”; (ii) S&P Global downgraded LI LLC’s issuer credit rating from “B-” to “CCC+”, LI LLC’s senior unsecured rating from “CCC” to “CCC-”, and QVC’s senior secured rating from “B+” to “B-”; and (iii) Moody’s downgraded LI LLC corporate family rating from “B1” to “B3”, LI LLC’s senior unsecured rating from “B3” to “Caa2”, and QVC’s senior secured debt ratings from “Ba3” to “B2.” Qurate Retail and its subsidiaries are in compliance with their debt covenants as of December 31, 2023.
QxH, QVC International, and CBI Adjusted OIBDA decreased $108 million, and increased $52 million and $43 million for the year ended December 31, 2021, respectively, as compared to corresponding prior year period. See " Results of Operations - Businesses " below for a more complete discussion of the results of operations of QVC and CBI.
All remaining businesses experienced Adjusted OIBDA declines for the year ended December 31, 2023, as compared to the corresponding prior year period. See "Results of Operations – Businesses" below for a more complete discussion of the results of operations of QVC and CBI.
During the outbreak of COVID-19, the stay at home restrictions imposed in response to COVID-19 led many traditional brick-and-mortar retailers to temporarily close their stores but allowed distance retailers, such as QVC, to continue operating. As a result, QVC initially experienced an increase in new customers and an increase in demand for certain categories, such as home and electronics.
For example, as a result of COVID-19, many traditional brick-and-mortar retailers temporarily closed their stores while distance retailers, such as QVC, continued operating. As a result, QVC initially experienced an increase in new customers and an increase in demand for certain categories, such as home and electronics.
Information concerning the amount and timing of required payments, both accrued and off-balance sheet, under our material cash requirements, excluding uncertain tax positions as it is undeterminable when payments will be made, is summarized below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ After ​ ​ Total ​ 1 year ​ 2 - 3 years ​ 4 - 5 years ​ 5 years ​ ​ amounts in millions Consolidated material cash requirements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt (1) $ 6,895 216 1,206 1,656 3,817 ​ Interest payments (2) ​ 4,173 364 662 515 2,632 ​ Finance and operating lease obligations ​ 1,078 128 196 140 614 ​ Preferred Stock (3) ​ ​ 2,104 ​ 101 ​ 203 ​ 203 ​ 1,597 ​ Purchase orders and other obligations (4) ​ 3,079 3,033 36 10 — ​ Total ​ $ 17,329 3,842 2,303 2,524 8,660 ​ (1) Amounts are reflected in the table at the outstanding principal amount, assuming the debt instruments will remain outstanding until the stated maturity date, and may differ from the amounts stated in our consolidated balance sheet to the extent debt instruments (i) were issued at a discount or premium or (ii) have elements which are reported at fair value in our consolidated balance sheets.
II-11 Table of Contents Information concerning the amount and timing of required payments, both accrued and off-balance sheet, under our material cash requirements, excluding uncertain tax positions as it is undeterminable when payments will be made, is summarized below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by period ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ After ​ ​ Total ​ 1 year ​ 2 - 3 years ​ 4 - 5 years ​ 5 years ​ ​ amounts in millions Consolidated material cash requirements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt (1) $ 5,939 426 1,448 1,081 2,984 ​ Interest payments (2) ​ 3,631 334 596 421 2,280 ​ Finance and operating lease obligations ​ 1,363 117 209 195 842 ​ Preferred Stock (3) ​ ​ 2,008 ​ 102 ​ 203 ​ 203 ​ 1,500 ​ Purchase orders and other obligations (4) ​ 2,030 1,966 55 9 — ​ Total ​ $ 14,971 2,945 2,511 1,909 7,606 ​ (1) Amounts are reflected in the table at the outstanding principal amount, assuming the debt instruments will remain outstanding until the stated maturity date, and may differ from the amounts stated in our consolidated balance sheet to the extent debt instruments (i) were issued at a discount or premium or (ii) have elements which are reported at fair value in our consolidated balance sheets.
For a more detailed discussion and analysis of the financial results of the principal reporting segments, see "Results of Operations - Businesses" below.
For a more detailed discussion and analysis of the financial results of the principal reporting segments, see "Results of Operations - Businesses" below. A discussion regarding our financial condition and results of operations for fiscal year 2023 compared to fiscal year 2022 is presented below.
(“CBI”) consists of a portfolio of aspirational home and apparel brands, and is a reportable segment. Our “Corporate and other” category includes our consolidated subsidiary Zulily, LLC (“Zulily”), along with various cost and equity method investments.
(“CBI”) consists of a portfolio of aspirational home and apparel brands, and is a reportable segment. Our “Corporate and other” category includes various cost method investments. ​ Zulily, LLC (“Zulily”) was a wholly owned subsidiary of Qurate Retail until its divestiture on May 24, 2023.
QVC also experienced escalating shipping disruptions due to challenges in the global supply chain and labor market. These factors caused extended lead time on inventory orders. As a result, the delayed receipt of inventory ordered in prior periods impacted QVC’s ability to have the right products at the right time.
These factors caused extended lead time on inventory orders. As a result, the delayed receipt of inventory ordered in prior periods impacted QVC’s ability to have the right products at the right time. These factors also impacted QVC’s ability to offer certain goods and ship orders timely to our customers.
QVC International net revenue growth in constant currency was primarily due to a 1.8% increase in ASP, driven by ASP increases in Japan and the U.K., and a $24 million decrease in estimated product returns driven by Germany. These increases were partially offset by a 0.9% decrease in units shipped.
QVC International net revenue decline in constant currency was primarily due to a 3.1% decrease in units shipped across all markets except the U.K. and a $7 million decrease in shipping and handling revenue. These declines were partially offset by a 2.3% increase in ASP driven by Germany and Japan.
QVC decided not to rebuild the facility, and entered into an agreement to sell the property which closed in February 2023. QVC took steps to mitigate disruption to operations including diverting inbound orders, leveraging its existing fulfillment centers and supplementing these facilities with short-term leased space as needed.
QVC took steps to mitigate disruption to operations including diverting inbound orders, leveraging its existing fulfillment centers and supplementing these facilities with short-term leased space as needed. QVC sold the property in February 2023 and as of December 31, 2023 received net cash proceeds of $19 million.
The decrease in the year ended December 31, 2022 as compared to the corresponding prior year period was primarily due to an unrealized loss on the indemnification asset, an unrealized loss on derivative instruments compared to a gain in the prior year, and an unrealized loss related to equity securities, partially offset by unrealized gains on the Company’s exchangeable senior debentures driven by less growth in stock prices of the securities underlying the debentures than the prior year.
The increase in realized and unrealized losses for the year ended December 31, 2023 as compared to the corresponding prior year was primarily due to an increase in unrealized losses on the exchangeable senior debentures driven by increases in stock prices of the securities underlying the debentures compared to the prior year, and an increase in unrealized losses on the Company’s equity securities, partially offset by a decrease in unrealized losses on the indemnification asset (see note 4 of the accompanying consolidated financial statements).
In June 2022, QVC modified the finance lease for its distribution center in Ontario, California which reduced the term of the lease and removed QVC’s ability to take ownership of the distribution center at the end of the lease term. QVC will make annual payments over the modified lease term.
QVC does not anticipate these increased warehouse and logistics costs will have a material impact on future periods. In June 2022, QVC modified the finance lease for its distribution center in Ontario, California which reduced the term of the lease and removed QVC’s ability to take ownership of the distribution center at the end of the lease term.
As a result, the Company recognized tax sharing income of $79 million and $10 million for the years ended December 31, 2022 and 2021, respectively, and tax sharing expense of $39 million for the year ended December 31, 2020. Other, net.
As a result, the Company recognized tax sharing loss of $11 million and tax sharing income of $79 million for the years ended December 31, 2023 and 2022, respectively. Other, net. Other, net decreased $34 million for the year ended December 31, 2023, when compared to the corresponding prior year periods.
For the year ended December 31, 2021, QxH experienced shipped sales growth in apparel and accessories with declines in all other categories. The decrease in estimated product returns was primarily driven by a decrease in sales volume partially offset by a shift in product mix to higher return rate categories.
These declines were partially offset by a 3.1% increase in ASP. For the year ended December 31, 2023, QxH experienced shipped sales declines across all categories. The increase in estimated product returns was primarily driven by higher return rates and shifts in sales mix.
These indirect expenses have been submitted as part of QVC’s business interruption insurance claim; however, there can be no guarantee they will be recovered. QVC recorded $520 million of gains on sale leaseback transactions for the year ended December 31, 2022. The gains related to the sale leaseback of six owned and operated U.S. properties.
QVC recorded $520 million of gains on sale leaseback transactions for the year ended December 31, 2022. These gains related to the sale leaseback of six owned and operated U.S. properties.
These increases were partially offset by a $51 million decrease due to favorable exchange rates. The increase to estimated credit losses was due to lower expected collections in the current year compared to favorable adjustments recognized in the prior year based on actual collections experience partially offset by lower sales volume.
The decrease to estimated credit losses was due to an unfavorable adjustment recognized in the prior year compared to favorable adjustments recognized in the current year based on actual collections experience, lower sales volume and shifts in sales mix.
The increase in marketing costs in 2021 was driven by greater investment in advertising in addition to the increasing cost of digital marketing. QVC recorded a gain of $10 million and a loss of $21 million for the years ended December 31, 2022 and 2021, respectively, in restructuring and fire related costs, net of (recoveries).
QVC recorded a gain of $196 million and a gain of $10 million for the years ended December 31, 2023 and 2022, respectively, in restructuring, penalties and fire related costs, net of recoveries.
Although these product shortages and supply chain disruptions have moderated, in the event of ongoing or heightened resurgences of COVID-19, including new variants in the future, or the occurrence of another pandemic or epidemic, QVC cannot be certain that it will be able to identify alternative sources for its products without delay or greater cost to QVC. ​ In addition, there are several adverse indirect impacts of COVID-19 that have caused and could continue to cause a material negative impact to QVC’s financial results, including its capital and liquidity.
Although these product shortages and supply chain disruptions have moderated, in the event of resurgences of COVID-19, including new variants in the future, or the occurrence of another pandemic or epidemic, QVC cannot be certain that they will be able to identify alternative sources for their products without delay or without greater cost to us. ​ In addition, as a result of COVID-19 QVC experienced material negative impacts to our financial results, including our capital and liquidity, decreases in the disposable income of existing and potential new customers, heightened inflation, increased currency volatility resulting in adverse currency rate fluctuations and higher interest rates. ​ QVC has seen inflationary pressures during the period, including higher wages and merchandise costs.
QxH, QVC International and CBI operating income decreased $110 million, increased $50 million, and increased $44 million, respectively, for the year ended December 31, 2021, as compared to the corresponding prior year period. See " Results of Operations - Businesses " below for a more complete discussion of the results of operations of QVC and CBI.
See "Results of Operations – Businesses" below for a more complete discussion of the results of operations of QVC and CBI. Corporate and other revenue decreased $605 million for the year ended December 31, 2023, as compared to the same period in the prior year, due to Zulily’s results only being recorded through May 23, 2023. Operating income (loss).
CBI’s stock-based compensation expense increased $1 million for both of the years ended December 31, 2022 and December 31, 2021, compared to the corresponding periods in the prior year. The increase for the year ended December 31, 2022, compared to the prior year, was due to a change in the annual grant vesting period from 4 years to 3 years.
CBI’s stock-based compensation expense increased $1 million for the year ended December 31, 2023, compared to the corresponding period in the prior year, primarily due to a valuation adjustment.
The increase in cost of goods sold as a percentage of revenue in 2022 is primarily due to higher fulfillment costs across both segments driven by increased freight and warehousing costs.
The decrease in cost of goods sold as a percentage of revenue in 2023 is primarily due to product margin expansion across both segments and lower inventory obsolescence and lower freight costs driven by QxH. These decreases were partially offset by higher warehousing costs primarily in QVC International and to a lesser extent QxH.
Qurate Retail is right sizing its cost base to improve profitability and cash generation. In order to lower cost to serve, Qurate Retail will enhance review of spending to identify cost savings opportunities, including opportunities for workforce reduction. Additionally, we will improve product margin through market vendor efficiency and lower fulfillment costs through freight optimization and higher productivity.
Qurate Retail is right sizing its cost base to improve profitability and cash generation. In order to lower cost to serve, Qurate Retail will enhance review of spending to identify cost savings opportunities and opportunities to create new operational efficiencies, through end-to-end product and process reviews, and leveraging technology and process automation.
CBI must incur costs related to its marketing efforts, including but not limited to, photography, digital analytics, paper purchases, catalog print relationships, and real estate development.
CBI must incur costs related to its marketing efforts, including but not limited to, photography, digital analytics, paper purchases, catalog print relationships, and real estate development. As CBI grows, there will be challenges to market in a way that enables further consumer purchase expansion at a cost that continues to return value back to the business.
As a result, QVC II-5 Table of Contents recorded $20 million of severance expense during the year ended December 31, 2020, which is recorded in selling, general and administrative expense. ​ CBI. CBI’s goal is to continue to provide customers with appealing home furnishings and apparel products that delight and inspire.
During the year ended December 31, 2023, QVC implemented a workforce reduction and recorded restructuring charges of $13 million in restructuring, penalties and fire related costs, net of (recoveries) in the consolidated statements of operations. ​ CBI. ​ CBI’s goal is to continue to provide customers with appealing home furnishings and apparel products that delight and inspire.
Operating income (loss). Our consolidated operating income decreased $3,128 million and $485 million for the years ended December 31, 2022 and 2021, respectively, as compared to the corresponding prior year periods.
Our consolidated operating income increased $2,631 million for the year ended December 31, 2023 as compared to the corresponding prior year period.
These declines were partially offset by a $161 million decrease in estimated product returns, primarily driven by QxH.
These increases were partially offset by a $16 million decrease in estimated credit losses and a $12 million decrease in marketing costs, both primarily driven by QxH.

… 103 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−1 removed10 unchanged
Biggest changeWe believe that any losses incurred with regard to interest rate swaps would be largely offset by the effects of interest rate movements on the underlying debt facilities.
Biggest changeWe believe that any losses incurred with regard to interest rate swaps would be largely offset by the effects of interest rate movements on the underlying debt facilities. These measures allow our management to evaluate the success of our use of derivative instruments and to determine when to enter into or exit from derivative instruments. Item 8.
QVC's reported Adjusted OIBDA for the years ended December 31, 2022, 2021 and 2020 would have been impacted by approximately $4 million, $6 million and $5 million, respectively, for every 1% change in foreign currency exchange rates relative to the U.S. Dollar. We periodically assess the effectiveness of our derivative financial instruments.
QVC's reported Adjusted OIBDA for the years ended December 31, 2023, 2022 and 2021 would have been impacted by approximately $3 million, $4 million and $6 million, respectively, for every 1% change in foreign currency exchange rates relative to the U.S. Dollar. We periodically assess the effectiveness of our derivative financial instruments.
Assets and liabilities of foreign subsidiaries for which the functional currency is the local currency are translated into U.S. Dollars at period-end exchange rates, and the statements of operations are generally translated at the average exchange rate for the period. Exchange rate fluctuations on translating foreign currency financial statements into U.S.
Assets and liabilities of foreign subsidiaries for which the functional currency is the local currency are translated into U.S. Dollars at period-end exchange rates, and the statements of operations are generally translated at the average exchange rate for the period. Exchange rate fluctuations on II-18 Table of Contents translating foreign currency financial statements into U.S.
The financial statement schedules required by Regulation S-X are filed under Item 15 of this Annual Report on Form 10‑K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . None.
Financial Statements and Supplementary Data . The consolidated financial statements of Qurate Retail are filed under this Item, beginning on page II-25. The financial statement schedules required by Regulation S-X are filed under Item 15 of this Annual Report on Form 10‑K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . None.
As of December 31, 2022, our debt is comprised of the following amounts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable rate debt ​ Fixed rate debt ​ ​ Principal ​ Weighted avg ​ Principal ​ Weighted avg ​ ​ amount ​ interest rate ​ amount ​ interest rate ​ ​ dollar amounts in millions QxH and QVC International ​ $ 1,057 5.8 % $ 3,914 5.1 % CBI ​ $ 18 ​ 5.8 % $ — ​ — % Corporate and other ​ $ — — % $ 1,906 5.4 % ​ Qurate Retail is exposed to foreign exchange rate fluctuations related primarily to the monetary assets and liabilities and the financial results of QVC's foreign subsidiaries.
As of December 31, 2023, our debt is comprised of the following amounts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable rate debt ​ Fixed rate debt ​ ​ Principal ​ Weighted avg ​ Principal ​ Weighted avg ​ ​ amount ​ interest rate ​ amount ​ interest rate ​ ​ dollar amounts in millions QxH and QVC International ​ $ 857 7.0 % $ 3,509 5.2 % Corporate and other ​ $ — — % $ 1,573 6.1 % ​ Qurate Retail is exposed to foreign exchange rate fluctuations related primarily to the monetary assets and liabilities and the financial results of QVC's foreign subsidiaries.
Removed
These measures allow our management to evaluate the success of our use of derivative instruments and to determine when to enter into or exit from derivative instruments. ​ II-20 Table of Contents Item 8. Financial Statements and Supplementary Data . The consolidated financial statements of Qurate Retail are filed under this Item, beginning on page II-28.

Other QVCGA 10-K year-over-year comparisons