Annual report pursuant to Section 13 and 15(d)

Assets and Liabilities Measured at Fair Value

v3.8.0.1
Assets and Liabilities Measured at Fair Value
 12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Fair value disclosures
Financial Instruments and Fair Value Measurements
For assets and liabilities required to be reported or disclosed at fair value, U.S. GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs, other than quoted market prices included within Level 1, are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.
The Company's assets and liabilities measured or disclosed at fair value were as follows:

Fair value measurements at December 31, 2017 using
 
(in millions)
Total

Quoted prices
in active
markets for
identical
assets
(Level 1)

Significant
other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

Current assets:




Cash equivalents
$
42

42

—

—

Non-current assets:




Interest rate swap arrangements (note 8)
2

—

2

—

Long-term liabilities:




Debt (note 8)
5,132

—

5,132

—



Fair value measurements at December 31, 2016 using
 
(in millions)
Total

Quoted prices
in active
markets for
identical
assets
(Level 1)

Significant
other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

Current assets:
 
 
 
 
Cash equivalents
$
113

113

—

—

Non-current assets:
 
 
 


Interest rate swap arrangements (note 8)
2

—

2

—

Long-term liabilities:
 
 
 
 
Debt (note 8)
5,092

—

5,092

—


The Company's Level 2 financial liabilities are debt instruments with quoted market prices that are not considered to be traded on "active markets," as defined in U.S. GAAP. Accordingly, the financial instruments are reported in the foregoing tables as Level 2 fair value instruments.
QVC entered into a 500 million Euro basis swap as a hedge of a net investment in a foreign subsidiary during the fourth quarter of 2015 and the underlying derivative matured on March 15, 2016. The purpose of this hedge was to protect QVC's investment in the foreign subsidiary against the variability of the U.S. Dollar and Euro exchange rate. The Company entered into a similar hedge of the same net investment in a foreign subsidiary effective March 15, 2016 which subsequently matured on September 15, 2016. Effective September 15, 2016, the Company entered into a foreign exchange forward contract with the same purpose as the previous hedges. The forward contract entailed QVC's sale of 500 million Euro at a forward rate which matured on December 19, 2016. The gain is recognized in other comprehensive income.