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Quarterly report pursuant to Section 13 or 15(d)

Assets and Liabilities Measured at Fair Value (Tables)

v3.23.3
Assets and Liabilities Measured at Fair Value (Tables)
9 Months Ended
Sep. 30, 2023
Assets and Liabilities Measured at Fair Value Ìý
Assets and Liabilities Measured at Fair Value

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FairÌýValueÌýMeasurementsÌýat

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FairÌýValueÌýMeasurementsÌýat

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September 30, 2023

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December 31, 2022

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Quoted

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prices

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prices

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inÌýactive

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Significant

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inÌýactive

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Significant

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markets

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other

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markets

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other

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forÌýidentical

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observable

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forÌýidentical

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observable

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assets

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inputs

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assets

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inputs

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Description

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Total

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(LevelÌý1)

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(LevelÌý2)

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Total

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(LevelÌý1)

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(LevelÌý2)

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amountsÌýinÌýmillions

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Cash equivalents

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$

1,707

Ìý

1,707

Ìý

—

Ìý

2,026

Ìý

2,026

Ìý

—

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Debt and equity securities

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$

167

Ìý

167

Ìý

—

Ìý

80

Ìý

80

Ìý

—

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Financial instrument assets

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$

210

Ìý

111

Ìý

99

Ìý

393

Ìý

86

Ìý

307

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Debt

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$

3,124

Ìý

—

Ìý

3,124

Ìý

3,331

Ìý

—

Ìý

3,331

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Realized and Unrealized Gains (Losses) on Financial Instruments

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Three months ended

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Nine months ended

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September 30,

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September 30,

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ÌýÌýÌýÌý

2023

ÌýÌýÌýÌý

2022

ÌýÌýÌýÌý

2023

ÌýÌýÌýÌý

2022

Ìý

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amountsÌýinÌýmillions

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Debt and equity securities

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$

(9)

Ìý

2

Ìý

7

Ìý

(10)

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Debt measured at fair value (a)

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8

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45

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(97)

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691

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Change in fair value of bond hedges (b)

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(15)

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21

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(114)

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(248)

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Other

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Ìý

27

Ìý

38

Ìý

73

Ìý

112

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$

11

Ìý

106

Ìý

(131)

Ìý

545

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(a) The Company elected to account for its exchangeable senior debentures and convertible notes (as described in note 7) using the fair value option. Changes in the fair value of the exchangeable senior debentures and convertible notes recognized in the condensed consolidated statements of operations are primarily due to market factors primarily driven by changes in the fair value of the underlying shares into which the debt is exchangeable. The Company isolates the portion of the unrealized gain (loss) attributable to changes in the instrument specific credit risk and recognizes such amount in other comprehensive earnings (loss). The change in the fair value of the exchangeable senior debentures and convertible notes attributable to changes in the instrument specific credit risk was a gain of $41 million and loss of $41 million for the three months ended September 30, 2023 and 2022, respectively, and a gain of $11 million and zero net impact for the nine months ended September 30, 2023 and 2022, respectively. During the three and nine months ended September 30, 2023, the Company recognized $28 million of previously unrecognized losses and $15 million of previously unrecognized gains, respectively, related to the retirement of the 1% Convertible Notes (defined below), the 2.125% Exchangeable Senior Debentures due 2048 and a portion of the Convertible Notes, which was recognized through other, net in the condensed consolidated statements of operations. The cumulative change since issuance was a gain of $60 million as of September 30, 2023, net of the recognition of previously unrecognized gains and losses.
(b) Contemporaneously with the issuance of the Convertible Notes, Liberty entered into privately negotiated cash convertible note hedges, which are expected to offset potential cash payments Liberty would be required to make in excess of the principal amount of the Convertible Notes, upon conversion of the notes. The bond hedges are marked-to-market based on the trading price of underlying Series A Liberty SiriusXM, Liberty Braves and Liberty Formula One securities and other observable market data as the significant inputs (Level 2). See note 7 for additional discussion of the bond hedges.