Quarterly report pursuant to Section 13 or 15(d)

Assets and Liabilities Measured at Fair Value

v3.24.3
Assets and Liabilities Measured at Fair Value
 9 Months Ended
Sep. 30, 2024
Assets and Liabilities Measured at Fair Value  
Assets and Liabilities Measured at Fair Value

(6)   Assets and Liabilities Measured at Fair Value

For assets and liabilities required to be reported at fair value, 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 are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Liberty does not have any assets or liabilities required to be measured at fair value considered to be Level 3.

Liberty's assets and liabilities measured at fair value are as follows:

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Fair Value Measurements at

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Fair Value Measurements at

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September 30, 2024

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December 31, 2023

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Quoted

    

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Quoted

    

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prices

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prices

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in active

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Significant

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in active

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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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for identical

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observable

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for identical

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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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(Level 1)

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(Level 2)

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Total

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(Level 1)

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(Level 2)

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amounts in millions

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Cash equivalents

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$

2,677

 

2,677

 

—

 

1,053

 

1,053

 

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Debt and equity securities

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$

—

 

—

 

—

 

113

 

113

 

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Financial instrument assets

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$

185

 

86

 

99

 

88

 

64

 

24

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Debt

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$

1,957

 

—

 

1,957

 

1,797

 

—

 

1,797

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The majority of Liberty's Level 2 financial instruments are debt related instruments and derivative instruments, which include foreign currency forward contracts and interest rate swaps. These assets and liabilities are not always traded publicly or not considered to be traded on "active markets," as defined in GAAP. The fair values for such instruments are derived from a typical model using observable market data as the significant inputs or a trading price of a similar asset or liability is utilized. Accordingly, those debt securities, financial instruments and debt or debt related instruments are reported in the foregoing table as Level 2 fair value. As of December 31, 2023, debt and equity securities included in the table above are included in the Other assets line item in the condensed consolidated balance sheet. As of September 30, 2024, $95 million and $90 million of financial instrument assets included in the table above are included in the Other current assets and Other assets line items, respectively, in the condensed consolidated balance sheet. As of December 31,

2023, financial instrument assets included in the table above are included in the Other assets line item in the condensed consolidated balance sheet.

Realized and Unrealized Gains (Losses) on Financial Instruments, net

Realized and unrealized gains (losses) on financial instruments, net is comprised of changes in the fair value of the following:

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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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2024

    

2023

    

2024

    

2023

 

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amounts in millions

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Debt and equity securities

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$

—

 

3

 

16

 

19

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Foreign currency forward contracts

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85

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—

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93

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—

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Debt measured at fair value (a)

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(106)

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8

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(109)

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(132)

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Other

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(34)

 

28

 

11

 

68

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$

(55)

 

39

 

11

 

(45)

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(a) The Company elected to account for its exchangeable senior debentures and convertible notes (as described in note 8) 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 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 loss of $56 million and gain of $56 million for the three months ended September 30, 2024 and 2023, respectively, and a loss of $64 million and gain of $38 million for the nine months ended September 30, 2024 and 2023, respectively. The cumulative change since issuance was a gain of $70 million as of September 30, 2024, net of the recognition of previously unrecognized gains and losses.