Annual report [Section 13 and 15(d), not S-K Item 405]

Assets and Liabilities Measured at Fair Value

v3.25.0.1
Assets and Liabilities Measured at Fair Value
 12 Months Ended
Dec. 31, 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. The Company does not have any recurring assets or liabilities measured at fair value that would be considered Level 3.

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

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December 31, 2024

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December 31, 2023

 

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Quoted prices

    

Significant other

    

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Quoted prices

    

Significant other

 

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in active markets

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observable

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in active markets

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observable

 

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for identical assets

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inputs

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for identical assets

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inputs

 

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

 

Cash equivalents

    

$

2,466

    

2,466

    

—

    

1,053

    

1,053

    

—

  

Debt and equity securities

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$

—

    

—

    

—

 

113

    

113

    

—

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Financial instrument assets

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$

167

    

84

    

83

 

88

    

64

    

24

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Debt

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$

2,144

    

—

    

2,144

 

1,797

    

—

    

1,797

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Financial instrument liabilities

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$

138

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—

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138

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13

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—

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13

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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. The fair value of debt related instruments are based on quoted market prices but not considered to be traded on “active markets,” as defined by GAAP. Accordingly, those debt and equity securities, financial instruments and debt or debt related instruments are reported in the foregoing table as Level 2 fair value. Debt and equity securities included in the table above are included in the Other assets line item in the consolidated balance sheet. As of December 31, 2024, $27 million and $142 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 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 consolidated balance sheets. As of December 31, 2023, $5 million of financial instrument liabilities included in the table above are included in the Other liabilities line item in the consolidated balance sheet.

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

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

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Years ended December 31,

 

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2024

    

2023

    

2022

 

Debt measured at fair value (a)

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$

(339)

 

(224)

 

396

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Foreign currency forward contracts

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(138)

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—

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—

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Interest rate swaps

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103

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28

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121

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Debt and equity securities

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(5)

 

27

 

(7)

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Other

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(4)

 

2

 

14

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$

(383)

 

(167)

 

524

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(a) The Company elected to account for its exchangeable senior debentures and convertible notes (as described in note 9) using the fair value option. Changes in the fair value of the exchangeable senior debentures and convertible notes recognized in the 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 cash convertible notes attributable to changes in the instrument specific credit risk was a loss of $84 million, gain of $24 million and loss of $30 million for the years ended December 31, 2024, 2023 and 2022, respectively. During the year ended December 31, 2024, the Company recognized $2 million of previously unrecognized losses related to the retirement of the 0.5% Exchangeable Senior Debentures due 2050, which was recognized through other, net in the consolidated statements of operations. During the year ended December 31, 2023, the Company recognized $27 million of previously unrecognized losses related to the retirement of the 1% Cash Convertible Notes due 2023 and the 0.5% Exchangeable Senior Debentures due 2050, which was recognized through other, net in the consolidated statements of operations. The cumulative change since issuance was a gain of $51 million as of December 31, 2024, net of the recognition of previously unrecognized gains and losses.