Annual report pursuant to Section 13 and 15(d)

Assets and Liabilities Measured at Fair Value (Tables)

v3.22.4
Assets and Liabilities Measured at Fair Value (Tables)
12 Months Ended
Dec. 31, 2022
Assets and Liabilities Measured at Fair Value

December 31, 2022

December 31, 2021

 

    

    

Quoted prices

    

Significant other

    

    

Quoted prices

    

Significant other

 

in active markets

observable

in active markets

observable

 

for identical assets

inputs

for identical assets

inputs

 

Description

Total

(Level 1)

(Level 2)

Total

(Level 1)

(Level 2)

 

amounts in millions

 

Cash equivalents

    

$

2,026

    

2,026

    

    

2,436

    

2,436

    

  

Short-term marketable securities

$

    

70

    

70

    

Investment in trust account

$

575

575

Debt and equity securities

$

80

    

80

    

 

217

    

217

    

Financial instrument assets

$

393

    

86

    

307

 

640

    

99

    

541

Debt

$

3,331

    

    

3,331

 

5,222

    

    

5,222

Financial instrument liabilities

$

    

    

 

59

    

20

    

39

Realized and Unrealized Gains (Losses) on Financial Instruments

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

Years ended December 31,

 

    

2022

    

2021

    

2020

 

Debt and equity securities

$

(7)

 

204

 

(74)

Debt measured at fair value (a)

 

717

 

(886)

 

(114)

Change in fair value of bond hedges (b)

(236)

193

(127)

Other

 

125

 

38

 

(87)

$

599

 

(451)

 

(402)

(a) The Company elected to account for its exchangeable senior debentures and convertible notes 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 $4 million, loss of $107 million and gain of $148 million for the years ended December 31, 2022, 2021 and 2020, respectively, and the cumulative change was a gain of $64 million as of December 31, 2022.
(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 9 for additional discussion of the Convertible Notes and the bond hedges.