Quarterly report pursuant to Section 13 or 15(d)

Assets and Liabilities Measured at Fair Value (Tables)

v3.23.1
Assets and Liabilities Measured at Fair Value (Tables)
3 Months Ended
Mar. 31, 2023
Assets and Liabilities Measured at Fair Value

Fair Value Measurements at

Fair Value Measurements at

March 31, 2023

December 31, 2022

    

    

Quoted

    

    

    

Quoted

    

  

prices

prices

in active

Significant

in active

Significant

markets

other

markets

other

for identical

observable

for identical

observable

assets

inputs

assets

inputs

Description

Total

(Level 1)

(Level 2)

Total

(Level 1)

(Level 2)

amounts in millions

Cash equivalents

$

1,794

 

1,794

 

 

2,026

 

2,026

 

Debt and equity securities

$

172

 

172

 

 

80

 

80

 

Financial instrument assets

$

184

 

91

 

93

 

393

 

86

 

307

Debt

$

3,043

 

 

3,043

 

3,331

 

 

3,331

Realized and Unrealized Gains (Losses) on Financial Instruments

Three months ended

March 31,

    

2023

    

2022

 

amounts in millions

Debt and equity securities

$

6

 

(5)

Debt measured at fair value (a)

55

69

Change in fair value of bond hedges (b)

(110)

(68)

Other

 

3

 

63

$

(46)

 

59

(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 were losses of $7 million and $11 million for the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023, the Company recognized $25 million of previously unrecognized gains related to the retirement of the 1% Convertible Notes (defined below), a portion of 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 $32 million as of March 31, 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.