鶹app

Annual report pursuant to Section 13 and 15(d)

Assets and Liabilities Measured at Fair Value

v3.24.0.1
Assets and Liabilities Measured at Fair Value
12 Months Ended
Dec. 31, 2023
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. Level1 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. Level2 inputs are inputs, other than quoted market prices included within Level1, that are observable for the asset or liability, either directly or indirectly. Level3 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 Level3.

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

December31,2023

December31,2022

Quotedprices

Significantother

Quotedprices

Significantother

inactivemarkets

observable

inactivemarkets

observable

foridenticalassets

inputs

foridenticalassets

inputs

Description

Total

(Level1)

(Level2)

Total

(Level1)

(Level2)

amountsinmillions

Cash equivalents

$

1,142

1,142

2,026

2,026

Debt and equity securities

$

113

113

80

80

Financial instrument assets

$

141

117

24

393

86

307

Debt

$

3,059

3,059

3,331

3,331

Financial instrument liabilities

$

13

13

The majority of 鶹app’s Level2 financial instruments are debt related instruments and derivative instruments. 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 Level2 fair value. Debt and equity securities included in the table above are included in the Other assets line item in the consolidated balance sheets. 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, 2022, $219 million and $174 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, $8 million and $5 million of financial instrument liabilities included in the table above are included in the Other current liabilities and Other liabilities line items, respectively, 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):

YearsendedDecember31,

2023

2022

2021

Debt and equity securities

$

12

(7)

204

Debt measured at fair value (a)

(259)

717

(886)

Change in fair value of bond hedges (b)

(114)

(236)

193

Other

38

125

38

$

(323)

599

(451)

(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 gain of $18 million, loss of $4 million and loss of $107 million for the years ended December 31, 2023, 2022 and 2021, respectively. During the year ended December 31, 2023, the Company recognized $18 million of previously unrecognized gains related to the retirement of the 1% Convertible Notes (defined below), the 2.125% Exchangeable Senior Debentures due 2048, the Convertible Notes 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 $64 million as of December 31, 2023, net of the recognition of previously unrecognized gains and losses.
(b) Contemporaneously with the issuance of the Convertible Notes, 鶹app entered into privately negotiated cash convertible note hedges, which were expected to offset potential cash payments 鶹app would be required to make in excess of the principal amount of the Convertible Notes, upon conversion of the notes. The bond hedges were marked to market based on the trading price of underlying securities and other observable market data as the significant inputs (Level2). See note9 for additional discussion of the Convertible Notes and the bond hedges.