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Fair Values

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Note 14—Fair Values

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Certain of the Company’s assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis.

The following fair value hierarchy table summarizes the Company’s assets recorded at fair value on a recurring or non-recurring basis by the above categories as of June 30, 2024 and December 31, 2023 ($ in thousands):


		Fair Value Using
					Quoted
					market			Significant
					prices in			other			Significant
					active			observable			unobservable
					markets			inputs			inputs
		Total			(Level 1)			(Level 2)			(Level 3)
As of June 30, 2024
Recurring basis:
Available-for-sale debt securities⁽¹⁾		$	13,386		$	—		$	—		$	13,386
Other investments (refer to Note 7)			260,852			260,852			—			—

As of December 31, 2023
Non-recurring basis:
Available-for-sale debt securities⁽¹⁾		$	4,579		$	—		$	—		$	4,579
Other investments (refer to Note 7)			316,430			316,430			—			—

(1)	The fair value of the Company’s available-for-sale debt securities are based upon unadjusted third-party broker quotes and are classified as Level 3.

The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company’s combined and consolidated balance sheets for the six months ended June 30, 2024 ($ in thousands):


Beginning balance		$	4,579
Purchases			8,950
Unrealized gain (loss) recorded in other comprehensive income (loss)			(143)
Ending balance		$	13,386

Fair values of financial instruments—The following table presents the carrying value and fair value for the Company’s financial instruments ($ in millions):


		As of June 30, 2024						As of December 31, 2023
		Carrying			Fair			Carrying			Fair
		Value			Value			Value			Value
Assets
Loans receivable and other lending investments, net⁽¹⁾		$	31		$	28		$	21		$	17
Equity investment in Safe⁽²⁾			261			261			316			316
Cash and cash equivalents⁽³⁾			48			48			51			51
Restricted cash⁽³⁾			9			9			10			10

Liabilities
Debt obligations, net⁽¹⁾			197			201			193			193

(1)	The fair value of the Company’s loans receivable and other lending investments, net and debt obligations are classified as Level 3 within the fair value hierarchy.

(2)	The fair value of the Company’s investment in approximately 13.5 million shares of Safe common stock is classified as Level 1 within the fair value hierarchy, and is included within “Other investments” on the Company’s balance sheet.

(3)

The Company determined the carrying values of its cash and cash equivalents and restricted cash approximated their fair values. Restricted cash is recorded in “Deferred expenses and other assets, net” on the Company’s balance sheet. The fair value of the Company’s cash and cash equivalents and restricted cash are classified as Level 1 within the fair value hierarchy.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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