FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of carrying value and fair value of notes and debentures

The following table sets forth the carrying value and fair value of our financial assets and liabilities as of December 31, 2020 and 2019 (in millions):


	2020				2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 1:
Investments in equity securities	$	68	$	68	$	2	$	2
STG:
Money market funds	448		448		354		354
Deferred compensation assets	42		42		36		36
Deferred compensation liabilities	36		36		33		33
DSG:
Money market funds	292		292		559		559

Level 2 (a):
STG:
5.875% Senior Unsecured Notes due 2026	348		358		350		368
5.625% Senior Unsecured Notes due 2024 (b)	—		—		550		566
5.500% Senior Unsecured Notes due 2030	500		520		500		511
5.125% Senior Unsecured Notes due 2027	400		408		400		411
4.125% Senior Secured Notes due 2030 (b)	750		770		—		—
Term Loan B (b)	1,119		1,107		1,329		1,326
Term Loan B-2	1,284		1,264		1,297		1,300

DSG:
12.750% Senior Secured Notes due 2026 (c)	31		28		—		—
6.625% Senior Unsecured Notes due 2027 (c)	1,744		1,056		1,825		1,775
5.375% Senior Secured Notes due 2026	3,050		2,483		3,050		3,085
Term Loan	3,259		2,884		3,292		3,284
Accounts Receivable Securitization Facility (d)	177		177		—		—
Debt of variable interest entities	17		17		21		21
Debt of non-media subsidiaries	17		17		18		18

Level 3:
Options and warrants (e)	332		332		—		—

(a)Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing costs, which are excluded in the above table, of $183 million and $231 million as of December 31, 2020 and 2019, respectively.

(b)On December 4, 2020, we issued $750 million aggregate principal amount of the STG 4.125% Secured Notes, the net proceeds of which were used, plus cash on hand, to redeem $550 million aggregate principal amount of the STG 5.625% Notes, as well as repay $200 million of STG's Term Loan B-1. See Note 7. Notes Payable and Commercial Bank Financing for additional information.

(c)On June 10, 2020, we exchanged $66.5 million aggregate principal amount of the DSG 6.625% Notes for cash payments of $10 million, including accrued but unpaid interest, and $31 million aggregate principal amount of the newly issued DSG 12.750% Secured Notes. See Note 7. Notes Payable and Commercial Bank Financing for additional information.

(d)We entered into the A/R Facility on September 23, 2020. As of December 31, 2020, the balance of the loans under the A/R Facility was $177 million. See Note 7. Notes Payable and Commercial Bank Financing for additional information.

(e)On November 18, 2020, we entered into a commercial agreement with Bally's and received warrants and options to acquire common equity in the business. These financial instruments were determined to have an initial value of $199 million. During the year ended December 31, 2020 we recorded $133 million of fair value adjustments related to these interests. The fair value of the warrants are primarily derived from the quoted trading prices of the underlying common equity adjusted for a 25% discount for lack of marketability (DLOM). The fair value of the options is derived utilizing the Black Scholes valuation model. The most significant inputs include the trading price of the underlying common stock, the exercise price of the options, which range from $30 to $45 per share, and a DLOM of 25%. There are certain restrictions surrounding the sale and ownership of common stock and the Company has agreed not to sell any shares beneficially owned prior to the first anniversary of the agreement. The Company is also precluded from owning more than 4.9% of the outstanding common shares of Bally's, inclusive of shares obtained through the exercise of the warrants and options described above. See Note 6. Other Assets for further discussion.

Schedule of changes in Level 3 financial liabilities measured on recurring basis

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy (in millions):


	Options and Warrants




Fair value at December 31, 2019	$	—
Acquisition	199
Measurement adjustments	133
Fair value at December 31, 2020	$	332