Cable One, Inc.CABO
Cable One, Inc. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Financial Assets and Liabilities. The Company has estimated the fair values of its financial instruments as of December 31, 2025 and 2024 using available market information or other appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the following fair value estimates are not necessarily indicative of the amounts the Company would realize in an actual market exchange.
The fair value hierarchy levels, carrying amounts and fair values of the Company’s financial assets and liabilities as of December 31, 2025 and 2024 were as follows (dollars in thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||
| Fair Value Hierarchy | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents: | ||||||||||||||||||||||||||||||||
| Money market investments | Level 1 | $ | 70,261 | $ | 70,261 | $ | 67,998 | $ | 67,998 | |||||||||||||||||||||||
| Other noncurrent assets (including current portion): | ||||||||||||||||||||||||||||||||
| Interest rate swap asset | Level 2 | $ | 25,187 | $ | 25,187 | $ | 63,859 | $ | 63,859 | |||||||||||||||||||||||
New MBI Net Option | Level 3 | $ | 31,830 | $ | 31,830 | $ | 84,120 | $ | 84,120 | |||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Long-term debt (including current portion): | ||||||||||||||||||||||||||||||||
| Term loans | Level 2 | $ | 1,706,812 | $ | 1,641,873 | $ | 1,729,221 | $ | 1,698,873 | |||||||||||||||||||||||
Revolving Credit Facility | Level 2 | $ | — | $ | — | $ | 313,000 | $ | 309,870 | |||||||||||||||||||||||
| Senior Notes | Level 2 | $ | 582,013 | $ | 448,907 | $ | 650,000 | $ | 542,750 | |||||||||||||||||||||||
| Convertible Notes | Level 2 | $ | 920,000 | $ | 849,275 | $ | 920,000 | $ | 821,342 | |||||||||||||||||||||||
Money market investments are held primarily in U.S. Treasury securities and registered money market funds and are valued using a market approach based on quoted market prices (level 1). Money market investments with original maturities of three months or less are included within cash and cash equivalents in the consolidated balance sheets. Interest rate swaps are measured at fair value within the consolidated balance sheets on a recurring basis, with fair value determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (level 2). The fair value of the New MBI Net Option is measured using Monte Carlo simulations that use inputs considered unobservable and significant to the fair value measurement (level 3). The fair value of the term loans, Revolving Credit Facility, Senior Notes and Convertible Notes are estimated based on market prices for similar instruments in active markets (level 2).
The assumptions used to determine the fair value of the New MBI Net Option consisted of the following:
December 31, 2025(1) | December 31, 2024 | |||||||||||||
| MBI's equity volatility | N/A | 51.0 | % | |||||||||||
MBI's adjusted EBITDA volatility | N/A | 20.0 | % | |||||||||||
MBI's adjusted EBITDA risk-adjusted discount rate | N/A | 8.0 | % | |||||||||||
(1)The purchase price payable by the Company upon the exercise of the Call Option or Put Option, as applicable, is calculated under a formula based on a multiple of MBI's adjusted EBITDA for the twelve-month period ended June 30, 2025, and MBI’s total net indebtedness. As this twelve-month measurement period ended on June 30, 2025, assumptions regarding MBI's adjusted EBITDA volatility and MBI's risk-adjusted discount rate assumptions are no longer applicable when calculating the fair value of the New MBI Net Option as of December 31, 2025. Further, MBI's equity volatility assumption was also no longer applicable as of December 31, 2025 given the New MBI Net Option was valued with the expectation that it would be exercised as soon as the exercise window opens at the beginning of 2026. Therefore, the result of the Monte Carlo simulations as of December 31, 2025 effectively represents the intrinsic value of the New MBI Net Option at year-end. The estimated equity value of MBI, which is derived from discounted cash flow and guideline public company valuation methods, continues to be a significant input into the valuation of the New MBI Net Option.
The Company regularly evaluates each of the assumptions used in establishing the fair value of the New MBI Net Option. Significant changes in any of these assumptions could result in a significantly lower or higher fair value measurement. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. Refer to note 5 for further information on the New MBI Net Option.
The carrying amounts of accounts receivable, prepaid and other current assets, accounts payable and accrued liabilities and other financial assets and liabilities approximate fair value because of the short-term nature of these instruments.
Nonfinancial Assets and Liabilities. The Company’s nonfinancial assets, such as property, plant and equipment, intangible assets and goodwill, are not measured at fair value on a recurring basis. Assets acquired, including identifiable intangible assets and goodwill, and liabilities assumed in acquisitions are recorded at fair value on the respective acquisition dates, subject to potential future measurement period adjustments. Nonfinancial assets are subject to fair value adjustments when there is evidence that impairment may exist. Other than the impairments of the Company's franchise agreements and goodwill recognized in the second quarter of 2025 (refer to note 7), no other impairments of nonfinancial assets and liabilities were recorded during any of the periods presented.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Mar 7, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.