Cannae Holdings, Inc.CNNE

Cannae Holdings, Inc. Fair Value Disclosure

10-KFiled Mar 2, 20263 min read
Fair Value Measurements
The fair value hierarchy established by the accounting standards on fair value measurements includes three levels, which are based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities that are recorded in the Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows:
Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access.
Level 2. Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.
Level 3. Financial assets and liabilities whose values are based on model inputs that are unobservable.
The Company’s financial instruments also include cash, cash equivalents, receivables and accounts payable. The carrying values of these financial instruments approximate the fair values as maturities are less than three months.
Recurring Fair Value Measurements
      The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024, respectively:
 December 31, 2025
 Level 1Level 2Level 3Total
 (In millions)
Assets:
Cash and cash equivalents$182.0 $— $— $182.0 
Equity securities:
Other1.4 — — 1.4 
Total equity securities1.4 — — 1.4 
     Total assets$183.4 $— $— $183.4 
Liabilities:
Put Right$— $15.0 $— $15.0 
Total accounts payable and other accrued liabilities, current— 15.0 — 15.0 
Total liabilities$— $15.0 $— $15.0 
 December 31, 2024
 Level 1Level 2Level 3Total
 (In millions)
Assets:
Cash and cash equivalents$131.5 $— $— $131.5 
Short-term investments6.2 — — 6.2 
Equity securities:
Paysafe42.1 — — 42.1 
Other14.1 — — 14.1 
Total equity securities56.2 — — 56.2 
Total assets$193.9 $— $— $193.9 
We had no material assets or liabilities valued on a recurring basis using Level 3 inputs as of December 31, 2025 and 2024.
Additional information regarding the fair value of our investment portfolio is included in Note B - Investments.
The carrying amounts of trade receivables and notes receivable approximate fair value due to their short-term nature. The fair value of our notes payable is included in Note K - Notes Payable.
The Put Right is accounted for at fair value calculated using a Monte Carlo Simulation with Level 2 fair value hierarchy inputs. The valuation model utilizes the stock price and growth rate of the Company's common stock, the two-year duration of the DSA, the implied volatility of the Company's common stock using comparable public companies and a discount rate based on US treasury securities of similar duration to the Put Right.
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Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Feb 27, 2025
2023Feb 29, 2024
2022Mar 1, 2023
2021Feb 25, 2022
2020Feb 26, 2021
2019Mar 2, 2020
2018Mar 18, 2019
2017Mar 26, 2018

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.

Other Available Disclosures

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