Liberty Broadband Corp Fair Value Disclosure
(5) 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. Level 1 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. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 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 Level 3.
The Company’s assets and liabilities measured at fair value are as follows:
December 31, 2025 | December 31, 2024 |
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Quoted prices | Significant | Quoted prices | Significant |
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in active | other | in active | other |
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markets for | observable | markets for | observable |
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identical assets | inputs | identical assets | inputs |
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Description | Total | (Level 1) | (Level 2) | Total | (Level 1) | (Level 2) |
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amounts in millions |
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Cash equivalents | $ | 57 | 57 | — | 89 | 89 | — | |||||||
Restricted cash equivalents | $ | 38 | 38 | — | 64 | 64 | — | |||||||
Exchangeable senior debentures | $ | 956 | — | 956 | 1,897 | — | 1,897 | |||||||
The Company’s exchangeable senior debentures are debt instruments with quoted market value prices that are not considered to be traded on “active markets”, as defined in GAAP, and are reported in the foregoing table as Level 2 fair value.
Other Financial Instruments
Other financial instruments not measured at fair value on a recurring basis include normal working capital accounts, equity securities, preferred stock and both current and long-term debt, with the exception of the 3.125% Debentures due 2054 prior to their redemption in the second quarter of 2025 and the 3.125% Debentures due 2053 (each as defined in note 7)). With the exception of long-term debt and preferred stock, the carrying amount approximates fair value due to the short maturity of these instruments as reported on our consolidated balance sheets. The carrying value of the Margin Loan Facility (as defined in note 7) bears interest at a variable rate and therefore is also considered to approximate fair value.
Realized and Unrealized Gains (Losses) on Financial Instruments
Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following:
Years ended December 31, | ||||||||
2025 | 2024 | 2023 |
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amounts in millions |
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Exchangeable senior debentures (1) | $ | 51 | (108) | (106) | ||||
Other (2) | — | (17) | 5 | |||||
$ | 51 |
| (125) |
| (101) | |||
| (1) | The Company has elected to account for its exchangeable senior debentures using the fair value option. Changes in the fair value of the exchangeable senior debentures recognized in the consolidated statements of operations are primarily due to market factors 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 the change in the instrument specific credit risk and recognizes such amount in other comprehensive income. The change in the fair value of the exchangeable senior debentures attributable to changes in the instrument specific credit risk before tax was a loss of $9 million, a gain of $27 million and a gain of $55 million for the years ended December 31, 2025, 2024 and 2023, respectively, net of the recognition of previously unrecognized gains and losses. During the years ended December 31, 2025 and 2024, the Company recognized $53 million and $9 million, respectively, of previously unrecognized gains related to the retirement of the 3.125% Debentures due 2054 and a portion of the 3.125% Debentures due 2053, respectively. The cumulative change was a gain of $20 million as of December 31, 2025, net of the recognition of previously unrecognized gains and losses. |
| (2) | For the year ended December 31, 2024, the Company recognized an impairment on an equity security. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 5, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 3, 2020 | |
| 2018 | Feb 8, 2019 | |
| 2017 | Feb 9, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 12, 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.