Liberty Global Ltd.LBTYA
Liberty Global Ltd. Fair Value Disclosure
Fair Value Measurements
We use the fair value method to account for (i) certain of our investments and (ii) our derivative instruments. The reported fair values of these investments and derivative instruments as of December 31, 2025 are unlikely to represent the value that will be paid or received upon the ultimate settlement or disposition of these assets and liabilities.
GAAP provides for a fair value hierarchy that prioritizes the 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. We record transfers of assets or liabilities into or out of Levels 1, 2 or 3 at the beginning of the quarter during which the transfer occurred. During the second quarter of 2025, the Vodafone Collar transferred from Level 3 to Level 2 and, as further described in note 7, was fully settled during the third quarter of 2025.
All of our Level 2 inputs (interest rate futures, swap rates and certain of the inputs for our weighted average cost of capital calculations) and certain of our Level 3 inputs (forecasted volatilities and credit spreads) are obtained from pricing services. These inputs, or interpolations or extrapolations thereof, are used in our internal models to calculate, among other items, yield curves, forward interest and currency rates and weighted average cost of capital rates. In the normal course of business, we receive market value assessments from the counterparties to our derivative contracts. Although we compare these assessments to our internal valuations and investigate unexpected differences, we do not otherwise rely on counterparty quotes to determine the fair values of our derivative instruments. The midpoints of applicable bid and ask ranges generally are used as inputs for our internal valuations.
For our investments in publicly-traded companies, the recurring fair value measurements are based on the quoted closing price of the respective shares at each reporting date. Accordingly, the valuations of these investments fall under Level 1 of the fair value hierarchy. Our other investments that we account for at fair value are privately-held companies, and therefore, quoted market prices are unavailable. For such investments, we generally apply a measurement alternative to record these investments at cost less impairment, adjusted for observable price changes in orderly transactions. For those privately-held investments for which we do not apply the measurement alternative, we apply a combination of an income approach (discounted cash flow model based on forecasts) and a market approach (transactions with new third-party investors or market multiples of similar businesses). With the exception of certain inputs for our weighted average cost of capital calculations that are derived from pricing services, the inputs used to value these investments are based on unobservable inputs derived from our assumptions. Therefore, the valuation of our privately-held investments falls under Level 3 of the fair value hierarchy. Any reasonably foreseeable changes in assumed levels of unobservable inputs for the valuations of our Level 3 investments would not be expected to have a material impact on our financial position or results of operations.
The recurring fair value measurements of our equity-related derivative instruments are based on standard option pricing models, which require the input of observable and unobservable variables such as exchange-traded equity prices, risk-free interest rates, dividend forecasts and forecasted volatilities of the underlying equity securities. The valuations of our equity-related derivative instruments are based on a combination of Level 1 inputs (exchange-traded equity prices), Level 2 inputs (interest rate futures and swap rates) and Level 3 inputs (forecasted volatilities). As changes in volatilities could have a significant impact on the overall valuations over the terms of the derivative instruments, we have determined that these valuations fall under Level 3 of the fair value hierarchy. For the December 31, 2024 valuation of the Vodafone Collar, we used estimated volatilities based predominantly on market observations.
In order to manage our interest rate and foreign currency exchange risk, we have entered into various derivative instruments, as further described in note 8. The recurring fair value measurements of these instruments are determined using discounted cash flow models. Most of the inputs to these discounted cash flow models consist of, or are derived from, observable Level 2 data for substantially the full term of these instruments. This observable data mostly includes currency rates, interest rate futures and swap rates, which are retrieved or derived from available market data. Although we may extrapolate or interpolate this data, we do not otherwise alter this data in performing our valuations. We classify deal-contingent hedges under Level 3 of the fair value hierarchy, as we adjust the valuations to reflect an internal judgment of the probability of the completion of the deal, which is unobservable. We use a Monte Carlo based approach to incorporate a credit risk valuation adjustment in our fair value measurements to estimate the impact of both our own nonperformance risk and the nonperformance risk of our counterparties. The inputs used for our credit risk valuations, including our and our counterparties’ credit spreads, represent our most significant Level 3 inputs, and these inputs are used to derive the credit risk valuation adjustments with respect to these instruments. As we would not expect these parameters to have a significant impact on the valuations of these instruments, we have determined that these valuations fall under Level 2 of the fair value hierarchy. Our credit risk valuation adjustments with respect to our cross-currency and interest rate swap contracts are quantified and further explained in note 8.
Fair value measurements are also used for nonrecurring valuations performed in connection with acquisition accounting and impairment assessments. These nonrecurring valuations include the valuation of reporting units, customer relationships and other intangible assets (including franchise and licensing rights), property and equipment and the implied value of goodwill. The valuation of reporting units is based on an income-based approach (discounted cash flows) using assumptions in our long-range business plans or a market-based approach (current multiples of comparable public companies and guideline transactions) and, in some cases, a combination of an income-based approach and a market-based approach. With the exception of certain inputs for our weighted average cost of capital and discount rate calculations that are derived from pricing services, the inputs used in our discounted cash flow analyses, such as forecasts of future cash flows, including inputs with respect to revenue growth and Adjusted EBITDA margin (as defined in note 19), and terminal growth rates, are based on our assumptions. The
valuation of customer relationships is primarily based on an excess earnings methodology, which is a form of a discounted cash flow analysis. The excess earnings methodology requires us to estimate the specific cash flows expected from the customer relationship, considering such factors as estimated customer life, the revenue expected to be generated over the life of the customer relationship, contributory asset charges and other factors. Tangible assets are typically valued using a replacement or reproduction cost approach, considering factors such as current prices of the same or similar equipment, the age of the equipment and economic obsolescence. The implied value of goodwill is determined by allocating the fair value of a reporting unit to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination, with the residual amount allocated to goodwill. Most of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. During 2025, we did not perform any significant nonrecurring fair value measurements. During 2024, we performed a nonrecurring valuation associated with the Formula E Acquisition, including franchise-related intangible assets, using a weighted average cost of capital of 10.0%.
A summary of our assets and liabilities that are measured at fair value on a recurring basis is as follows:
Fair value measurements at December 31, 2025 using: | ||||||||||||||||||||||||||
| Description | December 31, 2025 | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||||||
| in millions | ||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Derivative instruments: | ||||||||||||||||||||||||||
| Cross-currency and interest rate derivative contracts | $ | 240.9 | $ | — | $ | 240.9 | $ | — | ||||||||||||||||||
| Foreign currency forward and option contracts | 0.1 | — | 0.1 | — | ||||||||||||||||||||||
| Other | 7.8 | — | 7.8 | — | ||||||||||||||||||||||
| Total derivative instruments | 248.8 | — | 248.8 | — | ||||||||||||||||||||||
| Investments: | ||||||||||||||||||||||||||
SMAs | 76.2 | — | 76.2 | — | ||||||||||||||||||||||
| Other investments | 1,631.5 | 278.1 | 0.1 | 1,353.3 | ||||||||||||||||||||||
| Total investments | 1,707.7 | 278.1 | 76.3 | 1,353.3 | ||||||||||||||||||||||
| Total assets | $ | 1,956.5 | $ | 278.1 | $ | 325.1 | $ | 1,353.3 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Derivative instruments: | ||||||||||||||||||||||||||
| Cross-currency and interest rate derivative contracts | $ | 248.2 | $ | — | $ | 248.2 | $ | — | ||||||||||||||||||
| Foreign currency forward and option contracts | 2.8 | — | 2.8 | — | ||||||||||||||||||||||
| Other | 8.7 | — | 8.7 | — | ||||||||||||||||||||||
| Total liabilities | $ | 259.7 | $ | — | $ | 259.7 | $ | — | ||||||||||||||||||
Fair value measurements at December 31, 2024 using: | ||||||||||||||||||||||||||
| Description | December 31, 2024 | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||||||
| in millions | ||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Derivative instruments: | ||||||||||||||||||||||||||
| Cross-currency and interest rate derivative contracts | $ | 623.2 | $ | — | $ | 623.2 | $ | — | ||||||||||||||||||
| Equity-related derivative instruments | 213.4 | — | — | 213.4 | ||||||||||||||||||||||
| Foreign currency forward and option contracts | 6.5 | — | 6.5 | — | ||||||||||||||||||||||
| Other | 0.8 | — | 0.8 | — | ||||||||||||||||||||||
| Total derivative instruments | 843.9 | — | 630.5 | 213.4 | ||||||||||||||||||||||
| Investments: | ||||||||||||||||||||||||||
SMAs | 433.1 | 127.0 | 306.1 | — | ||||||||||||||||||||||
| Other investments | 2,810.2 | 1,546.3 | 0.1 | 1,263.8 | ||||||||||||||||||||||
| Total investments | 3,243.3 | 1,673.3 | 306.2 | 1,263.8 | ||||||||||||||||||||||
| Total assets | $ | 4,087.2 | $ | 1,673.3 | $ | 936.7 | $ | 1,477.2 | ||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Derivative instruments: | ||||||||||||||||||||||||||
| Cross-currency and interest rate derivative contracts | $ | 183.1 | $ | — | $ | 183.1 | $ | — | ||||||||||||||||||
| Foreign currency forward and option contracts | 3.3 | — | 3.3 | — | ||||||||||||||||||||||
| Total liabilities | $ | 186.4 | $ | — | $ | 186.4 | $ | — | ||||||||||||||||||
A reconciliation of the beginning and ending balances of our assets and liabilities measured at fair value on a recurring basis using significant unobservable, or Level 3, inputs is as follows:
| Investments | Equity-related derivative instruments | Total | |||||||||||||||
| in millions | |||||||||||||||||
Balance of net assets at January 1, 2025 | $ | 1,263.8 | $ | 213.4 | $ | 1,477.2 | |||||||||||
| Losses included in loss from continuing operations (a): | |||||||||||||||||
| — | (49.2) | (49.2) | |||||||||||||||
| Realized and unrealized losses due to changes in fair values of certain investments, net | (111.0) | — | (111.0) | ||||||||||||||
| Additions | 70.5 | — | 70.5 | ||||||||||||||
| Transfers out of Level 3 | — | (173.8) | (173.8) | ||||||||||||||
| Foreign currency translation adjustments and other, net | 130.0 | 9.6 | 139.6 | ||||||||||||||
Balance of net assets at December 31, 2025 (b) | $ | 1,353.3 | $ | — | $ | 1,353.3 | |||||||||||
_______________
(a)Amounts primarily relate to assets and liabilities that we continue to carry on our consolidated balance sheets as of December 31, 2025.
(b)As of December 31, 2025, $354.4 million of our Level 3 investments were accounted for under the measurement alternative at cost less impairment, adjusted for observable price changes.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 14, 2018 | |
| 2016 | Feb 16, 2017 | |
| 2015 | Feb 16, 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.