Annual report [Section 13 and 15(d), not S-K Item 405]

Assets and Liabilities Measured at Fair Value

v3.26.1
Assets and Liabilities Measured at Fair Value
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value
(4) 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, 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 measures the fair value of money market funds based on quoted prices in active markets for identical assets. Money market funds are included as cash equivalents Level 1 fair value instruments in the table below. The Company's Level 2 financial liabilities are debt instruments with quoted market prices that are not considered to be traded on "active markets," as defined in GAAP. The fair values for such instruments are derived from a typical model using observable market data as the significant inputs. Accordingly, these financial instruments are reported in the below table as Level 2 fair value instruments.
The Company’s assets and liabilities measured at fair value on a recurring basis were as follows:
December 31, 2025 December 31, 2024
Description Total Quoted prices
in active
markets
for identical
assets
(Level 1)		 Significant
other
observable
inputs
(Level 2)		 Total Quoted prices
in active
markets
for identical
assets
(Level 1)		 Significant
other
observable
inputs
(Level 2)
 amounts in millions
Cash equivalents $ 816  816  —  652  652  — 
Debt $ 52  —  52  282  —  282 
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
amounts in millions
Equity securities $ (5) (22) (22)
Exchangeable senior debentures (35) (38) (33)
Indemnification asset (1) —  —  (5)
Other financial instruments —  —  (1)
$ (40) (60) (61)
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(1)Pursuant to an indemnification agreement Liberty Broadband agreed to indemnify Liberty Interactive LLC (“LI LLC”) for certain payments made to holders of LI LLC’s 1.75% exchangeable senior debentures due 2046 (the “1.75% Exchangeable Senior Debentures”). As of December 31, 2023, all remaining 1.75% Exchangeable Senior Debentures were either retired or exchanged.

The Company has elected to account for its exchangeable debt using the fair value option. Changes in the fair value of the exchangeable senior debentures recognized in the consolidated statement of operations are primarily due to market factors largely 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 earnings (loss). The change in the fair value of the exchangeable senior debentures attributable to changes in the instrument specific credit risk were gains of $270 million, losses of $27 million and gains of $50 million, net of the recognition of previously unrecognized gains and losses, for the years ended December 31, 2025, 2024, and 2023, respectively.
During the fourth quarter of 2025, certain holders of the 4% Exchangeable Senior Debentures, exchanged their debentures for cash in an amount equal to the current market price of the shares underlying their debentures. As a result of the exchange, the Company settled a total of $10 million and $1 million in principal and carrying value, respectively. During the year ended December 31, 2025, the Company recognized $10 million of previously unrecognized gains related to the retirement of a portion of the 4% Exchangeable Senior Debentures, which was recognized through realized and unrealized gains (losses) on financial instruments, net on the consolidated statement of operations. During the year ended December 31, 2023, the Company recognized $60 million of previously unrecognized gains related to the retirement of a portion of the 1.75% Exchangeable Senior Debentures, which was recognized through realized and unrealized gains (losses) on financial instruments, net on the consolidated statement of operations. The cumulative change was a gain of $772 million and $512 million as of December 31, 2025 and December 31, 2024, net of the recognition of previously unrecognized gains and losses, respectively.