Fair Value Measurements |
6 Months Ended |
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Jun. 30, 2025 | |
| Fair Value Disclosures [Abstract] | |
| Fair Value Measurements | Fair Value Measurements General U.S. 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. Recurring Fair Value Measurements Derivatives In order to manage our interest rate and foreign currency exchange risk, we have entered into various derivative instruments, as further described in note 6. We use the fair value method to account for most of our derivative instruments. The recurring fair value measurements of these derivative 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 derivative instruments. This observable data mostly includes 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 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. 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 changes in our or our counterparties’ credit spreads 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 interest rate derivative contracts are further explained in note 6. Non-recurring Fair Value Measurements Fair value measurements may also be used for purposes of non-recurring valuations performed in connection with our acquisition accounting and impairment assessments. During the three and six months ended June 30, 2025, we performed non-recurring valuations in connection with certain impairment assessments at Liberty Puerto Rico, as further discussed below. During the three and six months ended June 30, 2025 and 2024, we did not perform any non-recurring valuations in connection with acquisition accounting. Spectrum License Intangible Assets During the second quarter of 2025, and in response to the cumulative impact of challenges stemming from the migration of customers acquired from AT&T to Liberty Puerto Rico’s mobile network and other various network challenges that impacted these mobile customers, including a slower than expected recovery, we concluded that a trigger event occurred requiring an assessment of the fair value of our spectrum license intangible asset at Liberty Puerto Rico. We used a market approach for purposes of the quantitative impairment assessment to value our owned spectrum license intangible assets at Liberty Puerto Rico using a range of values established largely through industry benchmarks, FCC auction data, and precedent transactions. Based on this valuation, the fair value of the owned spectrum assets at Liberty Puerto Rico was less than the respective carrying value, and as a result, we recorded an impairment loss of $494 million during the second quarter of 2025. The impairment is reflected in impairment, restructuring and other operating items, net, in the condensed consolidated statements of operations, the carrying value of which was $777 million after the impairment loss. The impairment loss was driven by the lower fair value, primarily attributed to a result of challenges related to the operationalization of this spectrum. See note 7 for additional information associated with our impairment charges and our intangible assets.
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