Liberty Broadband Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements and Derivative Instrument (Tables)

Fair Value Measurements and Derivative Instrument (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Assets and Liabilities Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 are as follows (amounts in thousands):



December 31, 2017	Level 1 ⁽¹⁾		Level 2 ⁽²⁾	Level 3 ⁽³⁾	Total
Assets:
Deferred compensation plan assets (mutual funds)	$	1,323	—	—	1,323
Liabilities:
Derivative stock appreciation rights	$	—	—	78,330	78,330

December 31, 2016	Level 1 ⁽¹⁾		Level 2 ⁽²⁾	Level 3 ⁽³⁾	Total
Assets:
Deferred compensation plan assets (mutual funds)	$	1,477	—	—	1,477
Liabilities:
Derivative stock appreciation rights	$	—	—	29,700	29,700

⁽¹⁾ Quoted prices in active markets for identical assets or liabilities
⁽²⁾ Observable inputs other than quoted prices in active markets for identical assets and liabilities
⁽³⁾ Inputs that are generally unobservable and not corroborated by market data

Fair Value, by Balance Sheet Grouping

The carrying amounts and approximate fair values of our current and long-term debt, excluding capital leases at December 31, 2017 and 2016 are as follows (amounts in thousands):



	December 31, 2017			December 31, 2016
	Carrying Amount		Fair Value	Carrying Amount	Fair Value
Current and long-term debt	$	1,382,048	1,458,106	1,336,772	1,393,865

Significant Assumptions and Inputs on Stock Appreciation Right Liability

The following table shows our significant assumptions and inputs used in the lattice-based valuation model to value the stock appreciation right liability at December 31, 2017 and 2016:



	2017		2016
Contractual term (in years)	1.1 - 5.1		2.1 - 6.1
Volatility	25% to 37.5%		37.5		%
Risk-free interest rate	1.3 to 2.2%		2.1		%
Stock Price	$	39.02	$	19.45

Changes in Fair Value of Financial Instruments on Recurring Basis

The following table summarizes the changes in fair value of all financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2017, 2016, and 2015:



Fair Value Measurement Using Level 3 Inputs
	Derivative Stock Appreciation Rights
Balance at January 1, 2015	$	—
Issuance	21,660
Fair value adjustment at end of period, included in Other Income (Expense)	11,160
Balance at December 31, 2015	$	32,820
Fair value adjustment at end of period, included in Other Income (Expense)	(3,120		)
Balance at December 31, 2016	$	29,700
Fair value adjustment at end of period, included in Other Income (Expense)	48,630
Balance at December 31, 2017	$	78,330