Fair Value Measurement

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurement

6. Fair Value Measurement

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified in one of three categories described below.

· Level 1 — Quoted prices in active markets for identical assets or liabilities.

· Level 2 — Inputs, other than quoted market prices in active markets, that are observable either directly or indirectly. Quoted prices for similar instruments in active markets or model driven valuations in which all significant inputs and significant value drivers are observable in active markets.

· Level 3 — Valuations derived from valuations techniques in which one or more significant inputs or significant value drivers are unobservable.

There have been no transfers of assets or liabilities between the fair value measurement classifications during the six months ended June 30, 2016 and June 30, 2015.

Recurring Measurements

	As of June 30, 2016
(in thousands)	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	5,412	$	5,412	$	-	$	-
Derivative asset		632		-	$	632		-
Total assets measured at fair value on a recurring basis	$	6,044	$	5,412	$	632	$	-
Temporary equity - Redeemable non-controlling interests	$	-	$	-	$	-	$	-

	As of December 31, 2015
(in thousands)	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	80,944	$	80,944	$	-	$	-
Derivative asset		615		-		615		-
Total assets measured at fair value on a recurring basis	$	81,559	$	80,944	$	615	$	-
Temporary equity - Redeemable non-controlling interests	$	99,000	$	-	$	-	$	99,000

Derivatives include free-standing foreign currency forward contracts which are marked to market at each reporting period. We classify our foreign currency forward contracts as Level 2, as the valuation inputs are based on quoted prices and market observable data of similar instruments.

At December 31, 2015, we determined the fair value of our redeemable non-controlling interest in Travel Channel using a combination of a discounted cash flow valuation model and a market approach that applies revenues and EBITDA estimates against the calculated multiples of comparable companies. Operating revenues and EBITDA are key assumptions utilized in both the discounted cash flow valuation model and the market approach. The selected discount rate of approximately 10.5 percent is also a key assumption in our discounted cash flow valuation model. On February 25, 2016, we agreed to pay the non-controlling interest owner $99.0 million to acquire the remaining 35.0 percent interest in Travel Channel, resulting in our 100.0 percent ownership (see Note 14 – Redeemable Non-controlling Interest and Non-controlling Interest).

The following table summarizes the activity for account balances whose fair value measurements are estimated utilizing Level 3 inputs:

Redeemable Non-controlling Interests
	As of
(in thousands)	June 30, 2016			December 31, 2015
Beginning period balance	$	99,000		$	96,251
Net income (loss)		2,162			(2,760	)
Fair value adjustments		(2,162	)		17,794
Dividends paid to non-controlling interests		-			(12,985	)
Additions to non-controlling interests		-			700
Purchase of non-controlling interest		(99,000	)		-
Ending period balance	$	-		$	99,000

The net income amounts reflected in the table above are reported within net income attributable to non-controlling interests in our condensed consolidated statements of operations.

Other Financial Instruments

The carrying values of our financial instruments do not materially differ from their estimated fair values as of June 30, 2016 and December 31, 2015 except for debt, which is disclosed in Note 10 - Debt.

Non-Recurring Measurements

The majority of the Company’s non-financial instruments, which include goodwill, other intangible assets and property and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur, or at least annually for goodwill, such that a non-financial instrument is required to be evaluated for impairment, a resulting asset impairment would require that the non-financial instrument be recorded at the lower of cost or fair value.