Fair Value Measurement

9 Months Ended

Sep. 30, 2017

We measure and record in the accompanying condensed consolidated financial statements certain assets and liabilities at fair value. U.S. GAAP establishes a hierarchy for those instruments measured at fair value that distinguishes between market data (observable inputs) and our own assumptions (unobservable inputs). The hierarchy consists of three levels:

Level 1 - Quoted market prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable; and

Level 3 - Unobservable inputs developed using our own estimates and assumptions, which reflect those that a market participant would use.

The following table summarizes our assets and liabilities measured at fair value in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2017, and December 31, 2016 (in thousands):



	Fair Value Measurements as of Sept. 30, 2017
	Level 1		Level 2		Level 3		Total

Available for sale investment	—		—		—		—
Total	$	—	$	—	$	—	$	—

Deferred compensation investments valued using net asset value as a practical expedient:
Interest in registered investment companies							$	14,921
Fixed income fund							13,672
Total investments at fair value							$	28,593



	Fair Value Measurements as of Dec. 31, 2016 (recast)
	Level 1		Level 2		Level 3		Total

Available for sale investment	16,744		—		—		16,744
Total	$	16,744	$	—	$	—	$	16,744

Deferred compensation investments valued using net asset value as a practical expedient:
Interest in registered investment companies							$	10,140
Fixed income fund							13,575
Total investments at fair value							$	40,459

Available for sale investment: Our investment previously consisted of shares of common stock of Gannett Co., Inc., which had been classified as a Level 1 asset as the shares are listed on the New York Stock Exchange. During the second quarter of 2017 we recorded an OTTI loss in the non-operating items line item of the Consolidated Statement of Income, and in the third quarter of 2017 we sold the investment in its entirety.

Interest in registered investment companies: These investments include one fund which invests in intermediate-term investment grade bonds and a fund which invests in equities listed predominantly on European and Asian exchanges. Funds are valued using the net asset values as quoted through publicly available pricing sources and investments are redeemable on request.

Fixed income fund investment: Valued using the net asset value provided monthly by the fund company and shares are generally redeemable on request. There are no unfunded commitments to these investments as of September 30, 2017.

In addition to the financial instruments listed in the table above, we hold other financial instruments, including cash and cash equivalents, receivables, accounts payable and debt. The carrying amounts for cash and cash equivalents, receivables and accounts payable approximated their fair values. The fair value of our total debt, based on the bid and ask quotes for the related debt (Level 2), totaled $3.49 billion at September 30, 2017, and $4.19 billion at December 31, 2016.

The sale of the majority of our ownership in CareerBuilder resulted in a $342.9 million pre-tax loss recorded within discontinued operations (see Note 12). The loss includes a goodwill impairment charge of $332.9 million. The valuation used in the Step 1 goodwill impairment test was based on the enterprise value determined in the purchase agreement (which represents a Level 3 input in the fair value hierarchy).

During the third quarter of 2017, a few of our television stations were impacted by hurricanes Harvey and Irma. In particular, Hurricane Harvey caused major damage to our Houston television station (KHOU), and as a result, we recognized $10.2 million in non-cash charges, writing off destroyed equipment and recording an impairment to the value of the building (fair value of the building was determined using a market based valuation). In addition, we incurred $8.4 million in cash expenses related to repairing the studio and office and providing for additional staffing and operational needs to keep the station operating during and immediately following these weather emergencies. Partially offsetting these expenses, we received initial insurance proceeds of $11.0 million ($5.0 million was received as of September 30, 2017 and $6.0 million was received in October 2017). The net expense impact from the hurricane of $7.6 million has been recorded in asset impairment and facility consolidation charges on our Consolidated Statements of Income.

We also recorded a non-cash impairment charge of $5.8 million in the second quarter of 2017 associated with the write-off of a note receivable from one of our equity method investments (see Note 3).

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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