Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principle market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the "exit price"). Fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability, including consideration of nonperformance risk.

We assess the inputs used to measure fair value using the three-tier hierarchy promulgated under GAAP. This hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market.


Level 1:	Inputs include quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.


Level 2:	Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets, and observable inputs such as interest rates and yield curves.


Level 3:	Inputs that are significant to the measurement of fair value that are not observable in the market and include management's judgments about assumptions market participants would use in pricing the asset or liability (including assumptions about risk).

Our assessment of goodwill and other intangible assets for impairment includes an assessment using various Level 2 (EBITDA multiples and discount rate) and Level 3 (forecasted cash flows) inputs. See Note 2, "Summary of Significant Accounting Policies - Goodwill and Other Non-Amortizing Intangible Assets," for more information on the application of the use of fair value methodology to measure goodwill and other intangible assets.

Under GAAP, entities are allowed to measure certain financial instruments and other items at fair value. We have not elected the fair value measurement option for any of our assets or liabilities that meet the criteria for this option. Irrespective of the fair value option previously described, GAAP requires certain financial and non-financial assets and liabilities of the Company to be measured on either a recurring basis or on a nonrecurring basis as shown in the sections that follow.

Items Measured at Fair Value on a Recurring Basis



(In millions)	Balance			Level 1		Level 2			Level 3
December 31, 2013
Assets:
Investments	$	91.7		$	91.7	$	—		$	—
Derivative instruments	*			—		*			—
Liabilities:
Derivative instruments	(165.9		)	—		(165.9		)	—

December 31, 2012
Assets:
Investments	$	114.2		$	114.2	$	—		$	—
Derivative instruments	*			—		*			—
Liabilities:
Derivative instruments	(306.4		)	—		(306.4		)	—

____________________


*	Amount rounds to zero

Investments

Investments consist of debt and equity securities with maturity dates of greater than three months from the date of purchase. The majority of these securities are traded in active markets, have readily determinable market values, and use Level 1 inputs. Securities for which there are not active markets or the market values are not readily determinable are valued using Level 2 inputs. All of these investments are included in either prepayments and other current assets or deferred charges and other in our Consolidated Balance Sheets. The following table shows our investments by type.



(In millions)	2013		2012
Equity	$	19.6	$	2.8
Government bonds	72.1		111.4
Total Investments	$	91.7	$	114.2

Gross unrealized gains and losses on marketable securities as of December 31, 2013 and 2012 were not material.

Derivative instruments

The estimated fair values of our derivative instruments are derived from market prices obtained from dealer quotes for similar, but not identical, assets or liabilities. Such quotes represent the estimated amounts we would receive or pay to terminate the contracts. Derivative instruments are included in either deferred charges and other, or deferred credits and other, in our Consolidated Balance Sheets. Our derivatives are recorded at their fair values, adjusted for the credit rating of the counterparty if the derivative is an asset, or adjusted for the credit rating of the Company if the derivative is a liability. See Note 10, "Derivative Instruments," for more information.

Items Measured at Fair Value on a Non-recurring Basis



(In millions)	Balance		Level 1		Level 2		Level 3		Total Adjustments Loss/(Gain)
Intangible and tangible assets	$	311.8	$	—	$	—	$	311.8	$	2,440.1
Assets held for sale, net	11.9		—		—		11.9		25.3
Contingent earnout liability	61.9		—		—		61.9		53.4

Market and income approaches were used to value the intangible and tangible assets. Inputs included an expected range of market values, probabilities estimated by management that each value could be achieved, expected cash flows, recent comparable transactions, discounted cash flows, discount rate, royalty rate, growth rate, and tax rate. See Note 2, "Summary of Significant Accounting Policies."

Assets held for sale, net includes the net assets of the Claridge Hotel Tower in Atlantic City. The contingent earnout liability relates to CIE acquisitions. See Note 4, "Acquisitions, Dispositions, and Divestitures."