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Fair Value Measurements

9 Months Ended

Sep. 30, 2013

7. FAIR VALUE MEASUREMENTS

Fair value measurements are determined based on the assumptions that a market participant would use in pricing an asset or liability based on a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) observable inputs, such as quoted prices in active markets (Level 1); (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measure. The Company's assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The Company's financial assets and liabilities measured at fair value on a recurring basis were as follows:

(in thousands)			Level 1		Level 2		Total
As of September 30, 2013
Assets
	Money market investments (1)		$	―	$	296,914	$	296,914
	Marketable equity securities (3)			457,969		―		457,969
	Other current investments (4)			16,413		23,281		39,694
		Total Financial Assets	$	474,382	$	320,195	$	794,577

Liabilities
	Deferred compensation plan liabilities (5)		$	―	$	63,685	$	63,685
	7.25% unsecured notes (6)			―		475,144		475,144
	AUD revolving credit borrowing (6)			―		46,589		46,589
	Interest rate swap (7)			―		1,308		1,308
		Total Financial Liabilities	$	―	$	586,726	$	586,726

As of December 31, 2012
Assets
	Money market investments (2)		$	―	$	432,670	$	432,670
	Marketable equity securities (3)			380,087		―		380,087
	Other current investments (4)			14,134		24,717		38,851
		Total Financial Assets	$	394,221	$	457,387	$	851,608

Liabilities
	Deferred compensation plan liabilities (5)		$	―	$	62,297	$	62,297
	7.25% unsecured notes (6)			―		481,424		481,424
	AUD revolving credit borrowing (6)			―		51,915		51,915
	Interest rate swap (7)			―		1,567		1,567
		Total Financial Liabilities	$	―	$	597,203	$	597,203

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(1) The Company's money market investments are included in cash and cash equivalents.

(2) The Company's money market investments are included in cash, cash equivalents and restricted cash.

(3) The Company's investments in marketable equity securities are classified as available-for-sale.

(4) Includes U.S. Government Securities, corporate bonds, mutual funds and time deposits (with original maturities greater than 90 days, but less than one year).

(5) Includes The Washington Post Company Deferred Compensation Plan and supplemental savings plan benefits under The Washington Post Company Supplemental Executive Retirement Plan, which are included in accrued compensation and related benefits.

(6) See Note 6 for carrying amount of these notes and borrowing.

(7) Included in Other liabilities. The Company utilized a market approach model using the notional amount of the interest rate swap multiplied by the observable inputs of time to maturity and market interest rates.

For assets that are measured using quoted prices in active markets, the total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are primarily valued by reference to quoted prices of similar assets or liabilities in active markets, adjusted for any terms specific to that asset or liability.

- 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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