Fair Value Measurements

The Company applies ASC 820-10, Fair Value Measurements and Disclosures, which defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and expands required disclosures about fair value measurements. The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below:

Level 1-Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2-Financial assets and liabilities whose values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3-Financial assets and liabilities whose values are based on unobservable inputs for the asset or liability.

Financial instruments are defined as cash, or other financial instruments to a third party. The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, investments, accounts payable and accrued liabilities approximate fair value due to their short-term nature. The Company's Credit Facility (as defined in Note 14, Long-Term Debt) approximates fair value because of its floating rate structure.

Derivative financial instruments are recognized as assets or liabilities in the financial statements and measured at fair value on a recurring basis. See Note 11, Derivatives and Hedging, for additional information. The Company measures its interest rate swaps at fair value and recognizes such derivative instruments as either assets or liabilities on the Company’s consolidated balance sheet. Changes in the fair value of swaps are recognized in other comprehensive income, as the Company has designated these swaps as cash flow hedges for accounting purposes. The Company entered into these swaps to manage a portion of its exposure to interest rate movements by converting a portion of its variable rate long-term debt to fixed rate debt.

The following tables present the fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis:



(in thousands)	For the year ended December, 31 2018
Balance sheet location:	Level 1		Level 2		Level 3		Total
Prepaid expenses and other
Interest rate swaps	$	—	$	4,930	$	—	$	4,930
Deferred charges and other assets, net:
Interest rate swaps	—		8,323		—		8,323
Total	$	—	$	13,253	$	—	$	13,253



(in thousands)	For the year ended December, 31 2017
Balance sheet location:	Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Money market funds	$	150	$	—	$	—	$	150
Prepaid expenses and other
Interest rate swaps	—		2,411		—		2,411
Deferred charges and other assets, net:
Interest rate swaps	—		10,776		—		10,776
Total	$	150	$	13,187	$	—	$	13,337

The Company determines the fair value of its security holdings based on pricing from its vendors. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding consensus prices that are corroborated by observable market data or quoted market prices for similar instruments. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs).

The Company has certain non-marketable long-term investments for which it is not practicable to estimate fair value with a total carrying value of $9.0 million and $8.2 million as of December 31, 2018 and 2017, respectively, of which $7.7 million and $6.8 million, respectively, represents the Company’s investment in CoBank. This investment is primarily related to patronage distributions of restricted equity and is a required investment related to the portion of the Credit Facility held by CoBank. This investment is carried under the cost method. See Note 7, Investments, for additional information.