Fair value measurement

We measure and record certain assets and liabilities at fair value in the accompanying consolidated financial statements. U.S. GAAP establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on 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 financial instruments measured at fair value in the accompanying Consolidated Balance Sheets consist of the following:



Company Owned Assets
In thousands of dollars
Fair value measurement as of Dec. 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Deferred compensation investments	$	28,558	$	—	$	—	$	28,558
Available for sale investment	16,744		—		—		16,744
Total	$	45,302	$	—	$	—	$	45,302
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							$	69,017



In thousands of dollars
Fair value measurement as of Dec. 31, 2015
	Level 1		Level 2		Level 3		Total
Assets:
Deferred compensation investments	$	27,770	$	—	$	—	$	27,770
Available for sale investment	28,090		—		—		28,090
Total	$	55,860	$	—	$	—	$	55,860
Deferred compensation investments valued using net asset value as a practical expedient:
Interest in registered investment companies							$	36,114
Fixed income fund							13,315
Total investments at fair value							$	105,289

Deferred compensation investments as of December 31, 2016 and 2015 were $28.6 million and $27.8 million, respectively. These investments consist of mutual funds which have publicly quoted prices and are therefore classified as Level 1 assets. The available for sale investment is our investment in Gannett, which has been classified as a Level 1 asset as the shares are listed on the New York Stock Exchange. Interest in registered investment companies are valued using the net asset values as quoted through publicly available pricing sources and investments are redeemable on request. 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. The fixed income fund is 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 December 31, 2016. 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 long-term debt, determined based on the bid and ask quotes for the related debt (Level 2), totaled $4.19 billion at December 31, 2016 and $4.31 billion at December 31, 2015.

In 2016, 2015 and 2014, we recorded non-cash goodwill impairment charges of $15.2 million, $8.0 million and $30.3 million in connection with our interim and annual goodwill impairment test. The fair value determination of goodwill was determined using a combination of an income approach (DCF valuation analysis) and market-based approach (guideline public company analysis) and was classified as a Level 3 fair value measurement due to the significance of the unobservable inputs used. See Note 1 and 12 for further information on the non-cash goodwill impairment charges and our valuation methodologies.



Pension Plan Assets
In thousands of dollars
Fair value measurement as of Dec. 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Cash and other	$	2,206	$	—	$	—	$	2,206
Corporate stock	60,730		—		—		60,730
Total	$	62,936	$	—	$	—	$	62,936
Pension plan investments valued using net asset value as a practical expedient:
Common collective trust - equities							$	167,647
Common collective trust - fixed income							127,043
Hedge funds							14,754
Partnership/joint venture interests							8,985
Interest in registered investment companies							6,803
Total fair value of plan assets							$	388,168



In thousands of dollars
Fair value measurement as of Dec. 31, 2015
	Level 1		Level 2		Level 3		Total
Assets:
Cash and other	$	1,098	$	—	$	—	$	1,098
Corporate stock	58,291		—		—		58,291
Corporate bonds	—		99		—		99
Total	$	59,389	$	99	$	—	$	59,488
Pension plan investments valued using net asset value as a practical expedient:
Common collective trust - equities							$	172,046
Common collective trust - fixed income							135,914
Hedge funds							14,290
Partnership/joint venture interests							11,796
Interest in registered investment companies							6,659
Total fair value of plan assets							$	400,193

Valuation methodologies used for assets and liabilities measured at fair value are as follows:

Corporate stock classified as Level 1 is valued primarily at the closing price reported on the active market on which the individual securities are traded.

The investments in Level 2 are corporate bonds which are valued based on institutional bid evaluations using proprietary models, using discounted cash flow models or models that derive prices based on similar securities.

Interest in common/collective trusts are valued using the net asset value as provided monthly by the investment manager or fund company.

Ten of the investments in collective trusts are fixed income funds, whose strategy is to use individual subfunds to efficiently add a representative sample of securities in individual market sectors to the portfolio. The remaining eleven investments in collective trusts held by the Plan are invested in equity funds. The strategy of these funds is to generate returns predominantly from developed equity markets. These funds are generally redeemable with a short-term written or verbal notice. There are no unfunded commitments related to these types of funds.

Interest in registered investment companies is valued using the published net asset values as quoted through publicly available pricing sources. The investment strategy of this company is to generate returns from government issued debt securities. These investments are redeemable on request.

Investments in partnerships are valued at the net asset value of our investment in the fund as reported by the fund managers. The Plan holds investments in two partnerships. One partnership’s strategy is to generate returns through real estate-related investments. Certain distributions are received from this fund as the underlying assets are liquidated. The other partnership’s strategy is to generate returns through investment in developing equity markets. This fund is redeemable with a 30-day notice, subject to a 0.55% charge. Future funding commitments to our partnership investments totaled $0.8 million as of December 31, 2016 and $1.0 million as of December 31, 2015.

As of December 31, 2016, pension plan assets include one hedge fund which is a fund of hedge funds whose objective is to produce a return that is uncorrelated with market movements. Investments in hedge funds are valued at the net asset value as reported by the fund managers. Shares in the hedge fund are generally redeemable twice a year or on the last business day of each quarter with at least 95 days written notice subject to a potential 5% holdback. There are no unfunded commitments related to the hedge funds.

We review audited financial statements and additional investor information to evaluate fair value estimates from our investment managers or fund administrator.

Our policy is to recognize transfers between levels at the beginning of the reporting period. There were no transfers between levels during the period.