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.

As of December 31, 2017, our deferred compensation investments are valued using Level 1 and had a fair value of $14.6 million. Our deferred compensation assets were invested in a fixed income mutual fund.

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



Fair value measurement as of Dec. 31, 2016 (recast)
	Level 1		Level 2		Level 3		Total
Available for sale investment	$	16,744	$	—	$	—	$	16,744
Fixed income mutual fund	13,575		—		—		13,575
Total	$	30,319	$	—	$	—	$	30,319

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 Other non-operating expenses line item in the Consolidated Statement of Income, and in the third quarter of 2017 we sold the investment in its entirety.

Fixed income mutual 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 December 31, 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 long-term debt, determined based on the bid and ask quotes for the related debt (Level 2), totaled $3.16 billion at December 31, 2017 and $4.19 billion at December 31, 2016.

In the second quarter of 2017, we recorded a non-cash impairment charge of $332.9 million related to our former CareerBuilder reporting unit. This impairment charge is recorded within the income (loss) from discontinued operations line item within the Consolidated Statements of Income. In 2016 and 2015, we recorded non-cash goodwill impairment charges of $15.2 million and $8.0 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 (discounted cash flow 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 13 for further information on the non-cash goodwill impairment charges and our valuation methodologies.

During the second half 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 in 2017, we recognized $11.1 million in non-cash charges, writing off destroyed equipment and recording an impairment on the building (fair value of the building was determined using a market based valuation). In addition, we incurred $15.8 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 insurance proceeds of $26.0 million ($5.0 million was received in the third quarter and $21.0 million was received in the fourth quarter). The net expense impact from the hurricane of $0.9 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 4).

The below fair value tables relate to our TRP pension plan assets (in thousands):



Pension Plan Assets
Fair value measurement as of Dec. 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Cash and other	$	935	$	—	$	—	$	935
Corporate stock	82,698		—		—		82,698
Interest in registered investment companies	45,186		—		—		45,186
Total	$	128,819	$	—	$	—	$	128,819
Pension plan investments valued using net asset value as a practical expedient:
Common collective trust - equities							$	117,778
Common collective trust - fixed income							170,977
Hedge funds							15,756
Partnership/joint venture interests							5,819
Total fair value of plan assets							$	439,149



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
Interest in registered investment companies	6,803		—		—		$	6,803
Total	$	69,739	$	—	$	—	$	69,739
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
Total fair value of plan assets							$	388,168

Valuation methodologies used for TRP pension 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.

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.

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

Nine 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 three 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.

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 $0.7 million as of December 31, 2017 and $0.8 million as of December 31, 2016.

As of December 31, 2017, 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.