NOTE 6 – Fair Value Measurements

We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents, trading securities owned, available-for-sale securities, investments, trading securities sold, but not yet purchased, securities sold, but not yet purchased, and derivatives.

We generally utilize third-party pricing services to value Level 1 and Level 2 available-for-sale investment securities, as well as certain derivatives designated as cash flow hedges. We review the methodologies and assumptions used by the third-party pricing services and evaluate the values provided, principally by comparison with other available market quotes for similar instruments and/or analysis based on internal models using available third-party market data. We may occasionally adjust certain values provided by the third-party pricing service when we believe, as the result of our review, that the adjusted price most appropriately reflects the fair value of the particular security.

The following is a description of the valuation techniques and key inputs used to measure fair value on a recurring basis:

Cash Equivalents

Cash equivalents include highly liquid investments with original maturities of three months or less. Due to their short-term nature, the carrying amount of these instruments approximates the estimated fair value. Actively traded money market funds are measured at their net asset value, which approximates fair value. As such, we classify the estimated fair value of these instruments as Level 1.

Financial Instruments Owned and Available-For-Sale Securities

When available, the fair value of financial instruments are based on quoted prices in active markets and reported in Level 1. Level 1 financial instruments include highly liquid instruments with quoted prices, such as equity securities listed in active markets, corporate fixed income securities, and U.S. government securities.

If quoted prices are not available, fair values are obtained from pricing services, broker quotes, or other model-based valuation techniques with observable inputs, such as the present value of estimated cash flows, and reported as Level 2. The nature of these financial instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 2 financial instruments include U.S. government agency securities, mortgage-backed securities, corporate fixed income securities infrequently traded, state and municipal securities, asset-backed securities, and equity securities not actively traded.

We have identified Level 3 financial instruments to include certain corporate fixed income securities with unobservable pricing inputs, and certain state and municipal securities, which include auction rate securities (“ARS”). Level 3 financial instruments have little to no pricing observability as of the report date. These financial instruments do not have active two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. ARS are valued based upon our expectations of issuer redemptions and using internal discounted cash flow models that utilize unobservable inputs.

Investments

Investments in certain equity securities and mutual funds are valued based on quoted prices (unadjusted) in active markets and reported in Level 1. Investments in certain private equity securities and partnerships with unobservable inputs and ARS for which the market has been dislocated and largely ceased to function are reported as Level 3 assets. Investments in certain equity securities with unobservable inputs are valued using management’s best estimate of fair value, where the inputs require significant management judgment. ARS are valued based upon our expectations of issuer redemptions and are evaluated using internal models.

Investments in partnerships and other investments include our general and limited partnership interests in investment partnerships and direct investments in non-public companies. The net assets of investment partnerships consist primarily of investments in non-marketable securities. The value of these investments is at risk to changes in equity markets, general economic conditions, and a variety of other factors. We estimate fair value for private equity investments based on our percentage ownership in the net asset value of the entire fund, as reported by the fund or on behalf of the fund, after indication that the fund adheres to applicable fair value measurement guidance.

The valuation of these investments requires significant management judgment due to the absence of quoted market prices, inherent lack of liquidity, and long-term nature of these assets. As a result, these values cannot be determined with precision and the calculated fair value estimates may not be realizable in a current sale or immediate settlement of the instrument.

For those funds where the net asset value is not reported by the fund, we derive the fair value of the fund by estimating the fair value of each underlying investment in the fund. In addition to using qualitative information about each underlying investment, as provided by the fund, we give consideration to information pertinent to the specific nature of the debt or equity investment, such as relevant market conditions, offering prices, operating results, financial conditions, exit strategy, and other qualitative information, as available. The lack of an independent source to validate fair value estimates, including the impact of future capital calls and transfer restrictions, is an inherent limitation in the valuation process. Commitments to fund additional investments in nonmarketable equity securities recorded at fair value were $12.4 million and $3.0 million at December 31, 2013 and 2012, respectively.

Financial Instruments Sold, But Not Yet Purchased

Financial instruments sold, but not purchased, recorded at fair value based on quoted prices in active markets and other observable market data include highly liquid instruments with quoted prices, such as U.S. government securities, corporate fixed income securities, and equity securities listed in active markets, which are reported as Level 1.

If quoted prices are not available, fair values are obtained from pricing services, broker quotes, or other model-based valuation techniques with observable inputs, such as the present value of estimated cash flows, and reported as Level 2. The nature of these financial instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 2 financial instruments include U.S. government agency securities, certain equity securities not actively traded, certain corporate fixed income securities, and statement and municipal securities.

Derivatives

Derivatives are valued using quoted market prices when available or pricing models based on the net present value of estimated future cash flows. The valuation models used require market observable inputs, including contractual terms, market prices, yield curves, credit curves, and measures of volatility. We manage credit risk for our derivative positions on a counterparty-by-counterparty basis and calculate credit valuation adjustments, included in the fair value of these instruments, on the basis of our relationships at the counterparty portfolio/master netting agreement level. These credit valuation adjustments are determined by applying a credit spread for the counterparty to the total expected exposure of the derivative after considering collateral and other master netting arrangements. We have classified our interest rate swaps as Level 2.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 2012 are presented below:


	December 31, 2013
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	78,163	$	78,163	$	-	$	-
Financial instruments owned:
U.S. government agency securities		88,930		-		88,930		-
U.S. government securities		10,594		10,594		-		-
Corporate securities:
Fixed income securities		483,987		23,413		458,535		2,039
Equity securities		76,709		76,462		6		241
State and municipal securities		141,274		-		141,274		-
Total financial instruments owned		801,494		110,469		688,745		2,280
Available-for-sale securities:
U.S. government agency securities		1,072		-		1,072		-
State and municipal securities		90,677		-		84,477		6,200
Mortgage-backed securities:
Agency		183,987		-		183,987		-
Commercial		211,246		-		211,246		-
Non-agency		4,619		-		4,619		-
Corporate fixed income securities		498,316		83,655		414,661		-
Asset-backed securities		766,336		-		708,258		58,078
Total available-for-sale securities		1,756,253		83,655		1,608,320		64,278
Investments:
Corporate equity securities		32,402		32,402		-		-
Corporate preferred securities		-		-		-		-
Mutual funds		16,994		16,994		-		-
U.S. government securities		-		-		-		-
Auction rate securities:
Equity securities		56,693		-		-		56,693
Municipal securities		10,939		-		-		10,939
Other (1)		100,200		10		2,422		97,768
Total investments		217,228		49,406		2,422		165,400
	$	2,853,138	$	321,693	$	2,299,487	$	231,958

Liabilities:
Financial instruments sold, but not yet purchased
U.S. government securities	$	253,221	$	253,221	$	-	$	-
U.S. government agency securities		2,068		-		2,068		-
Corporate securities:
Fixed income securities		135,878		17,857		118,021		-
Equity securities		90,015		86,933		3,082		-
State and municipal securities		32		-		32		-
Total financial instruments sold, but not yet purchased		481,214		358,011		123,203		-
Securities sold, but not yet purchased		-		-		-		-
Derivative contracts (2)		9,349		-		9,349		-
	$	490,563	$	358,011	$	132,552	$	-

(1) Includes $56.0 million of partnership interests, $22.5 million of private company investments, and $21.7 million of private equity and other investments.
(2) Included in accounts payable and accrued expenses in the consolidated statements of financial condition.


	December 31, 2012
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	72,596	$	72,596	$	-	$	-
Financial instruments owned:
U.S. government agency securities		123,758		-		123,758		-
U.S. government securities		3,573		3,573		-		-
Corporate securities:
Fixed income securities		396,878		66,795		329,500		583
Equity securities		35,472		33,650		1,822		-
State and municipal securities		203,927		-		203,927		-
Total financial instruments owned		763,608		104,018		659,007		583
Available-for-sale securities:
U.S. government agency securities		1,113		-		1,113		-
State and municipal securities		157,420		-		66,933		90,487
Mortgage-backed securities:
Agency		684,848		-		684,848		-
Commercial		260,974		-		260,974		-
Non-agency		13,878		-		13,878		-
Corporate fixed income securities		480,182		263,017		217,165		-
Asset-backed securities		26,753		-		26,753		-
Total available-for-sale securities		1,625,168		263,017		1,271,664		90,487
Investments:
Corporate equity securities		32,162		32,162		-		-
Corporate preferred securities		56,970		-		56,970
Mutual funds		18,021		18,021		-		-
U.S. government securities		7,069		7,069		-		-
Auction rate securities:
Equity securities		64,397		-		-		64,397
Municipal securities		14,067		-		-		14,067
Other (1)		43,748		1,620		4,831		37,297
Total investments		236,434		58,872		61,801		115,761
	$	2,697,806	$	498,503	$	1,992,472	$	206,831

Liabilities:
Financial instruments sold, but not yet purchased
U.S. government securities	$	162,661	$	162,661	$	-	$	-
U.S. government agency securities		15		-		15		-
Corporate securities:
Fixed income securities		150,698		46,274		104,424		-
Equity securities		29,247		28,902		345		-
State and municipal securities		87		-		87		-
Total financial instruments sold, but not yet purchased		342,708		237,837		104,871		-
Securities sold, but not yet purchased		-		-		-		-
Derivative contracts (2)		19,934		-		19,934		-
	$	362,642	$	237,837	$	124,805	$	-

(1) Includes $21.5 million of partnership interests, $13.5 million of private equity investments, and $8.7 million of private company and other investments.
(2) Included in accounts payable and accrued expenses in the consolidated statements of financial condition.

The following table summarizes the changes in fair value carrying values associated with Level 3 financial instruments during the years ended December 31, 2013 and 2012 (in thousands):


	Year ended December 31, 2013
	Financial instruments Owned				Available-for-sale securities				Investments
	Corporate Fixed Income Securities		Equity Securities		State & Municipal Securities		Asset-Backed Securities		Auction Rate Securities - Equity		Auction Rate Securities - Municipal		Other (1)

Balance at December 31, 2012	$	583	$	-	$	90,487	$	-	$	64,397	$	14,067	$	37,297
Unrealized gains/(losses):
Included in changes in net assets (2)		779		1,333		-		(233)		571		75		6,328
Included in OCI (3)		-		-		(1,822)		-		-		-		-
Realized gains/(losses) (2)		281		-		2,053		-		-		-		13
Purchases		10,261		11,717		5,000		-		75		-		50,914
Sales		(6,888)		(208)		-		-		-		-		(6,801)
Redemptions		(1,349)		-		(32,000)		-		(8,350)		(3,203)		(2,584)
Transfers:
Into Level 3		139		-		6,201		58,311		-		-		12,601
Out of Level 3		(1,767)		(12,601)		(63,719)		-		-		-		-
Net change		1,456		241		(84,287)		58,078		(7,704)		(3,128)		60,471
Balance at December 31, 2013	$	2,039	$	241		6,200	$	58,078	$	56,693	$	10,939	$	97,768

(1) Includes partnership interests, private company investments, and private equity investments.

(2) Realized and unrealized gains/(losses) related to trading securities and investments are reported in other income in the consolidated statements of operations.

(3) Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive loss in the consolidated statements of financial condition.


	Year ended December 31, 2012
			Available-for-sale securities				Investments
	Corporate Fixed Income Securities (1)		State & Municipal Securities		Corporate Fixed Income Securities		Auction Rate Securities - Equity		Auction Rate Securities - Municipal		Other(2)

Balance at December 31, 2011	$	3,742	$	66,896	$	12,000	$	103,176	$	11,729	$	37,033
Unrealized gains/(losses):
Included in changes in net assets (3)		42		-		-		21		(207)		2,290
Included in OCI (4)		-		(1,779)		-		-		-		-
Realized gains/(losses) (3)		282		230		-		-		-		2,267
Purchases		27,337		47,840		-		3,400		6,750		1,672
Sales		(25,663)		-		-		-		-		(5,965)
Redemptions		(443)		(22,700)		(12,000)		(42,200)		(4,205)		-
Transfers:
Into Level 3		2,687		-		-		-		-		-
Out of Level 3		(7,401)		-		-		-		-		-
Net change		(3,159)		23,591		(12,000)		(38,779)		2,338		264
Balance at December 31, 2012	$	583	$	90,487	$	-	$	64,397	$	14,067	$	37,297

(1) Included in financial instruments owned in the consolidated statement of financial condition.

(2) Includes partnership interests, private company investments, and private equity investments.

(3) Realized and unrealized gains/(losses) related to trading securities and investments are reported in other income in the consolidated statements of operations.

(4) Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive loss in the consolidated statements of financial condition.

The results included in the table above are only a component of the overall investment strategies of our company. The table above does not present Level 1 or Level 2 valued assets or liabilities. The changes to our company’s Level 3 classified instruments were principally a result of: unrealized gains and losses, and redemptions of ARS at par during the year ended December 31, 2013.

During the year ended December 31, 2013, financial instruments owned and investments acquired as part of the KBW merger that are classified as Level 3 totaled $54.1 million. The changes in unrealized gains/(losses) recorded in earnings for the year ended December 31, 2013, relating to Level 3 assets still held at December 31, 2013, were immaterial.

The following table summarizes quantitative information related to the significant unobservable inputs utilized in our company’s Level 3 recurring fair value measurements as of December 31, 2013.



	Valuation technique	Unobservable input	Range	Weighted average
Available-for-sale securities:
Asset-backed securities	Discounted cash flow	Discount rate	5.7% - 11.1%	7.7%
		Workout period	1 - 4 years	3.4 years

Investments:
Auction rate securities
Equity securities	Discounted cash flow	Discount rate	2.9% - 12.7%	7.2%
		Workout period	1 - 3 years	2.4 years

Municipal securities	Discounted cash flow	Discount rate	0.1% - 10.8%	6.5%
		Workout period	1 -4 years	2.6 years

Other
Investments in partnerships	Market approach	Revenue multiple	1.7-4.0	2.6
		EBITDA multiple	4.5-9.9	7.7

Private equity investments	Market approach	Revenue multiple	0.5-3.0	1.8
		EBITDA multiple	4.3-11.3	7.8

The fair value of certain Level 3 assets was determined using various methodologies as appropriate, including NAVs of underlying investments, third-party pricing vendors, broker quotes and market and income approaches. These inputs are evaluated for reasonableness through various procedures, including due diligence reviews of third-party pricing vendors, variance analyses, consideration of current market environment, and other analytical procedures.

The fair value for our auction-rate securities was determined using an income approach based on an internally developed discounted cash flow model. The discounted cash flow model utilizes two significant unobservable inputs: discount rate and workout period. The discount rate was calculated using credit spreads of the underlying collateral or similar securities. The workout period was based on an assessment of publicly available information on efforts to re-establish functioning markets for these securities and our company’s own redemption experience. Significant increases in any of these inputs in isolation would result in a significantly lower fair value. On an ongoing basis, management verifies the fair value by reviewing the appropriateness of the discounted cash flow model and its significant inputs.

General and limited partnership interests in investment partnerships totaled $56.0 million and $21.5 million at December 31, 2013 and 2012, respectively. The general and limited partnership interests in investment partnerships were primarily valued based upon NAVs received from third-party fund managers. The various partnerships are investment companies, which record their underlying investments at fair value based on fair value policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the funds to utilize pricing/valuation information, including independent appraisals, from third-party sources. However, in some instances, current valuation information for illiquid securities or securities in markets that are not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that may be used as an input to value these investments.

Direct investments in private equity companies totaled $8.2 million and $13.5 million at December 31, 2013 and 2012, respectively. Direct investments in private equity companies may be valued using the market approach or the income approach, or a combination thereof, and were valued based on an assessment of each underlying investment, incorporating evaluation of additional significant third-party financing, changes in valuations of comparable peer companies, the business environment of the companies, market indices, assumptions relating to appropriate risk adjustments for nonperformance and legal restrictions on disposition, among other factors. The fair value derived from the methods used are evaluated and weighted, as appropriate, considering the reasonableness of the range of values indicated. Under the market approach, fair value may be determined by reference to multiples of market-comparable companies or transactions, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. Under the income approach, fair value may be determined by discounting the cash flows to a single present amount using current market expectations about those future amounts. Unobservable inputs used in a discounted cash flow model may include projections of operating performance generally covering a five-year period and a terminal value of the private equity direct investment. For securities utilizing the discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, risk premium or discount for lack of marketability in isolation could result in a significantly lower (higher) fair value measurement. For securities utilizing the market comparable companies valuation technique, a significant increase (decrease) in the EBITDA multiple in isolation could result in a significantly higher (lower) fair value measurement.

Transfers Within the Fair Value Hierarchy

We assess our financial instruments on a quarterly basis to determine the appropriate classification within the fair value hierarchy. Transfers between fair value classifications occur when there are changes in pricing observability levels. Transfers of financial instruments among the levels are deemed to occur at the beginning of the reporting period. There were $81.2 million of transfers of financial assets from Level 2 to Level 1 during the year ended December 31, 2013, primarily related to tax-exempt securities for which market trades were observed that provided transparency into the valuation of these assets. There were $35.8 million of transfers of financial assets from Level 1 to Level 2 during the year ended December 31, 2013, primarily related to tax-exempt securities for which there were low volumes of recent trade activity observed. There were $7.2 million of transfers of financial assets from Level 3 to Level 2 during the year ended December 31, 2013, related to equity and corporate fixed income securities and state and municipal securities for which market trades were observed that provided transparency into the valuation of these assets. There were $0.1 million of transfers of financial assets into Level 3 during the year ended December 31, 2013.

Fair Value of Financial Instruments

The following reflects the fair value of financial instruments, as of December 31, 2013 and 2012, whether or not recognized in the consolidated statements of financial condition at fair value (in thousands).


	December 31, 2013				December 31, 2012
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
Financial assets:
Cash and cash equivalents	$	716,560	$	716,560	$	403,941		403,941
Restricted cash		4,268		4,268		4,414		4,414
Cash segregated for regulatory purposes		35		35		128,031		128,031
Securities purchased under agreements to resell		225,075		225,075		158,695		158,695
Financial instruments owned		801,494		801,494		763,608		763,608
Available-for-sale securities		1,756,253		1,756,253		1,625,168		1,625,168
Held-to-maturity securities		1,312,115		1,305,959		708,008		715,274
Loans held for sale		109,110		109,110		214,531		214,531
Bank loans		1,404,353		1,420,068		815,937		834,188
Investments		217,228		217,228		236,434		236,434
Financial liabilities:
Securities sold under agreements to repurchase	$	263,809	$	263,809	$	140,346	$	140,346
Bank deposits		4,663,323		4,072,038		3,346,133		3,368,643
Financial instruments sold, but not yet purchased		481,214		481,214		342,708		342,708
Securities sold, but not yet purchased		-		-		-		-
Derivative contracts (1)		9,349		9,349		19,934		19,934
Senior notes (2)		325,000		328,635		325,000		338,475
Non-recourse debt (2)		-		-		58,992		58,992
Debentures to Stifel Financial Capital Trusts		82,500		72,201		82,500		66,545
Liabilities subordinated to claims of general creditors		3,131		3,122		5,318		5,204

(1) Included in accounts payable and accrued expenses in the consolidated statements of financial condition.
(2) Included in corporate debt in the consolidated statements of financial condition.

The following table presents the estimated fair values of financial instruments not measured at fair value on a recurring basis (in thousands):


	December 31, 2013
	Total		Level 1		Level 2		Level 3
Financial assets:
Cash	$	638,397	$	638,397	$	-	$	-
Restricted cash		4,268		4,268		-		-
Cash segregated for regulatory purposes		35		35		-		-
Securities purchased under agreements to resell		225,075		225,075		-		-
Held-to-maturity securities		1,305,959		-		1,073,953		232,006
Loans held for sale		109,110		-		109,110		-
Bank loans		1,420,068		-		1,420,068		-
Financial liabilities:
Securities sold under agreements to repurchase	$	263,809	$	747	$	263,062	$	-
Bank deposits		4,072,038		-		4,072,038		-
Senior notes		328,635		328,635		-		-
Non-recourse debt		-		-		-		-
Debentures to Stifel Financial Capital Trusts		72,201		-		-		72,201
Liabilities subordinated to claims of general creditors		3,122		-		-		3,122


	December 31, 2012
	Total		Level 1		Level 2		Level 3
Financial assets:
Cash	$	331,345	$	331,345	$	-	$	-
Restricted cash		4,414		4,414		-		-
Cash segregated for regulatory purposes		128,031		128,031		-		-
Securities purchased under agreements to resell		158,695		154,688		4,007		-
Held-to-maturity securities		715,274		-		487,775		227,499
Loans held for sale		214,531		-		214,531		-
Bank loans		834,188		-		834,188		-
Financial liabilities:
Securities sold under agreements to repurchase	$	140,346	$	140,346	$	-	$	-
Bank deposits		3,368,643		-		3,368,643		-
Senior notes		338,475		338,475		-		-
Non-recourse debt		58,992		-		58,992		-
Debentures to Stifel Financial Capital Trusts		66,545		-		-		66,545
Liabilities subordinated to claims of general creditors		5,204		-		-		5,204

The following, as supplemented by the discussion above, describes the valuation techniques used in estimating the fair value of our financial instruments as of December 31, 2013 and 2012.

Financial Assets

Securities Purchased Under Agreements to Resell

Securities purchased under agreements to resell are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at December 31, 2013 and 2012 approximate fair value due to the short-term nature.

Held-to-Maturity Securities

The estimated fair value, included in the above table, is determined using several factors; however, primary weight is given to discounted cash flow modeling techniques that incorporated an estimated discount rate based upon recent observable debt security issuances with similar characteristics.

Bank Loans

The fair values of mortgage loans and commercial loans were estimated using a discounted cash flow method, a form of the income approach. Discount rates were determined considering rates at which similar portfolios of loans would be made under current conditions and considering liquidity spreads applicable to each loan portfolio based on the secondary market.

Financial Liabilities

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at December 31, 2013 and 2012 approximate fair value due to the short-term nature.

Bank Deposits

The fair value for demand deposits is equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The carrying amounts of variable-rate money market and savings accounts approximate their fair values at the reporting date as these are short-term in nature. The fair value of other interest-bearing deposits, including certificates of deposit, was calculated by discounting the future cash flows using discount rates based on the expected current market rates for similar products with similar remaining terms.

Senior Notes

The fair value of our senior notes is estimated based upon quoted market prices.

Non-Recourse Debt

The fair value of our non-recourse debt is based on the discounted value of contractual cash flows. We have assumed a discount rate based on the coupon achieved in our 6.7% senior notes due 2022.

Debentures to Stifel Financial Capital Trusts

The fair value of our trust preferred securities is based on the discounted value of contractual cash flows. We have assumed a discount rate based on the coupon achieved in our 6.7% senior notes due 2022.

Liabilities Subordinated to Claims of General Creditors

The fair value of subordinated debt was measured using the interest rates commensurate with borrowings of similar terms.

These fair value disclosures represent our best estimates based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected losses, current economic conditions, risk characteristics of the various instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in the above methodologies and assumptions could significantly affect the estimates.