Cablevision 2013 Annual Report Download - page 158

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share amounts)
F-49
At December 31, 2012:
Level I Level II Level III Total
Assets:
Money market funds ................................. $250,695 $ - $ - $250,695
Investment securities ................................. 122 - - 122
Investment securities pledged as
collateral ................................................ 802,834 - - 802,834
Prepaid forward contracts .......................... - 3,143 - 3,143
Liabilities:
Liabilities under derivative contracts:
Prepaid forward contracts ....................... - 148,263 - 148,263
The Company's cash equivalents and restricted cash, investment securities and investment securities
pledged as collateral are classified within Level I of the fair value hierarchy because they are valued using
quoted market prices.
The Company's prepaid forward contracts reflected as derivative contracts and liabilities under derivative
contracts on the Company's balance sheets are valued using market-based inputs to valuation models.
These valuation models require a variety of inputs, including contractual terms, market prices, yield
curves, and measures of volatility. When appropriate, valuations are adjusted for various factors such as
liquidity, bid/offer spreads and credit risk considerations. Such adjustments are generally based on
available market evidence. Since model inputs can generally be verified and do not involve significant
management judgment, the Company has concluded that these instruments should be classified within
Level II of the fair value hierarchy.
The Company considers the impact of credit risk when measuring the fair value of its derivative asset
and/or liability positions, as applicable.
In addition, see Note 4 for a discussion of impairment charges related to nonfinancial assets not measured
at fair value on a recurring basis.
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate fair value of each class of financial
instruments for which it is practicable to estimate:
Credit Facility Debt, Collateralized Indebtedness, Senior Notes and Debentures and Notes Payable
The fair values of each of the Company's debt instruments are based on quoted market prices for the same
or similar issues or on the current rates offered to the Company for instruments of the same remaining
maturities.