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## 14. FAIR VALUE MEASUREMENTS: 

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels: 

$_{•}$ Level 1:  Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. 

$_{•}$ Level 2:  Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. 

$_{•}$ Level 3:  Unobservable inputs that reflect the reporting entity’s own assumptions. 

The carrying value and fair value of our notes, debentures, program contracts payable and non-cancelable commitments as of December 31, 2010 and 2009 were as follows (in thousands): 

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(a) Future program liabilities reflect a license agreement for program material that is not yet available for its first showing or telecast and is, therefore, not recorded as an asset or liability on our balance sheet. 

Our notes, except the 3.0% and 4.875% Notes are fair valued using Level 1 hierarchy inputs described above. The carrying value of our 3.0% and 4.875% Notes approximates their fair value. Our Term Loan B and Cunningham’s bank credit facility are fair valued using Level 2 hierarchy inputs described above. 

Our estimates of active program contracts payable and future program liabilities were based on discounted cash flows using Level 3 inputs described above. The discount rate represents an estimate of a market participants return and risk applicable to program contracts. 

