Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Financial Instruments

Note 5. Financial Instruments

Cash and cash equivalents, accounts and notes receivable, and accounts payable are carried at cost, which approximates fair value. Our short-term investments (consisting primarily of time deposits, commercial paper, and Treasury securities), totaling $1.5 billion and $1.8 billion as of March 31, 2013 and December 31, 2012, respectively, are recorded at amortized cost, and the respective carrying amounts approximate fair value. The fair value of our marketable equity securities totaling $45 million as of both March 31, 2013 and December 31, 2012, respectively, is measured on a recurring basis using quoted prices in active markets.

The estimated fair value of current and long-term debt, excluding the convertible bond, is determined based on quoted prices in active markets or by using other observable inputs that are derived principally from or corroborated by observable market data. The outstanding carrying value under our credit facilities as of March 31, 2013, which totaled $945 million and approximates fair value, was transferred out of estimated fair value using observable inputs and into estimated fair value using unobservable inputs due to the lack of an available pricing source. To estimate the fair value of our Clearwire Exchangeable Notes, including the embedded derivative, as well as the convertible bond issued to New Sprint, we used a convertible bond pricing model based on the relevant interest rates, conversion feature and other significant inputs not observable in the market. The significant unobservable inputs used in the fair value measurement of the Company's exchangeable notes, embedded derivative and convertible bond are the credit condition of the respective companies, probability and timing of conversion, and discount for lack of marketability. Significant increases or decreases in any of those inputs, in isolation, would result in a significantly lower or higher fair value measurement.

The following table presents carrying amounts and estimated fair values of our exchangeable notes and embedded derivative as well as current and long-term debt:

	Carrying amount at March 31, 2013		Estimated Fair Value Using Input Type
			Quoted prices in active markets		Observable		Unobservable		Total estimated fair value
	(in millions)
Exchangeable Notes	$	80	$	—	$	—	$	80	$	80
Current and long-term debt	$	23,733	$	17,399	$	5,352	$	4,048	$	26,799

	Carrying amount at December 31, 2012		Estimated Fair Value Using Input Type
			Quoted prices in active markets		Observable		Unobservable		Total estimated fair value
	(in millions)
Exchangeable Notes	$	—	$	—	$	—	$	—	$	—
Current and long-term debt	$	23,569	$	17,506	$	6,118	$	3,104	$	26,728