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Fair Value Measurements
 3 Months Ended
Mar. 31, 2013
Disclosure Text Block  
Fair Value Measurements

2. Fair Value Measurements

 

As of March 31, 2013 and December 31, 2012, U.S. Cellular did not have any financial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP. However, U.S. Cellular has applied the provisions of fair value accounting for purposes of computing the fair value of financial instruments for disclosure purposes as displayed below.

 

 

  Level within the Fair Value Hierarchy March 31, 2013 December 31, 2012
   Book Value  Fair Value Book Value Fair Value
(Dollars in thousands)             
Cash and cash equivalents1 $ 419,696 $ 419,696 $ 378,358 $ 378,358
Short-term investments             
 Government-backed securities1   110,585   110,585   100,676   100,676
Long-term investments             
 Government-backed securities1   40,142   40,175   50,305   50,339
Long-term debt             
 6.95% Senior Notes1   342,000   363,067   342,000   376,610
 6.7% Senior Notes2   532,256   585,423   532,194   582,744

Short-term investments and Long-term investments are both designated as held-to-maturity investments and recorded at amortized cost in the Consolidated Balance Sheet. Long-term investment maturities are 20 months at March 31, 2013. Government-backed securities include U.S. treasuries and corporate notes guaranteed under the Federal Deposit Insurance Corporation's Temporary Liquidity Guarantee Program. Long-term debt excludes capital lease obligations and current portion of Long-term debt.

 

The fair values of Cash and cash equivalents and Short-term investments approximate their book values due to the short-term nature of these financial instruments. The fair value of Long-term debt, excluding capital lease obligations and the current portion of such Long-term debt, was estimated using market prices for the 6.95% Senior Notes, and discounted cash flow analysis using an estimated yield to maturity of 6.05% for the 6.7% Senior Notes at March 31, 2013.

 

As of March 31, 2013 and December 31, 2012, U.S. Cellular did not have nonfinancial assets or liabilities that required the application of fair value accounting for purposes of reporting such amounts in the Consolidated Balance Sheet.