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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, TDS 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, TDS 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 $ 766,700 $ 766,700 $ 740,481 $ 740,481
Short-term investments             
 Government-backed securities1   125,595   125,595   115,700   115,700
Long-term investments             
 Government-backed securities1   40,142   40,175   50,305   50,339
Long-term debt             
 Retail1   1,178,250   1,230,244   1,178,250   1,238,204
 Institutional and other2   538,369   591,696   538,657   589,435

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 values of Long-term investments were estimated using quoted market prices for the individual issuances. The fair value of “Retail” Long-term debt, excluding capital lease obligations and the current portion of such Long-term debt, was estimated using market prices for TDS' 7.0% Senior Notes, 6.875% Senior Notes, 6.625% Senior Notes and 5.875% Senior Notes, and U.S. Cellular's 6.95% Senior Notes. TDS' institutional debt includes U.S. Cellular's 6.7% Senior Notes which are traded over the counter. TDS estimated the fair value of its institutional and other debt through a discounted cash flow analysis using the interest rates or estimated yield to maturity for each borrowing, which ranged from 0.0% to 6.05% at March 31, 2013.

 

As of March 31, 2013 and December 31, 2012, TDS 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.