Fair Value Measurements

9 Months Ended

Sep. 30, 2014

2. Fair Value Measurements

With the exception of HMS Goodwill as of September 30, 2014 (as discussed in footnote (1) to the below table), TDS did not have any financial or nonfinancial assets or liabilities that were required to be recorded at fair value in its Consolidated Balance Sheet in accordance with GAAP as of September 30, 2014 and December 31, 2013. 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	September 30, 2014					December 31, 2013
			Level within the Fair Value Hierarchy	Book Value		Fair Value		Total Gains (Losses)	Book Value		Fair Value
(Dollars in thousands)
Cash and cash equivalents			1	$	573,067	$	573,067		$	830,014	$	830,014
Short-term investments
	U.S. Treasury Notes		1		40,014		40,014			50,104		50,104
Long-term debt
	Retail		1		1,178,250		1,160,925			1,178,250		1,048,010
	Institutional and other		2		537,568		539,805			537,454		512,635
HMS Goodwill ⁽¹⁾			3		34,830		34,830	(84,000)		-		-

(1)		Goodwill with a carrying amount of $118.8 million was written down to its implied fair value of $34.8 million, resulting in an impairment charge of $84.0 million, which was recorded in Loss on impairment of assets in the Consolidated Statement of Operations in the third quarter of 2014. See Note 6 — Intangible Assets for additional information.

Short-term investments are designated as held-to-maturity investments and recorded at amortized cost in the Consolidated Balance Sheet. Long-term debt excludes capital lease obligations and the 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 “Retail” 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 0.00% to 6.85% at September 30, 2014.