US Cellular 2012 Annual Report Download - page 57

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United States Cellular Corporation
Notes to the Consolidated Financial Statements (Continued)
NOTE 3 FAIR VALUE MEASUREMENTS
As of December 31, 2012 and 2011, 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 December 31, 2012 December 31, 2011
Fair Value
Hierarchy Book Value Fair Value Book Value Fair Value
(Dollars in thousands)
Cash and cash equivalents ........... 1 $378,358 $378,358 $424,155 $424,155
Short-term investments(1)(2)
Government-backed securities(3) ..... 1 100,676 100,676 127,039 127,039
Long-term investments(1)(4)
Government-backed securities(3) ..... 1 50,305 50,339 30,057 30,140
Long-term debt(5)
6.95% Senior Notes .............. 1 342,000 376,610 342,000 364,162
6.7% Senior Notes ............... 2 532,194 582,744 534,111 534,860
(1) Designated as held-to-maturity investments and are recorded at amortized cost in the Consolidated
Balance Sheet.
(2) Maturities are less than twelve months from the respective balance sheet dates.
(3) Includes U.S. treasuries and corporate notes guaranteed under the Federal Deposit Insurance
Corporation’s Temporary Liquidity Guarantee Program.
(4) Maturities range between 14 and 23 months from the balance sheet date.
(5) 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 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 6.09% and 6.85% for the 6.7% Senior Notes at December 31, 2012 and 2011, respectively.
NOTE 4 INCOME TAXES
U.S. Cellular’s income taxes balances at December 31, 2012 and 2011 were as follows:
December 31, 2012 2011
(Dollars in thousands)
Federal income taxes receivable (payable) .................. $(1,614) $73,525
State income taxes receivable ........................... 1,612 1,266
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