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United States Cellular Corporation
Notes to Consolidated Financial Statements (Continued)
NOTE 2 FAIR VALUE MEASUREMENTS
As of December 31, 2013 and 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 December 31, 2013 December 31, 2012
Fair Value
Hierarchy Book Value Fair Value Book Value Fair Value
(Dollars in thousands)
Cash and cash equivalents ........... 1 $342,065 $342,065 $378,358 $378,358
Short-term investments
U.S. Treasury Notes .............. 1 50,104 50,104 100,676 100,676
Long-term investments
U.S. Treasury Notes .............. 1 — — 50,305 50,339
Long-term debt
6.95% Senior Notes .............. 1 342,000 309,852 342,000 376,610
6.7% Senior Notes ............... 2 532,449 507,697 532,194 582,744
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 values of Long-term investments were
estimated using quoted market prices for the individual issuances. The fair value of 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 7.35% and 6.09% for the 6.7% Senior Notes at December 31, 2013 and
2012, respectively.
As of December 31, 2013 and 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.
NOTE 3 INCOME TAXES
U.S. Cellular’s income taxes balances at December 31, 2013 and 2012 were as follows:
December 31, 2013 2012
(Dollars in thousands)
Federal income taxes (payable) .......................... $(32,351) $(1,614)
State income taxes receivable (payable) ................... (1,545) 1,612
Income tax expense (benefit) is summarized as follows:
Year Ended December 31, 2013 2012 2011
(Dollars in thousands)
Current
Federal ................................ $180,056 $10,547 $ (90,235)
State .................................. 8,426 4,186 1,049
Deferred
Federal ................................ (69,917) 54,490 187,581
State .................................. (5,431) (5,246) 15,683
$113,134 $63,977 $114,078
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