EX-12 2 exhibit12.htm EX-12

|  |  |  |  |  |  |  |  | Exhibit 12
TELEPHONE AND DATA SYSTEMS, INC. RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
|  |  |  |  | Six Months Ended
|  |  |  |  | June 30,
|  |  |  |  | 2014 |  | 2013
(Dollars in thousands) |  |  |  |  |
EARNINGS: |  |  |  |  |
| Income (loss) before income taxes (1) | $ | (7,446) |  | $ | 322,173
| Add (deduct): |  |  |  |  |
|  | Equity in earnings of unconsolidated entities |  | (72,117) |  |  | (62,694)
|  | Distributions from unconsolidated entities |  | 65,569 |  |  | 47,635
|  | Amortization of capitalized interest |  | 3,301 |  |  | 1,318
|  | Income attributable to noncontrolling interests in subsidiaries that do not have fixed charges |  | (645) |  |  | (5,522)
|  |  |  |  |  | (11,338) |  |  | 302,910
| Add fixed charges: |  |  |  |  |
|  | Consolidated interest expense (2) |  | 56,605 |  |  | 48,247
|  | Interest portion (1/3) of consolidated rent expense |  | 23,126 |  |  | 27,276
|  |  |  |  | $ | 68,393 |  | $ | 378,433
FIXED CHARGES: |  |  |  |  |
|  | Consolidated interest expense (2) | $ | 56,605 |  | $ | 48,247
|  | Capitalized interest |  | 3,824 |  |  | 12,062
|  | Interest portion (1/3) of consolidated rent expense |  | 23,126 |  |  | 27,276
|  |  |  |  | $ | 83,555 |  | $ | 87,585
RATIO OF EARNINGS TO FIXED CHARGES |  | * |  |  | 4.32
|  | Tax-effected preferred dividends | $ | 39 |  | $ | 57
|  | Fixed charges |  | 83,555 |  |  | 87,585
|  | Fixed charges and preferred dividends | $ | 83,594 |  | $ | 87,642
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS |  | * |  |  | 4.32
(1) | Includes Gain on license sales and exchanges of $91.4 million and Gain on sale of business and other exit costs, net of $4.3 million in 2014, and Gain on sale of business and other exit costs, net of $296.1 million in 2013.
(2) | Interest expense on income tax contingencies is not included in fixed charges.
* | Earnings for the six months ended June 30, 2014 were inadequate to cover Fixed charges and Fixed charges and preferred dividends by $15.2 million.