EX-12 2 exhibit12.htm EX-12

|  |  |  |  |  |  |  |  | Exhibit 12
TELEPHONE AND DATA SYSTEMS, INC. RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
|  |  |  |  | Nine Months Ended
|  |  |  |  | September 30,
|  |  |  |  | 2014 |  | 2013
(Dollars in thousands) |  |  |  |  |
EARNINGS: |  |  |  |  |
| Income (loss) before income taxes (1) | $ | (119,355) |  | $ | 304,388
| Add (deduct): |  |  |  |  |
|  | Equity in earnings of unconsolidated entities |  | (108,198) |  |  | (100,303)
|  | Distributions from unconsolidated entities |  | 74,864 |  |  | 51,879
|  | Amortization of capitalized interest |  | 5,575 |  |  | 2,604
|  | Income attributable to noncontrolling interests in subsidiaries that do not have fixed charges |  | (633) |  |  | (5,839)
|  |  |  |  |  | (147,747) |  |  | 252,729
| Add fixed charges: |  |  |  |  |
|  | Consolidated interest expense (2) |  | 83,775 |  |  | 73,208
|  | Interest portion (1/3) of consolidated rent expense |  | 34,456 |  |  | 38,201
|  |  |  |  | $ | (29,516) |  | $ | 364,138
FIXED CHARGES: |  |  |  |  |
|  | Consolidated interest expense (2) | $ | 83,775 |  | $ | 73,208
|  | Capitalized interest |  | 6,563 |  |  | 17,029
|  | Interest portion (1/3) of consolidated rent expense |  | 34,456 |  |  | 38,201
|  |  |  |  | $ | 124,794 |  | $ | 128,438
RATIO OF EARNINGS TO FIXED CHARGES |  | * |  |  | 2.84
|  | Tax-effected preferred dividends | $ | 43 |  | $ | 40
|  | Fixed charges |  | 124,794 |  |  | 128,438
|  | Fixed charges and preferred dividends | $ | 124,837 |  | $ | 128,478
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS |  | * |  |  | 2.83
(1) | Includes Loss on impairment of assets of $84.0 million, Gain on license sales and exchanges of $91.4 million and Gain on sale of business and other exit costs, net of $9.1 million in 2014, and Gain on sale of business and other exit costs, net of $297.6 million in 2013.
(2) | Interest expense on income tax contingencies is not included in fixed charges.
* | Earnings for the nine months ended September 30, 2014 were inadequate to cover Fixed charges and Fixed charges and preferred dividends by $154.3 million.