EX-12 2 tdsexhibit12.htm EX-12

Exhibit 12

TELEPHONE AND DATA SYSTEMS, INC.

RATIO OF EARNINGS TO FIXED CHARGES

For the Year Ended December 31,

|  |  | 2015 |  | 2014 |  | 2013 |  | 2012 |  | 2011
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |
EARNINGS: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) before income taxes 1 | $ | 434,602 |  | $ | (152,224) |  | $ | 292,864 |  | $ | 196,235 |  | $ | 363,745
Add (deduct): |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Equity in earnings of unconsolidated entities |  | (140,076) |  |  | (131,965) |  |  | (132,714) |  |  | (92,867) |  |  | (82,538)
| Distributions from unconsolidated entities |  | 60,060 |  |  | 112,349 |  |  | 127,929 |  |  | 84,884 |  |  | 92,231
| Amortization of capitalized interest |  | 7,516 |  |  | 7,142 |  |  | 4,638 |  |  | 1,676 |  |  | 1,109
| Income attributable to noncontrolling interests in subsidiaries that do not have fixed charges |  | (6,180) |  |  | (1,361) |  |  | (5,651) |  |  | (25,709) |  |  | (22,004)
|  |  |  | 355,922 |  |  | (166,059) |  |  | 2 87,066 |  |  | 164,219 |  |  | 352,543
Add fixed charges: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Consolidated interest expense 2 |  | 141,719 |  |  | 111,397 |  |  | 98,811 |  |  | 86,745 |  |  | 118,201
| Interest portion (1/3) of consolidated rent expense |  | 59,734 |  |  | 61,909 |  |  | 66,698 |  |  | 71,505 |  |  | 65,470
|  |  | $ | 557,375 |  | $ | 7,247 |  | $ | 45 2,575 |  | $ | 322,469 |  | $ | 536,214
FIXED CH ARGES: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Consolidated interest expense 2 | $ | 141,719 |  | $ | 111,397 |  | $ | 98,811 |  | $ | 86,745 |  | $ | 118,201
| Capitalized interest |  | 6,486 |  |  | 10,295 |  |  | 22,206 |  |  | 21,369 |  |  | 14,321
| Interest portion (1/3) of consolidated rent expense |  | 59,734 |  |  | 61,909 |  |  | 66,698 |  |  | 71,505 |  |  | 65,470
|  |  | $ | 207,939 |  | $ | 183,601 |  | $ | 187,715 |  | $ | 179,619 |  | $ | 197,992
RATIO OF EARNINGS TO FIXED CHARGES |  | 2.68 |  |  | * |  |  | 2.41 |  |  | 1.80 |  |  | 2.71
| Tax-effected preferred dividends | $ | 87 |  | $ | 62 |  | $ | 78 |  | $ | 78 |  | $ | 71
| Fixed charges |  | 207,939 |  |  | 183,601 |  |  | 187,715 |  |  | 179,619 |  |  | 197,992
| Fixed charges and preferre d dividends | $ | 208,026 |  | $ | 183,663 |  | $ | 187,793 |  | $ | 179,697 |  | $ | 198,063
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS |  | 2.68 |  |  | * |  |  | 2.41 |  |  | 1.79 |  |  | 2.71
1 | Includes non-cash charges related to losses on impairment of $87.8 million in 2014 and $0.5 million in 2012.
| Includes gain on sale of business and other exit costs, net of $135.9 million, $15.8 million and $300.7 million in 2015, 2014 and 2013, respectively, and loss on sale of business and other exit costs, net of $21.1 million in 2012.
| Includes gain on license sales and exchanges of $146.9 million, $113.0 million, $255.5 million, and $11.8 million in 2015, 2014, 2013, and 2011, respectively.
| Includes gain on investments of $14.5 million in 2013 and $24.1 million in 2011 and loss on investments of $3.7 million in 2012.
2 | Interest expense on income tax contingencies is not included in fixed charges.
* | Earnings in 2014 were inadequate to cover fixed charges by $176.4 million, and fixed charges and preferred dividends by $176.4 million.