Note 5 Earnings Per Share

Basic earnings (loss) per share attributable to TDS shareholders is computed by dividing Net income (loss) available to common shareholders of TDS by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share attributable to TDS shareholders is computed by dividing Net income (loss) available to common shareholders of TDS by the weighted average number of common shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon exercise of outstanding stock options and the vesting of restricted stock units.

The amounts used in computing earnings (loss) per common share and the effects of potentially dilutive securities on the weighted average number of common shares were as follows:

Year Ended December 31,				2015		2014		2013
(Dollars and shares in thousands, except earnings per share)
Basic earnings (loss) per share attributable to TDS shareholders:
Net income (loss) available to common shareholders of TDS used in basic
earnings (loss) per share				$	218,988	$	(136,404)	$	141,878
Adjustments to compute diluted earnings:
	Noncontrolling interest adjustment				(1,525)		–		(1,058)
	Preferred dividend adjustment				49		–		49
Net income (loss) available to common shareholders of TDS used in				$	217,512	$	(136,404)	$	140,869
diluted earnings (loss) per share				$	217,512	$	(136,404)	$	140,869

Weighted average number of shares used in basic earnings (loss) per share
		Common Shares			101,453		101,304		101,339
		Series A Common Shares			7,192		7,181		7,151
			Total		108,645		108,485		108,490

Effects of dilutive securities:
	Stock options1				773		–		209
	Restricted stock units1				436		–		375
	Preferred shares1				56		–		58
Weighted average number of shares used in diluted earnings (loss) per share					109,910		108,485		109,132

Basic earnings (loss) per share attributable to TDS shareholders				$	2.02	$	(1.26)	$	1.31

Diluted earnings (loss) per share attributable to TDS shareholders				$	1.98	$	(1.26)	$	1.29

1		There were no effects of dilutive securities in 2014 due to the net loss for the year.

On June 25, 2013, U.S. Cellular paid a special cash dividend of $5.75 per share, for an aggregate amount of $482.3 million, to all holders of U.S. Cellular Common Shares and Series A Common Shares as of June 11, 2013. Outstanding U.S. Cellular stock options and restricted stock unit awards were equitably adjusted for the special cash dividend.

Certain Common Shares issuable upon the exercise of stock options, vesting of restricted stock units or conversion of convertible preferred shares were not included in average diluted shares outstanding for the calculation of Diluted earnings (loss) per share attributable to TDS shareholders because their effects were antidilutive. The number of such Common Shares excluded is shown in the table below.

Year Ended December 31,	2015	2014	2013
(Shares in thousands)
Stock options	4,499	8,984	7,120
Restricted stock units	190	839	171
Preferred shares	–	56	–