EX-12 2 exhibit12.htm EX-12

Exhibit 12

TELEPHONE AND DATA SYSTEMS, INC.

RATIO OF EARNINGS TO FIXED CHA RGES

|  |  |  |  | Nine Months Ended
|  |  |  |  | September 30,
|  |  |  |  | 2016 |  | 2015
(Dollars in millions) |  |  |  |  |
EARNINGS: |  |  |  |  |
| Income before income taxes 1 | $ | 103 |  | $ | 443
| Add (deduct): |  |  |  |  |
|  | Equity in earnings of unconsolidated entities |  | (109) |  |  | (110)
|  | Distributions from unconsolidated entities |  | 55 |  |  | 45
|  | Amortization of capitalized interest |  | 6 |  |  | 6
|  | Income attributable to noncontrolling interests in subsidiaries that do not have fixed charges |  | – |  |  | (6)
|  |  |  |  | $ | 55 |  | $ | 378
| Add fixed charges: |  |  |  |  |
|  | Consolidated interest expense 2 |  | 127 |  |  | 103
|  | Interest portion (1/3) of consolidated rent expense |  | 46 |  |  | 46
|  |  |  |  | $ | 228 |  | $ | 527
FIXED CHARGES: |  |  |  |  |
|  | Consolidated interest expense 2 | $ | 127 |  | $ | 103
|  | Capitalized interest |  | 2 |  |  | 6
|  | Interest portion (1/3) of consolidated rent expense |  | 46 |  |  | 46
|  |  |  |  | $ | 175 |  | $ | 155
RATIO OF EARNINGS TO FIXED CHARGES 3 |  | 1.30 |  |  | 3.40
1 | Includes Gain on sale of business and other exit costs, net of $130 million in 2015. Additionally, includes $16 million and $147 million of Gain on license sales and exchanges, net in 2016 and 2015, respectively.
2 | Interest expense on income tax contingencies is not included in fixed charges.
3 | Ratio of earnings to fixed charges and preferred dividends was also 1.30 and 3.40 for the nine months ended September 30, 2016 and 2015, respectively.