EX-12 2 TDS10kExhibit12.htm EX-12

Exhibit 12

TELEPHONE AND DATA SYSTEMS, INC.

RATIO OF EARNINGS TO FIXED CHARGES

For the Year Ended December 31,

|  |  | 2016 |  | 2015 |  | 2014 |  | 2013 |  | 2012
(Dollars in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |
EARNINGS: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) before income taxes 1 | $ | 92 |  | $ | 435 |  | $ | (152) |  | $ | 293 |  | $ | 196
Add (deduct): |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Equity in earnings of unconsolidated entities |  | (140) |  |  | (140) |  |  | (132) |  |  | (133) |  |  | (93)
| Distributions from unconsolidated entities |  | 93 |  |  | 60 |  |  | 112 |  |  | 128 |  |  | 85
| Amortization of capitalized interest |  | 8 |  |  | 8 |  |  | 7 |  |  | 5 |  |  | 2
| Income attributable to noncontrolling interests in subsidiaries that do not have fixed charges |  | (1) |  |  | (6) |  |  | (1) |  |  | (6) |  |  | (26)
|  |  |  | 52 |  |  | 357 |  |  | (166) |  |  | 287 |  |  | 164
Add fixed charges: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Consolidated interest expense 2 |  | 170 |  |  | 142 |  |  | 111 |  |  | 99 |  |  | 87
| Interest portion (1/3) of consolidated rent expense |  | 63 |  |  | 60 |  |  | 62 |  |  | 67 |  |  | 72
|  |  | $ | 285 |  | $ | 559 |  | $ | 7 |  | $ | 453 |  | $ | 323
FIXED CHARGES: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Consolidated interest expense 2 | $ | 170 |  | $ | 142 |  | $ | 111 |  | $ | 99 |  | $ | 87
| Capitalized interest |  | 3 |  |  | 6 |  |  | 10 |  |  | 22 |  |  | 21
| Interest portion (1/3) of consolidated rent expense |  | 63 |  |  | 60 |  |  | 62 |  |  | 67 |  |  | 72
|  |  | $ | 236 |  | $ | 208 |  | $ | 183 |  | $ | 188 |  | $ | 180
RATIO OF EARNINGS TO FIXED CHARGES 3 |  | 1.21 |  |  | 2.69 |  |  | * |  |  | 2.41 |  |  | 1.79
1 | Includes non-cash charges related to losses on impairment of $88 million in 2014 and $1 million in 2012.
| Includes gain on sale of business and other exit costs, net of $1 million, $136 million, $16 million and $301 million in 2016, 2015, 2014 and 2013, respectively, and loss on sale of business and other exit costs, net of $21 million in 2 012.
| Includes gain on license sales and exchanges, net of $20 million, $147 million, $113 million, and $256 million in 2016, 2015, 2014, and 2013, respectively.
| Includes gain on investments of $15 million in 2013 and loss on investments of $4 million in 2012.
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 1.21, 2.69, 2.41 and 1.79 for the years ended December 31, 2016, 2015, 2013 and 2012, respectively.
* | Earnings in 2014 were inadequate to cover fixed charges by $176 million, and fixed charges and preferred dividends by $176 million.