Telephone and Data Systems (TDS) 10-K 2016 FY Annual report

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 taxes1		$	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 expense2		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 expense2	$	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 CHARGES3			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 2012.
	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.