Telephone and Data Systems (TDS) 10-K 2006 FY Annual report

Exhibit 12

TELEPHONE AND DATA SYSTEMS, INC.
RATIOS OF EARNINGS TO FIXED CHARGES
For the Year Ended December 31,
(Dollars in Thousands)

	2006			2005 (As Restated)			2004			2003 (As Restated)			2002 (As Restated)
EARNINGS:
Income (loss) before income taxes and minority Interest	$	323,338		$	1,107,135		$	(392,884	)	$	(527,591	)	$	(1,574,565	)
Add (deduct):
Earnings on equity method investments	(95,170		)	(68,039		)	(65,303		)	(51,516		)	(43,799		)
Distributions from unconsolidated entities	78,248			52,624			49,088			45,534			31,328
Minority interest in pre-tax income of subsidiaries that do not have fixed charges	(13,571		)	(9,631		)	(10,682		)	(11,830		)	(15,940		)
	292,845			1,082,089			(419,781		)	(545,403		)	(1,602,976		)
Add fixed charges:
Consolidated interest expense	234,543			216,021			198,706			188,069			157,034
Interest portion (1/3) of consolidated rent expense	42,187			40,919			37,207			29,620			28,696
	$	569,575		$	1,339,029		$	(183,868	)	$	(327,714	)	$	(1,417,246	)
FIXED CHARGES:
Consolidated interest expense	$	234,543		$	216,021		$	198,706		$	188,069		$	157,034
Capitalized interest	494			—			—			—			—
Interest portion (1/3) of consolidated rent expense	42,187			40,919			37,207			29,620			28,696
	$	277,224		$	256,940		$	235,913		$	217,689		$	185,730
RATIO OF EARNINGS TO FIXED CHARGES	2.05			5.21			—		(a)	—		(b)	—		(c)
Tax-effected preferred dividends	$	259		$	312		$	255		$	705		$	665
Fixed charges	277,224			256,940			235,913			217,689			185,730
Fixed charges and preferred dividends	$	277,483		$	257,252		$	236,168		$	218,394		$	186,395
RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED DIVIDENDS	2.05			5.21			—		(a)	—		(b)	—		(c)

(a)Earnings for the year ended December 31, 2004 were insufficient to cover fixed charges by $419.8 million and fixed charges and preferred dividends of $420.0 million. TDS recognized a pre-tax $519.0 million loss on a fair value adjustment related to derivative instruments for the year ended December 31, 2004.

(b)Earnings for the year ended December 31, 2003 were insufficient to cover fixed charges by $545.4 million and fixed charges and preferred dividends by $546.1 million. TDS recognized a pre-tax $297.1 million loss on a fair value adjustment related to derivative instruments for the year ended December 31, 2003.

(c)Earnings for the year ended December 31, 2002 were insufficient to cover fixed charges by $1,603.0 million and fixed charges and preferred dividends by $1,603.8 million. In the year ended December 31, 2002, TDS recognized a pre-tax loss on marketable securities and other investments of $1,888.4 million as a result of management’s determination that unrealized losses with respect to the investments were other than temporary and the write-off of a note receivable.