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| Exhibit 12 | |||
UNITED STATES CELLULAR CORPORATION RATIO OF EARNINGS TO FIXED CHARGES (1) | ||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||
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(Dollars in thousands) | 2014 |
| 2013 |
| 2012 |
| 2011 |
| 2010 | |||||||
EARNINGS: |
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Income before income taxes (2) | $ | (58,704) |
| $ | 257,656 |
| $ | 205,053 |
| $ | 312,822 |
| $ | 241,116 | ||
Add (deduct): |
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| Equity in earnings of unconsolidated entities |
| (129,764) |
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| (131,949) |
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| (90,364) |
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| (83,566) |
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| (97,318) | |
| Distributions from unconsolidated entities |
| 112,336 |
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| 125,660 |
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| 84,417 |
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| 91,768 |
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| 100,359 | |
| Amortization of capitalized interest |
| 6,116 |
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| 3,704 |
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| 855 |
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| 613 |
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| 492 | |
| Income attributable to noncontrolling interests in subsidiaries that do not have fixed charges |
| (1,763) |
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| (6,575) |
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| (30,122) |
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| (24,247) |
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| (23,869) | |
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| (71,779) |
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| 248,496 |
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| 169,839 |
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| 297,390 |
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| 220,780 |
Add fixed charges: |
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| Consolidated interest expense (3) |
| 57,386 |
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| 43,963 |
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| 42,393 |
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| 65,614 |
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| 61,555 | |
| Interest portion (1/3) of consolidated rent expense |
| 50,791 |
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| 54,019 |
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| 61,305 |
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| 57,187 |
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| 54,356 | |
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| $ | 36,398 |
| $ | 346,478 |
| $ | 273,537 |
| $ | 420,191 |
| $ | 336,691 |
FIXED CHARGES: |
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| Consolidated interest expense (3) | $ | 57,386 |
| $ | 43,963 |
| $ | 42,393 |
| $ | 65,614 |
| $ | 61,555 | |
| Capitalized interest |
| 6,236 |
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| 18,382 |
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| 17,930 |
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| 10,064 |
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| 2,446 | |
| Interest portion (1/3) of consolidated rent expense |
| 50,791 |
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| 54,019 |
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| 61,305 |
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| 57,187 |
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| 54,356 | |
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| $ | 114,413 |
| $ | 116,364 |
| $ | 121,628 |
| $ | 132,865 |
| $ | 118,357 |
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RATIO OF EARNINGS TO FIXED CHARGES |
| * |
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| 2.98 |
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| 2.25 |
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| 3.16 |
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| 2.84 | ||
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(1) | Considering, among other things, recent significant divestitures and an increasing amount of rental income in proportion to gross rent expense, U.S. Cellular revised its approach in 2014 in calculating the above ratios to use gross rent expense, rather than net rent expense, for estimating the interest portion of rent expense. Prior years have been revised to conform to the 2014 presentation. | |||||||||||||||
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(2) | Includes gain on sale of business and other exit costs, net of $32.8 million and $246.8 million in 2014 and 2013, respectively, and loss on sale of business and other exit costs, net of $21.0 million in 2012. | |||||||||||||||
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| Includes gain on license sales and exchanges of $113.0 million, $255.5 million and $11.8 million in 2014, 2013 and 2011, respectively. | |||||||||||||||
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| Includes gain on investments of $18.6 million in 2013, loss on investments of $3.7 million in 2012 and gain on investments of $11.4 million in 2011. | |||||||||||||||
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(3) | Interest expense on income tax contingencies is not included in fixed charges. | |||||||||||||||
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* | Earnings for the year ended December 31, 2014 were inadequate to cover Fixed charges by $78.0 million. | |||||||||||||||