Earnings Per Share

6 Months Ended

Jun. 30, 2012

Disclosure Text Block

Earnings per Share

5. Earnings Per Share

Basic earnings per share attributable to TDS shareholders is computed by dividing Net income available to common shareholders of TDS by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to TDS shareholders is computed by dividing Net income available to common shareholders of TDS by the weighted average number of common shares outstanding during the period adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental shares issuable upon exercise of outstanding stock options and the vesting of restricted stock units.

On January 13, 2012, TDS shareholders approved a Share Consolidation Amendment to the Restated Certificate of Incorporation of TDS whereby (a) each Special Common Share was reclassified as a Common Share on a one-for-one basis, (b) each Common Share was reclassified as 1.087 Common Shares, and (c) each Series A Common Share was reclassified as 1.087 Series A Common Shares.  The weighted average number of shares used in basic and diluted earnings per share as of the beginning of all periods presented, have been retroactively restated to reflect the impact of the increased shares outstanding as a result of the Share Consolidation. 

The amounts used in computing earnings per share and the effects of potentially dilutive securities on the weighted average number of Common and Series A Common Shares are as follows:

				Three Months Ended						Six Months Ended
				June 30,						June 30,
				2012			2011			2012			2011
(Dollars and shares in thousands, except per share amounts)
Basic earnings per share attributable to TDS shareholders:
	Net income available to common shareholders of TDS
		used in basic earnings per share		$	42,325		$	91,942		$	94,566		$	135,433
Adjustments to compute diluted earnings:
	Noncontrolling interest (1)				(185	)		(347	)		(499	)		(581	)
	Preferred dividend (2)				12			12			25			25
	Net income attributable to common shareholders of
		TDS used in diluted earnings per share		$	42,152		$	91,607		$	94,092		$	134,877
Weighted average number of shares used in basic
	earnings per share:
		Common Shares			101,467			101,338			101,567			101,597
		Series A Common Shares			7,265			7,085			7,126			7,081
			Total		108,732			108,423			108,693			108,678
Effects of dilutive securities:
	Stock options				2			448			4			457
	Restricted stock units				223			207			202			195
	Preferred shares				65			55			65			55
Weighted average number of shares used in diluted
	earnings per share				109,022			109,133			108,964			109,385
Basic earnings per share attributable to TDS shareholders				$	0.39		$	0.85		$	0.87		$	1.25
Diluted earnings per share attributable to TDS shareholders				$	0.39		$	0.84		$	0.86		$	1.23

• The noncontrolling income adjustment reflects the additional noncontrolling share of U.S. Cellular's income computed as if all of U.S. Cellular's dilutive securities were outstanding.
• The preferred dividend adjustment reflects the dividend reduction related to preferred securities that were dilutive, and therefore treated as if converted for common shares.

Certain Common Shares issuable upon the exercise of stock options, vesting of restricted stock units or conversion of preferred shares were not included in average diluted shares outstanding for the calculation of Diluted earnings per share because their effects were antidilutive. The number of such Common Shares excluded is shown in the table below.

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2012	2011	2012	2011
(Shares in thousands)
Stock options	7,993	3,395	7,568	3,175
Restricted stock units	169	127	85	64
Preferred shares	—	—	—	—