Acquisitions Divestitures and Exchanges (Tables)

9 Months Ended

Sep. 30, 2014

Business Combination

Acquisitions, Divestitures and Exchanges

	TDS' acquisitions during the nine months ended September 30, 2014 and 2013 and the allocation of the purchase price for these acquisitions were as follows:
					Allocation of Purchase Price
			Purchase Price (1)		Goodwill (2)		Licenses		Franchise Rights		Intangible Assets Subject to Amortization (3)		Net Tangible Assets/(Liabilities)
(Dollars in thousands)
2014
U.S. Cellular licenses			$	41,707	$	-	$	41,707	$	-	$	-	$	-
TDS Telecom cable business (4)				261,786		33,002		2,703		115,629		13,613		96,839
	Total		$	303,493	$	33,002	$	44,410	$	115,629	$	13,613	$	96,839
2013
U.S. Cellular licenses			$	16,540	$	-	$	16,540	$	-	$	-	$	-
TDS Telecom cable business				264,089		61,270		-		123,668		11,542		67,609
	Total		$	280,629	$	61,270	$	16,540	$	123,668	$	11,542	$	67,609
(1)		Cash amounts paid for acquisitions may differ from the purchase price due to cash acquired in the transactions and the timing of cash payments related to the respective transactions.
(2)		The entire amount of Goodwill acquired in 2014 and 2013 was amortizable for income tax purposes.
(3)		At the date of acquisition, the weighted average amortization period for Intangible Assets Subject to Amortization acquired was 4.5 years in 2014 and 2.9 years in 2013.
(4)		The allocation of purchase price for Bend is preliminary subject to the final valuation of the tangible assets.

Divestiture Financial Impacts

Business divestiture financial impacts

(Dollars in thousands)			Expected Period of Recognition		Projected Range				Cumulative Amount Recognized as of September 30, 2014		Actual Amount Recognized Nine Months Ended September 30, 2014		Actual Amount Recognized Nine Months Ended September 30, 2013		Actual Amount Recognized Three Months Ended September 30, 2014		Actual Amount Recognized Three Months Ended September 30, 2013
(Gain) loss on sale of business and other exit costs, net
	Proceeds from Sprint
		Purchase price		2013	$	(480,000)	$	(480,000)	$	(480,000)	$	-	$	(480,000)	$	-	$	-
		Sprint Cost Reimbursement		2013-2015		(120,000)		(175,000)		(98,289)		(50,648)		(4,221)		(1,454)		(4,213)
	Net assets transferred			2013		160,073		160,073		160,073		-		160,073		-		-
	Non-cash charges for the write-off and write-down of property under construction and related assets			2012-2015		10,000		15,000		10,965		290		54		(48)		(27)
	Employee related costs including severance, retention and outplacement			2012-2014		13,000		16,000		14,139		(123)		2,462		10		(641)
	Contract termination costs			2012-2015		70,000		100,000		81,377		21,793		18,781		(9,040)		2,176
	Transaction costs			2012-2014		5,000		7,000		6,183		618		4,081		156		362
		Total (Gain) loss on sale of business and other exit costs, net			$	(341,927)	$	(356,927)	$	(305,552)	$	(28,070)	$	(298,770)	$	(10,376)	$	(2,343)
Depreciation, amortization and accretion expense
	Incremental depreciation, amortization and accretion, net of salvage values			2012-2014		215,000		216,000		215,238		16,667		134,000		3,582		45,676
(Increase) decrease in Operating income					$	(126,927)	$	(140,927)	$	(90,314)	$	(11,403)	$	(164,770)	$	(6,794)	$	43,333

		As a result of the transaction, TDS recognized the following amounts in the Consolidated Balance Sheet:
					Nine Months Ended September 30, 2014
(Dollars in thousands)			Balance December 31, 2013		Costs Incurred		Cash Settlements (1)		Adjustments (2)		Balance September 30, 2014
Accrued compensation
	Employee related costs including severance, retention, outplacement		$	2,053	$	99	$	(1,121)	$	(221)	$	810
Accounts payable
	Contract termination costs		$	-	$	4,018	$	-	$	(1,070)	$	2,948
Other current liabilities
	Contract termination costs		$	13,992	$	12,703	$	(19,390)	$	1,367	$	8,672
Other deferred liabilities and credits
	Contract termination costs		$	30,849	$	24,171	$	(3,380)	$	(29,707)	$	21,933
(1)		Cash settlement amounts are included in either the Net income, changes in Accounts payable or changes in Other assets and liabilities line items as part of Cash flows from operating activities on the Consolidated Statement of Cash Flows.
(2)		Adjustment to liability represents changes to previously accrued amounts.

(Dollars in thousands)			Projected Range				Actual Amount Recognized Nine Months Ended September 30, 2014		Actual Amount Recognized Three Months Ended September 30, 2014
(Gain) loss on sale of business and other exit costs, net
	Charges for the impairment and decommissioning of various operating assets		$	8,000	$	12,000	$	8,719	$	(3,495)
	Employee related costs including severance, retention and outplacement			500		1,500		647		147
	Contract termination costs			10,000		15,000		11,450		11,042
		Total (Gain) loss on sale of business and other exit costs, net	$	18,500	$	28,500	$	20,816	$	7,694

		As a result of the transaction, TDS recognized the following amounts in the Consolidated Balance Sheet:
					Nine Months Ended September 30, 2014
(Dollars in thousands)			Balance May 23, 2014		Costs Incurred		Cash Settlements (1)		Adjustments (2)		Balance September 30, 2014
Accrued compensation
	Employee related costs including severance, retention and outplacement		$	-	$	647	$	(247)	$	-	$	400
Other current liabilities
	Contract termination costs		$	-	$	7,475	$	(1,770)	$	-	$	5,705
Other deferred liabilities and credits
	Contract termination costs		$	-	$	3,975	$	-	$	-	$	3,975
(1)		Cash settlement amounts are included in either the Net income or changes in Other assets and liabilities line items as part of Cash flows from operating activities on the Consolidated Statement of Cash Flows.
(2)		Adjustment to liability represents changes to previously accrued amounts.