Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Stock based compensation

Stock-based compensation

Year Ended December 31,	2014		2013		2012
(Dollars in thousands)
Stock option awards	$	15,802	$	12,973	$	20,884
Restricted stock unit awards		17,968		15,535		19,025
Deferred compensation bonus and matching stock unit awards		690		550		749
Awards under Non-Employee Director compensation plan		1,333		1,280		1,213
Total stock-based compensation, before income taxes		35,793		30,338		41,871
Income tax benefit		(13,519)		(11,459)		(15,848)
Total stock-based compensation expense, net of income taxes	$	22,274	$	18,879	$	26,023

Stock-based compensation, allocation by financial statement line item

December 31,		2014		2013		2012
(Dollars in thousands)
Selling, general and administrative expense	$	32,505	$	27,130	$	38,563
Cost of services and products		3,288		3,208		3,308
Total stock-based compensation	$	35,793	$	30,338	$	41,871

Stock-based compensation, fair value assumptions

TDS estimated the fair value of stock options granted in 2014, 2013 and 2012 using the Black Scholes valuation model and the assumptions shown in the table below:
	2014		2013		2012
Expected life	5.8 Years		5.7 Years		5.5 Years
Expected annual volatility rate	39.6	%	41.0	%	41.1	%
Dividend yield	2.0	%	2.3	%	2.4	%
Risk-free interest rate	1.8	%	1.0	%	0.9	%
Estimated annual forfeiture rate	2.9	%	2.9	%	2.9	%

U.S. Cellular estimated the fair value of stock options granted during 2014, 2013, and 2012 using the Black-Scholes valuation model and the assumptions shown in the table below.
	2014	2013	2012
Expected life	4.5 years	4.6-9.0 years	4.5 years
Expected annual volatility rate	28.0%-28.1%	29.2%-39.6%	40.7%-42.6%
Dividend yield	0%	0%	0%
Risk-free interest rate	1.4%-1.5%	0.7%-2.4%	0.5%-0.9
Estimated annual forfeiture rate	9.4%	0.0%-8.1%	0.0%-9.1%

Summary of stock options

								Weighted
								Average
		Weighted		Weighted				Remaining
		Average		Average		Aggregate		Contractual
	Number of	Exercise		Grant Date		Intrinsic		Life
Common Share Options	Options	Prices		Fair Value		Value		(in years)
Outstanding at December 31, 2011	7,216,000	$	33.89
(4,865,000 exercisable)			36.67
Granted	1,702,000		20.79	$	6.28
Exercised	(1,000)		20.65			$	4,000
Forfeited	(106,000)		23.81
Expired	(298,000)		30.12
Outstanding at December 31, 2012	8,513,000	$	31.53
(5,782,000 exercisable)			35.12
Granted	1,259,000		22.60	$	7.01
Exercised	(683,000)		25.33			$	2,450,000
Forfeited	(81,000)		23.75
Expired	(228,000)		34.10
Outstanding at December 31, 2013	8,780,000	$	30.74
(6,160,000 exercisable)			34.13
Granted	930,000		26.83	$	8.66
Exercised	(40,000)		21.28			$	174,000
Forfeited	(73,000)		23.05
Expired	(457,000)		34.55
Outstanding at December 31, 2014	9,140,000	$	30.25			$	9,651,000	5.6
(6,487,000 exercisable)		$	32.93			$	4,143,000	4.5

								Weighted
								Average
		Weighted		Weighted				Remaining
		Average		Average		Aggregate		Contractual
	Number of	Exercise		Grant Date		Intrinsic		Life
Common Share Options	Options	Price		Fair Value		Value		(in years)
Outstanding at December 31, 2011	2,834,000	$	43.07
(1,533,000 exercisable)			46.23
Granted	677,000		34.91	$	12.61
Exercised	(47,000)		29.82			$	205,000
Forfeited	(117,000)		38.45
Expired	(133,000)		46.17
Outstanding at December 31, 2012	3,214,000	$	41.58
(1,928,000 exercisable)			43.99
Granted	1,213,000		32.45	$	11.53
Exercised	(892,000)		34.78			$	6,787,000
Forfeited	(574,000)		34.17
Expired	(247,000)		48.35
Outstanding at December 31, 2013	2,714,000	$	42.22
(1,359,000 exercisable)			46.91
Granted	1,116,000		41.21	$	10.68
Exercised	(233,000)		32.80			$	1,966,000
Forfeited	(144,000)		35.09
Expired	(65,000)		45.68
Outstanding at December 31, 2014	3,388,000	$	41.51			$	7,495,000	6.70
(1,586,000 exercisable)		$	45.28			$	2,984,000	4.40

Summary of nonvested restricted stock units

A summary of TDS nonvested restricted stock units and changes during the year ended December 31, 2014 is presented in the table below:
Common Restricted Stock Units	Number	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013	663,000	$	20.43
Granted	355,000	$	25.26
Vested	(300,000)	$	19.68
Forfeited	(26,000)	$	21.31
Nonvested at December 31, 2014	692,000	$	23.20

A summary of U.S. Cellular nonvested restricted stock units at December 31, 2014 and changes during the year then ended is presented in the table below:
Common Restricted Stock Units	Number	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013	1,170,000	$	36.46
Granted	370,000		41.24
Vested	(274,000)		41.92
Forfeited	(124,000)		34.38
Nonvested at December 31, 2014	1,142,000	$	35.60