Stock-Based Compensation (Tables)
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12 Months Ended |
Dec. 31, 2016 |
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| Share-based Compensation [Abstract] |
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| Stock-based compensation |
The following table summarizes stock-based compensation expense recognized during 2016, 2015 and 2014: Year Ended December 31, | 2016 | | 2015 | | 2014 | (Dollars in millions) | | | | | | | | | Stock option awards | $ | 16 | | $ | 18 | | $ | 16 | Restricted stock unit awards | | 24 | | | 20 | | | 18 | Performance share awards | | – | | | – | | | – | Deferred compensation bonus and matching stock unit awards | | 1 | | | 1 | | | 1 | Awards under Non-Employee Director compensation plan | | 1 | | | 1 | | | 1 | Total stock-based compensation, before income taxes | | 42 | | | 40 | | | 36 | Income tax benefit | | (16) | | | (15) | | | (14) | Total stock-based compensation expense, net of income taxes | $ | 26 | | $ | 25 | | $ | 22 |
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| Stock-based compensation, allocation by financial statement line item |
The following table provides a summary of the stock-based compensation expense included in the Consolidated Statement of Operations for the years ended: December 31, | 2016 | | 2015 | | 2014 | (Dollars in millions) | | | | | | | | | Selling, general and administrative expense | $ | 39 | | $ | 37 | | $ | 33 | Cost of services and products | | 3 | | | 3 | | | 3 | Total stock-based compensation | $ | 42 | | $ | 40 | | $ | 36 |
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| Stock-based compensation, fair value assumptions |
TDS estimated the fair value of stock options granted in 2016, 2015 and 2014 using the Black Scholes valuation model and the assumptions shown in the table below: | 2016 | | 2015 | | 2014 | Expected life | 6.2 years | | 6.1 years | | 5.8 years | Expected annual volatility rate | 30.3% | | 30.8% | | 39.6% | Dividend yield | 2.0% | | 1.9% | | 2.0% | Risk-free interest rate | 1.3% | | 1.8% | | 1.8% | Estimated annual forfeiture rate | 2.7% | | 3.2% | | 2.9% |
U.S. Cellular estimated the fair value of stock options granted during 2016, 2015 and 2014 using the Black-Scholes valuation model and the assumptions shown in the table below. | 2016 | | 2015 | | 2014 | Expected life | 4.7 years | | 4.6 years | | 4.5 years | Expected annual volatility rate | 30.5% | | 30.1% | | 28.0%-28.1% | Dividend yield | 0% | | 0% | | 0% | Risk-free interest rate | 1.2% | | 1.2% | | 1.4%-1.5% | Estimated annual forfeiture rate | 9.4% | | 9.7% | | 9.4% |
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| Summary of stock options |
A summary of TDS stock options (total and portion exercisable) and changes during 2016 is presented in the tables and narrative below. | | | | | | | | | | Weighted | | | | | | | | | | | Average | | | | | Weighted | | Aggregate | | Remaining | | | | | Average | | Intrinsic | | Contractual | | | Number of | | Exercise | | Value | | Life | Common Share Options | | Options | | Prices | | (in millions) | | (in years) | Outstanding at December 31, 2015 | | 9,135,000 | | $ | 30.29 | | | | | | (6,009,000 exercisable) | | | | | 32.54 | | | | | | Granted | | 694,000 | | | 29.45 | | | | | | Exercised | | (562,000) | | | 22.92 | | | | | | Forfeited | | (67,000) | | | 28.13 | | | | | | Expired | | (523,000) | | | 42.56 | | | | | | Outstanding at December 31, 2016 | | 8,677,000 | | $ | 29.98 | | $ | 19 | | 4.8 | (6,167,000 exercisable) | | | | $ | 30.59 | | $ | 17 | | 3.3 |
A summary of U.S. Cellular stock options outstanding (total and portion exercisable) and changes during 2016 is presented in the table below: | | | | | | | | | | Weighted | | | | | | | | | | | Average | | | | | Weighted | | Aggregate | | Remaining | | | | | Average | | Intrinsic | | Contractual | | | Number of | | Exercise | | Value | | Life | Common Share Options | | Options | | Price | | (in millions) | | (in years) | Outstanding at December 31, 2015 | | 4,102,000 | | $ | 40.62 | | | | | | (1,849,000 exercisable) | | | | | 44.33 | | | | | | Granted | | 898,000 | | | 45.87 | | | | | | Exercised | | (541,000) | | | 35.34 | | | | | | Forfeited | | (197,000) | | | 39.08 | | | | | | Expired | | (289,000) | | | 50.06 | | | | | | Outstanding at December 31, 2016 | | 3,973,000 | | $ | 41.92 | | $ | 14 | | 6.8 | (1,937,000 exercisable) | | | | $ | 42.54 | | $ | 7 | | 5.0 |
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| Summary of nonvested restricted stock units |
A summary of TDS nonvested restricted stock units and changes during 2016 is presented in the table below: Common Restricted Stock Units | | Number | | Weighted Average | Grant Date | Fair Value | Nonvested at December 31, 2015 | | 1,044,000 | | $ | 24.70 | Granted | | 452,000 | | $ | 27.87 | Vested | | (341,000) | | $ | 21.26 | Forfeited | | (25,000) | | $ | 26.46 | Nonvested at December 31, 2016 | | 1,130,000 | | $ | 26.97 |
A summary of U.S. Cellular nonvested restricted stock units at December 31, 2016 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, 2015 | | 1,194,000 | | $ | 36.70 | Granted | | 571,000 | | | 43.32 | Vested | | (348,000) | | | 31.52 | Forfeited | | (107,000) | | | 39.28 | Nonvested at December 31, 2016 | | 1,310,000 | | $ | 40.74 |
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| Summary of nonvested performance share awards |
A summary of TDS nonvested Performance Shares and changes during 2016 is presented in the table below: Common Performance Shares | | Number | | Weighted Average | Grant Date | Fair Value | Nonvested at December 31, 2015 | | – | | $ | – | Granted | | 97,000 | | $ | 29.45 | Nonvested at December 31, 2016 | | 97,000 | | $ | 29.45 |
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